It wasn’t long ago that movie theaters were looking at the doomsday clock, wondering when the credits would roll and the curtains would fall on their business model. With the rise of streaming services and TV’s resurgence, cinema was quickly becoming obsolete — or at least it seemed that way.
Besides, who would continue to pay nearly $35 for two tickets to the movie theater on a Saturday night — or any day, for that matter? But then in 2011 came MoviePass, an innovative startup that offered a film subscription service that married advances in technology with changes in the way consumers get their entertainment.
MoviePass and AMC are fighting — and it’s affecting movie-goers
While not exactly a knight in shining armor, MoviePass extended a lifeline to cinemas by offering tiered packages designed to get moviegoers back in theaters, where they would inevitably buy high-priced concessions — a major profit center for movie house chains.
Controversy began at the outset between the fledging company and AMC, the nation’s largest cinema chain. AMC aired its differences for all to see in 2011 when MoviePass was still in its beta phase, saying that it wouldn’t be participating in the ticketing service. “Plans for this program were developed without AMC’s knowledge or input,” Stephen Colanero, AMC’s chief marketing officer, said in a written statement. “As MoviePass is currently designed, it does not integrate well into our programs and could create significant guest experience issues.”
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But soon AMC joined forces with MoviePass, giving its customers a chance to buy into the subscription service.
Because it was able to get people back out of their homes, MoviePass was able to secure deals with more than 90% of theaters across the country, including Cinemark, Regal and some independent chains.
Its app was known to frequently crash and customer service was an issue, but last year, the subscription service became a hit. After experimenting in recent years with different price points, MoviePass struck gold last fall when it began offering consumers one film per day for a flat $9.95 monthly fee.
Miffed at the sudden change of price, AMC declared war: “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,” the chain said in a strongly worded press release. “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.”
AMC said that its main gripe was that “from what we can tell, by definition and absent some other form of other compensation,” MoviePass would be losing money by offering customers such a low price and therefore would go out of business and take the cinema industry with it.
Ticked off by the threat of legal action and boasting a new milestone of 1.5 million subscribers, MoviePass promptly stopped supporting several AMC theaters in major markets. When MoviePass customers showed up at some AMC theaters to catch a flick, they were turned away.
Upping the ante during the holidays, MoviePass advertised a one-year package for $89.95 — making the price of a monthly movie-a-day subscription less than $8, lower than the industry’s average ticket price. The war was on.
Ted Farnsworth, CEO of MoviePass parent Helios & Matheson, said that the company had proven itself a savior “in a declining industry” and that despite AMC not being interested in true collaboration “since the get-go,” his company was responsible for 62% of the chain’s operating income, according to Deadline.com.
AMC responded by saying that it was MoviePass that prevented customers from enjoying movies at the chain — and that the company was inflating its importance.
“AMC has taken no action to block the acceptance of MoviePass at our theatres,” AMC said last week, as reported by Variety. “We have no further comment about MoviePass’s unilateral actions. We are, however, disappointed that MoviePass continues to make false statements about AMC, including today when MoviePass greatly exaggerated its contributions to AMC’s profitability.”
So who really loses in this epic battle between these two companies? Ultimately the movie-going public, who is looking for cheaper prices and added amenities, as cable and TV companies compete for their attention.
How the AMC-MoviePass tug-of-war will play out is anyone’s guess, but one thing is certain: The spat could just be more incentive for movie-goers to stay at home and sign up for the myriad streaming services available.
Which streaming service should you subscribe to?
Team Clark has written extensively about several of the major streaming sites and given consumers a trusted review of there pluses and minuses. Here are some options for those who want to see the latest movies and TV shows in the comfort of their own home.
Sling TV: 5 things to know before you sign up
Netflix: 6 new developments for 2018
Youtube TV: Is it ready for primetime?
Hulu: What to know about its live TV streaming service