AMC Theatres Passes on MoviePass Program

6:11 PM PST 06/30/2011 by Alex Ben Block

The second largest U.S. theater operator says it wasn't consulted, nor will it cooperate, with the plan to sell unlimited movie tickets for a flat rate.

Techies call MoviePass’s fledgling plan to offer unlimited movie-going for a flat rate of $50 a month "Netflix for movie ticket buyers."

But AMC Theatres has some other names for it.

The second largest North American exhibitor says it will not participate. A spokesman says AMC’s corporate office in Kansas City has instructed all of its more than 375 theaters (with over 5,300 screens) -- including those in the San Francisco/San Jose area where a beta test has just gotten underway -- not to participate.    

“As MoviePass is currently designed, it does not integrate well into our programs and could create significant guest experience issues,” says Stephen Colanero, AMC’s chief marketing officer.

AMC says it wasn’t consulted and hasn’t agreed to accept the MoviePass system which involves people using their “smart” cell phone to order and gain admission.

“We were surprised to see the press release and subsequent press coverage of MoviePass earlier this week as it included several of our San Francisco locations,” says Colanero. “It was news to us to see that we were participants and we will be communicating to those theatres they are not to accept MoviePass.”

What has AMC upset is that MoviePass, which promoting its value to distributors, seems to have not considered the role of the exhibitor -- the people who own the theaters -- while promising a whole new way of doing business to those who make and market movies.

MoviePass operates on the model of a ticket broker who buys tickets for the Lakers game or a Madonna concert and then re-sells them to whoever they wish without consent from the original seller. While that may be common with arena shows, AMC doesn’t see it as a workable model for exhibitors.

AMC spokesman Ryan Noonan says that they currently cooperate with two other online ticket sellers MovieTickets.com and Fandango.com. Patrons purchase online and then bring their credit card to the theater where AMC processes the transaction, and integrates it with its frequent movie-goer club AMC Stubs, which was just rolled out in April.

Noonan says AMC doesn’t work with any service that provides unlimited tickets for a flat rate, and that he doesn’t even know of one.

That of course is what makes MoviePass seem so original, if it can work. They are offering the $50 flat rate and a $30 rate for less frequent movie-going. That seems like a bargain to people who go to the movies a lot, with the average adult ticket price in 2010 of $7.89, up 5% from the prior year. And at many theaters in large metro areas prices are actually several dollars higher than that.

MoviePass not only wants to sell the ticket online and make entering the theater as easy as flashing a smart phone, but it also wants to sell the consumer coming out of the movie.

"The service will be able to offer sneak peeks of trailers based on previous movie attending patterns,” says MoviePass co-founder Stacy Spikes, “drive ancillary revenue through DVD, digital download and merchandise offers, and draw audiences to special screenings.”

They also promise to work with movie distributors to target potential ticket buyers: “Studios and distributors will receive an unparalleled marketing opportunity, with the application’s ability to target movie lovers based on their movie viewing habits.

At least initially MoviePass is offering only a limited number of subscriptions as part of the Bay area Beta test “with charter subscribers able to offer their friends entrée into the club,” a press release promises.  

Their plan is to roll out the unlimited subscription plan to more U.S. markets by later this summer and go national in the fall.

MoviePass, based in New York, was founded by Spikes and Hamet Watt with backing from AOL Ventures, True Ventures, Lambert Media, Moxie Pictures, Brian Lee, MJ Ng, Ryan Steelberg and Adam Lilling.

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