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MoviePass has dramatically slashed the cost of its subscription service to $9.95 a month.
In major cities like New York and Los Angeles, that’s less than the cost of a ticket, and especially for an evening show. Theater owners don’t lose out, however, since MoviePass pays the difference. MoviePass doesn’t include Imax theaters or premium format cinemas.
The new price scheme, which allows a person to see one movie a day, was revealed on Tuesday, along with the announcement that MoviePass has sold a majority interest to Helios and Matheson Analytics, who want to study moviegoing habits.
In the past, MoviePass subscribers have paid as much as $50 a month, though in December the service was offered at $10 per month at 24 Studio Movie Grill locations. That promotion coincided with an investment in MoviePass from Studio Movie Grill.
MoviePass CEO Mitch Lowe, an early exec at Netlifx and Redbox, will use the investment from Helios and Matheson to roll out the new $9.95 service. Already, more than 90 percent of theaters participate in MoviePass, including the three largest circuits, AMC Theatres, Regal Theatres and Cinemark.
The MoviePass news comes during tough times at the domestic box office, where summer revenue is down more than 12 percent.
On Tuesday, theater stocks were struggling and while some attributed the slump to the MoviePass news, these stocks had already been heading south for months. Plus, those who understand the MoviePass business model say that it is a plus for exhibitors, since MoviePass is buying tickets for its subscribers.
“MoviePass cannot do this in a bubble — they needed the approval of both studios and exhibitors, who would not sign off on anything that was detrimental to their financial outloook,” analyst Eric Wold of B. Riley wrote on Tuesday. “Studios and exhibitors are not taking a discount under the MoviePass model. We understand that MoviePass is absorbing the ticket discount and hoping to make up the discount through monetizing the data.”
“Our vision,” Lowe said Tuesday, “has always been to make the moviegoing experience more affordable and enjoyable for our subscribers. We are changing the way consumers think about going to the movies by making it possible to experience a broader array of films — from the latest summer blockbuster to a critically acclaimed documentary — through a subscription model.”
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