Why The Major Theater Chains Are Suspicious Of MoviePass, According To The CEO


Since August of last year, one of the biggest stories in the movie industry has been the emergence of MoviePass. The theater-going subscription service reduced its monthly rates and experienced a massive surge in subscribers as a result. But along the way, MoviePass has faced stark opposition from major theater chains like AMC, which staunchly oppose the service. For Netflix co-founder and MoviePass CEO Mitch Lowe, the suspicion the chains have for MoviePass stems from their aversion to having someone else come between them and the customer, as he explained:

If you think back when Orbitz and Travelocity, Expedia were founded, the airlines and the hotels wished they didn't exist. They want that one-to-one relationship with customers. That's exactly the way the big theaters look at us. They go, 'Geez, we want that one-to-one relationship. We don't want a middleman.'

I am sure that there are countless reasons the higher ups at the big theater chains would cite for why they don't like MoviePass, but Mitch Lowe's explanation certainly sounds logical. The theater chains had a direct relationship with the consumer that they could control, and I imagine they see MoviePass as breaking the directness of that relationship and making money by doing so. The theater chains could create uniformity to the moviegoing experience, carefully setting certain expectations for the consumer and crafting perceived value. MoviePass interrupts and changes that relationship.

The travel websites that Mitch Lowe noted are a fair, if not entirely equivalent comparison. The travel sites are acting as a middleman between the consumer and the hotels and airlines, and you can often get a better price by using them. The hotel and airline industry may have initially resisted this disruption, but eventually they adapted, and the two now peacefully co-exist. MoviePass is different though, in that the potential value added is huge compared to the discounts you might find on airfare by booking through a third party site. The more movies you see a month with MoviePass, the less each ticket averages out to be, thus changing consumer perception of the value of a movie ticket. As of yet, there is no such service that disrupts the airline or hotel industry to this extent (although can someone please get on that, airfare is expensive).

Later in his interview with Recode, Mitch Lowe also noted that independent and mid-sized theater chains are not as adamant in their opposition to MoviePass, with some seeing the service as a way to get people back into the theaters where attendance continues to decline. It will be interesting to see how the battle between the major theater chains and MoviePass shakes out. The theatergoing service has clearly struck a chord, recently passing the 2 million-subscribers mark, less than a month after hitting 1.5 million. Perhaps the service will struggle with profitability and go the way of the dodo, or maybe it will leverage its assets and settle into a symbiotic relationship with the theater chains just like the travel sites did with the airline and hotel industries. Only time will tell.

MoviePass just cut its prices again, but Mitch Lowe's service isn't the only game in town. There are some alternatives to the service worth looking at if you're considering a theatergoing subscription service. There are plenty of movies to see this year, too, regardless of how you're paying, so check out when they're arriving in our release schedule.

Nick Evans

Nick grew up in Maryland has degrees in Film Studies and Communications. His life goal is to walk the earth, meet people and get into adventures. He’s also still looking for The Adventures of Pete and Pete season 3 on DVD if anyone has a lead.