South by Southwest (SXSW): MoviePass, a Movie Subscription Service — for Theaters

A new service lets film fans go to the movies as often as once a day, for one monthly charge.

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When I first heard of MoviePass — a subscription service which lets you watch a movie a day for one flat price — I assumed the movies in question were streamed over the Internet, and that the company was an upstart Netflix competitor. Nope. They’re the movies currently in theaters. And MoviePass lets you go to the film of your choice at the theater of your choice, with no blackout dates and few other restrictions.

At South by Southwest Interactive in Austin, I learned about MoviePass from the company’s co-founder and CEO, Stacy Spikes.¬†He’s been experimenting with the MoviePass concept for a while: the company¬†tested a version in San Francisco in 2011 which was expensive ($50 a month), complicated (you ordered the ticket through a third-party service and then redeemed a code to pay for it) and controversial (the AMC chain refused to participate).

[image] MoviePass CEO Stacy Spikes at SXSW

Harry McCracken /

MoviePass CEO Stacy Spikes at SXSW

The current version, which debuted in October of last year, still isn’t fully open to the public. (Spikes told me there’s a waiting list of 25,000 to 30,000 people.) But it addresses the earlier incarnation’s hitches.

For one thing, it’s cheaper — $29.99 a month in most areas. That doesn’t include 3D and IMAX movies or drive-ins, and the price is $34.99 in the nation’s priciest moviegoing cities, New York, Los Angeles and San Francisco.

New members agree to subscribe for one year, with an early termination fee if they cancel after that time; thereafter, subscriptions are on a month-to-month basis. The company is also selling the service in the form of gift cards which offer one month, three months or a year’s worth of movies.

The new MoviePass also uses a clever technological approach which sounds simple and doesn’t require the participation of theater chains: you use an iPhone or Android app to check in at a theater and choose a movie, which unlocks your special MoviePass debit card to pay for the ticket. (The payment is only authorized for 30 minutes, and only for movie theaters, so you can’t spend the money on anything else.)

MoviePass uses Discover for payment processing. There are theaters which don’t take Discover, and ones which don’t take credit cards at all, but Spikes says that MoviePass works for 33,000 of the nation’s screens: “We have 93 percent of the country…you can throw a rock and hit a theater near you, and you’re golden.”

At thirty bucks a month, a MoviePass member will likely start to save money after three movies. (The average price of a ticket in 2012 was $7.96.) I’d be impressed if anyone actually takes advantage of the movie-a-day opportunity, but if you see at least one film a week and are willing to commit for a year, MoviePass sounds like a deal. Spikes told me that members see 64 percent more movies, and spend 123 percent more at the concession stand than non-members.

But wait a moment — with this system, MoviePass is paying full price for tickets. How can the company do that without losing its shirt? Spikes told me that it plans to turn a profit in part through ancillary activities such as selling DVDs and other merchandise to its members: “If you know you want to own Dark Knight, if you know you want to own Superman, now you don’t have to wait.”

He also says that MoviePass sees the data it collects about the movies its members see as an attractive opportunity for brands and movie companies. Speaking of A Good Day to Die Hard, he told me “Bruce Willis’s movie is a giant Mercedes commercial, but Mercedes has no way of knowing who saw the movie and marketing to them.” MoviePass could work with a company such as Mercedes to follow up on product placement with advertising that targeted the moviegoers who’d seen it. It also plans to sell aggregate data based on its members’ moviegoing habits to movie studios and theater chains; Spikes told me they currently know very little about who’s going to see which movies.

And at some point, he believes, MoviePass will also be able to strike formal deals with theaters which will let it provide tickets to members without paying full price. “We see it as a win-win for the chains, because 93 percent of the time, the plane, so to speak, is flying empty,” he says. “Anything that drives more traffic is a yield-optimization boost.”

In short, if MoviePass is only a hit with film fans, the business model won’t work; its profits will come from activities other than the subscription service itself. I’m not confident the math will add up, but I hope it does — and it’ll be fun to see if the service takes off once it gets through its waitlist and throws its doors open to all comers. When I asked Spikes when that will happen, he paused, smiled and said “Soon.”