Yesterday, movie subscription service MoviePass announced a huge change in pricing structure which will make it a lot cheaper for moviegoers to go to the movies. One major theater chain is really not happy. AMC Theaters have actually issued a press release in which the theater chain question how unlimited movies for $9.95 is possible, and the company informs people that it is working toward making sure that MoviePass can not be used at AMC Theaters. According to the press release...
AMC Theatres announced today its concern that an announcement by a small fringe player in the reselling of movie tickets is not in the best interest of moviegoers, movie theatres and movie studios. Accordingly, AMC is consulting with its attorneys to determine if or how AMC can prevent a subscription program offered by MoviePass from being used at AMC Theatres in the United States.
First of all, you have to appreciate the shade being thrown at MoviePass when AMC calls them a "small fringe player." That tone continues throughout the rest of the press release as AMC Theaters is incredibly critical of the subscription company because, at a price of $9.95 per month, anybody who sees at least two movies a month will be making a killing. In some markets and for some showings, one movie is all it will take.
AMC claims that part of the concern is for the consumer, as the company predicts that MoviePass will eventually fold due to this new pricing structure, leading to a lot of disappointed movie fans. It's certainly true, that since MoviePass is simply a middle man, and that MoviePass will be buying normal price tickets from theaters, it doesn't seem like a long term viable price point. AMC apparently doesn't want to get painted with the same brush as MoviePass as it's afraid that if people begin to have bad experiences with the service, it could lead to some of the ill will blowing back on them.
AMC also claims that this will have repercussions throughout the industry, eventually leading to a reduction in both theater and studio revenue, which will not give filmmakers "sufficient incentive to make great new movies." However, if the studio is receiving the full ticket price from MoviePass, it's not clear how studio income will be reduced. Studio's receive the majority of ticket revenue themselves and if MoviePass is paying full ticket price, studio income doesn't change. It would seem that AMC sees a worse case scenario here being that if MoviePass is too successful, it could lead to theaters reducing ticket prices overall in order to compete, which would lead to movies making less money overall.
For what it's worth, MoviePass could theoretically be a boon to theaters, as they receive most their revenue through concession sales and if more people begin to go to the movies more often because of MoviePass, that could potentially sell a lot more popcorn.
Ultimately, the question of how MoviePass remains sustainable is still a valid one. Also, the service becomes a lot less valuable if AMC Theaters, the largest chain in the United States, doesn't accept the MoviePass card. This issue is far from over. Keep checking CinemaBlend for more as this potentially big change in the movie industry continues forward.
