- As entertainment editor at the Verge,
I spend a lot of time at the movies,
but most people say the opposite.
Last year in the US and Canada,
theater attendance dropped to a 25-year low, and I get it.
These days, movie theaters are competing with Netflix
and Hulu, 4k flat screens and video games,
and as attendance goes down, ticket prices
have gone up, making the whole thing more difficult
to justify in the first place.
But lately, some friends and colleagues have
been trying to see more movies
with something called MoviePass.
(dramatic music)
If you somehow haven't heard of it,
the pitch for MoviePass was simple.
Spend $10 a month, and you can see up to one movie a day.
For a lot of people, that seemed too good to be true,
and by June of 2018, over three million people
had signed up for the service.
It seems like everybody should win,
but in reality, everybody's losing.
MoviePass, its customers, and theaters.
But by popularizing subscription services,
MoviePass may have shown theaters the way
to control their own destiny.
MoviePass caught on because it seemed too good to be true,
and sure enough it was.
This year alone, the service has bate
and switched on surge pricing, repeat viewings,
and theater availability, and that's just for starters.
In the meantime, theaters are frustrated
because a service like MoviePass prevents them
from competing on things like premium screens
and better seating.
Imagine being a Netflix subscriber,
only to find out on the day that Stranger Things
comes out that you have to pay
three extra bucks to watch it,
and you can only see it once.
That's the kinda stuff that MoviePass customers
have had to deal with, and that's after the company
decided to get rid of it movie a day plan
before deciding to bring it back again.
I mean look, the whole thing really is a mess,
and it comes down to the fact that MoviePass
doesn't make money, the company hopes
that when it hits a certain subscriber base size,
all the math will magically work out.
But in the meantime, it's burning through cash.
Causing the stock price of its parent company to plummet.
The fix apparently seems to be to get its customers
to stop going to movies, or if they do, to pay up.
MoviePass customers took the hit stress
to be a pretty common theme.
What happens when they couldn't get AMC theaters
to a negotiating table?
Subservient subscribers couldn't access
10 of AMC's busiest locations.
What about when it was advertising a movie
that was opening opposite of Jennifer Lawrence's new film?
Several of its customers couldn't
access Jennifer Lawrence's movie either.
That's not to say it's all terrible.
For some people, MoviePass really is a great value,
and that's fantastic.
And according to the company, its customers
do spend more on popcorn and concessions,
which is great for theater owners,
but it's essentially middle man trying
to build its own business on top of what theaters
have already done, whether they want it to or not.
Doug Whyte, executive director of the Hollywood Theater
in Portland, Oregon, had some particularly frank thoughts
on the subject.
- They suddenly inserted themselves
into our business model, sold them the same tickets
at cheaper, MoviePass says, "We basically
stole your customers, and now
to get them back, we want a cut."
It's just a weird business model
and not something that we're
finding terribly friendly, you know?
I mean we've created something that we don't feel
like we're dependent on MoviePass, right?
We've created our own community, our own perks,
our own benefits that MoviePass can't replicate.
(soft music)
- See the problem with something like MoviePass is
that it prevents theater chains from competing
with your business, major chains usually
show all the same movies, so they compete
on things like location, pricing,
and quality of presentation.
Laser projection, Hdr, sophisticated surround sound,
70 millimeter, these are ways that theaters can compete
for your business and when you're away
from your 4K living room TV.
But MoviePass ignores that premium experience
and the sizeable investment theaters made to get it
by offering just the entry-level, 2D experience.
It dumps theaters down, turning a night
at the movies into a combating experience
where the only thing worrying about is the price.
That's great if you don't want
to spend $15 to see Deadpool 2,
but is dangerously short-sighted.
Because when you convince customers
that movies aren't worth paying for,
and that presentation doesn't matter,
your unintentionally removing every reason
for them to leave the house at all.
(soft music)
There's no denying that MoviePass has changed the dynamics,
so the question becomes, how do theater chains react?
AMC, which has had no qualms about talking smack
about MoviePass in the past recently
launched its own subscription service called A-List,
but that service costs $20 a month, and you can
see three movies a week, but with no restrictions.
Meaning you can go to AMC prime adobe vision
or IMAX, or anything else the theater has to offer.
Given that's the biggest chain in the world,
for a lot of people that's gonna be pretty compelling.
We're used to thinking that disruption is the answer
to everything, and that cheaper automatically equals
better, but that's not always the case.
Going to movies is an experience,
and the more the theaters can control their own destiny,
and react to the wants and needs of their customers,
the better kinds of experiences they'll be able to provide.
Now what they can control is the quality
and variety of the movies arriving in their theaters.
But that,
that's gonna be an entirely different video.
"Mamma Mia!" guys, huh?
Huh?
Oh no, here's what we're doing.
This is how we're starting it guys, right here.
This is it, okay, shooting again.
If I have this slated, that's the slate.