AMC to pass on MoviePass

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MoviePass, a service that allows subscribers to attend movie theaters for a set price every month, dropped their fee to only $9.95 a month last Tuesday, Aug. 15. MoviePass works as a middleman between the theaters and consumers by paying full price for the tickets and reselling them to consumers for a flat monthly fee.

For many avid moviegoers, this is a once-in-a-lifetime deal, and since the drop in prices, subscriptions have skyrocketed. However, major cinema chain AMC is not pleased with the change of price despite being assured by MoviePass that they will be reimbursed for every ticket bought.

In a recent statement, AMC describes the price as “[setting up] consumers for disappointment down the road if or when the product can no longer be fulfilled.” It is of note that the average ticket price to see a movie at AMC is $9.33. AMC goes on to say, “MoviePass will be losing money on every subscriber that sees two movies or more in a month.”

MoviePass CEO Mitch Lowe is more optimistic about his company’s price cut: “We know we have to prove the value we deliver and, at that point in time, where we’re delivering value to studios and theaters, we can work together with them in a constructive manner so that everybody makes more money.” AMC does not agree. They believe that accommodating the MoviePass model will lead to less satisfactory guest experiences as well as not allow AMC to “produce enough income to provide filmmakers with sufficient incentive to make great new movies.”

Ironically, in 2015, AMC and MoviePass worked together in a pilot program to test the effectiveness of the MoviePass model. This was the first major endorsement the startup received. At the time, the premium subscription program ran between $30 and $45. Results showed that MoviePass users bought more concessions and boosted attendance by 111 percent.

Despite their lowly opinion of MoviePass, AMC reminded the public that it “is not opposed to subscription programs generally, [but] the one envisioned by MoviePass is not one AMC can embrace.”

Lowe, who is also the cofounder of Netflix and former head of Redbox, compares AMC’s comments to Blockbuster when his other companies started gaining traction, “It’s the big guy being afraid of the little guy offering better value to consumers.”

AMC ended their statement by emphasizing that they are currently consulting with attorneys about their ability to opt out of MoviePass, a program they describe as “shaky and unsustainable.”

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AMC to pass on MoviePass