Cineplex Tests Paid Loyalty Program Tier for Moviegoers

Ellis Jacob - Warner Bros. Pictures Private Cocktail Reception for The Man From U.N.C.L.E. - Getty - H 2017
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The $6.95-a-month program, led by CEO Ellis Jacob, promises additional incentives as MoviePass-like subscription services enter the Canadian market.

Exhibition giant Cineplex has launched a test paid loyalty tier for its long-running Scene membership program as MoviePass-like cinema subscription services enter the Canadian market.

The move came as Cineplex on Wednesday unveiled third-quarter financial results that saw revenue rise on a strong Hollywood movie slate, even as earnings fell due to one-time items. Scene Gold, costing $6.95 a month, will allow subscribers to earn a free movie for every three visits to the multiplex, enjoy dedicated concession lines and receive one-per-week free upgrades to premium screenings of 3D, UltraAVX or Imax films.

Cineplex CEO Ellis Jacob told The Hollywood Reporter that the Scene Gold paid tier is not modeled on MoviePass and other cinema subscription services that have been late-comers to the data collection game. Cineplex, with its long-running free Scene loyalty program and its 9.4 million members, has been gathering and using customer data for nearly a decade to market Hollywood movies to its patrons.

"Part of the reason for the third parties doing this is to try to get data. We've been gathering the data for a longer period of time. Scene Gold helps get us even deeper into that," Jacob insisted. The paid tier program, being tested in Edmonton, Alberta, also offers members free popcorn and drinks upgrades, and eventually a free appetizer at select multiplex restaurants.

As MoviePass competitors like AMC Theaters' A-List Stubs program and Cinemark's Movie Club are targeting frequent moviegoers in the U.S. market, Sinemia, which has a far bigger footprint in Europe, is making inroads in the Canadian market.

Also Wednesday, Cineplex posted reduced third-quarter earnings, despite higher box office from a strong Hollywood movie slate, owing to one-time share-based compensation expenses and restructuring charges. Jacob expressed frustration with investors overlooking a strong box-office performance during the latest quarter to focus instead on one-time items as they sent shares in Cineplex tumbling on Wednesday by $7.59, or 21 percent, to $28.46 on the Toronto Stock Exchange.

"They're beating us up for all the wrong reasons," Jacob told THR. Cineplex posted $10.2 million in net income, or 16 cents per-share, down 40 percent from a profit of $17.2 million, or 27 cents per-share, in 2017. The bottom line was impacted by a one-time $8.4 million jump in share-based compensation after stock in Cineplex spiked during the third quarter on improved Hollywood box-office fortunes.

Overall third-quarter revenue rose 4.4 percent to $386.7 million, as higher box-office and concession revenue offset lower theater advertising revenue. Cineplex during the latest quarter saw its best box-office performance from Hollywood titles like Mission: Impossible – Fallout, Ant-Man and the Wasp and Jurassic World: Fallen Kingdom.

That compares with a year-earlier third quarter that saw Spider-Man: Homecoming, It and Despicable Me 3 play on Cineplex screens.

The box-office revenue per patron during the latest quarter was $10.07, against a year-earlier $9.81.