- Business Insider
Following the surprising news on Tuesday that MoviePass would begin a $9.95-a-month subscription service in which members can see one movie a day in US theaters, AMC Theaters has announced it is looking into whether it can block the service.
The largest theater chain in the world issued a statement late Tuesday saying it was consulting with its attorneys on whether it could stop accepting MoviePass.
“AMC believes that holding out to consumers that first-run movies can be watched in theaters at great quantities for a monthly price of $9.95 isn’t doing moviegoers any favors,” the statement said. “In AMC’s view, that price level is unsustainable and only sets up consumers for ultimate disappointment down the road if or when the product can no longer be fulfilled.”
That is the biggest question many have in the exhibition world: How will MoviePass be financially sustainable? BoxOfficeMojo says movie tickets in the US cost $8.89 on average. At that price, the company will lose money on a subscriber who sees just two movies a month.
One source told Business Insider it’s assumed that the company would be relying on advertising revenue, but MoviePass would have to do huge levels of traffic to really make any money. The service had about 20,000 subscribers in December and hopes to add 100,000 more with the new plan.
“MoviePass was founded to make it easier for passionate moviegoers and casual fans to see films the way they’re meant to be seen – in the theater,” MoviePass CEO Mitch Lowe said in a statement. “Our vision 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.”
MoviePass announced Tuesday that it had sold a majority stake to the big-data firm Helios and Matheson Analytics to promote a nationwide rollout of its $9.95-a-month plan.
Business Insider contacted the other major US theaters chains, Regal and Cinemark, to see whether either company was planning to attempt to block MoviePass, but neither immediately responded for comment.