Studios and Exhibitors Rail Against MoviePass [UPDATED]

     June 30, 2011

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Yesterday, it was reported that the New York-based MoviePass would be launching a Netflix-style subscription service that allowed consumers to pay $50/month to see unlimited movies in the theater.  The beta test began this week in over 20 theaters in the San Francisco Bay Area.  MoviePass plans expand into more cities this August and nationwide by the fall.  When you consider that the average ticket price has climbed to above $10 and that a movie-lover is probably paying at least $50 a month to go to the theater, it’s a great deal.

So of course studios and exhibitors are unhappy with it.  TheWrap reports that their unhappiness stems from A) how it breaks from the traditional price model (i.e. ripping you off) and B) they weren’t informed because MoviePass made its deal with online ticketing services.  Hit the jump for more.

Landmark Theaters is already taking measures to see if they can prevent MoviePass from offering tickets to its theaters and another major exhibitor is on the verge of announcing that they will not honor MoviePass vouchers.

[Update: AMC Theaters have sent out a press release saying they will not honor MoviePass vouchers.  The press release states MoviePass “does not integrate well into our programs and could create significant guest experience issues.”  Read: “It could screw up our new AMC Stubs program.”  While I know this site talked up AMC Stubs as part of Steve’s participation in the promotional contest for the new program, from a ticket-purchasing perspective, it’s a far weaker deal than MoviePass.  AMC Stubs will give you a $10 rewards card if you spend $100 at AMC Theaters.  AMC Stubs provides some bonuses for concession purchases, but as someone who goes to the movies for the movies and not the food, I would choose MoviePass over AMC Stubs every day of the week and twice on Sunday.]

moviepass-image-01It’s an incredibly stupid move on the part of these theater chains since the majority of their profits don’t come from ticket sales but from concessions.  If someone keeps coming to your theater, chances are they’re going to buy the overpriced snacks.  Furthermore, with premium VOD services aiming to keep consumers at home, exhibitors should be championing anything that gets those consumers back to the theater.

Distributors have a slightly better case for being upset.  MoviePass could make it difficult to calculate grosses, but MoviePass responds that studios will benefit by acquiring more tracking data and information about its consumers.  While that aspect is a little unsettling, letting a studio know that I’m seeing their movie doesn’t feel like an unacceptable invasion of piracy.

Based on what I know about MoviePass, I’m in favor of the service and it seems like the biggest problem distributors and exhibitors are having with it is that it wasn’t their idea and they don’t know how it will affect their business.  My argument would be that rather than sound the alarm, see how it plays out rather than shutting down a service that could benefit exhibitors, distributors, and most importantly, consumers.

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