I was a member of MoviePass during its last incarnation and found it extremely frustrating to use to the point of throwing my hands up in the air. This time, the service and availability have been even worse despite the nominal reduction in price. My own view is that it’s not been particularly successful in planting rear ends in seats altho its buzz may have encouraged people to think about going to movies. What MoviePass has definitely produced is competitors some of whom offer a pretty decent product (like AMC Entertainment Holding’s A-List). Getting people to leave their homes to see a big screen requires the sort of creativity that’s beginning to appear in terms of Tuesday $5 prices or food delivered to your seats. Perhaps it will even occur to someone to hype the fun of attending a movie with other people rather than in silence. We’ll see.
The past year has been very good for the U.S. box office. Much of that had to do with the combination of a good economy and a great lineup of movies, but at least some of it is thanks to MoviePass.
Through June this year the movie-subscription service’s cost of revenues came to $313 million, according to a securities filing from parent company Helios & Matheson Analytics .HMNY -5.41% That was equal to 5% of the U.S. box office in the first half of the year.
But Helios’s future is in question. It slashed prices for MoviePass when it bought the service last year, leading to a surge in subscriptions. Since then it has spent far more on movie tickets than it has taken in, sustaining steep losses as a result. With doubt growing over its ability to continue operations, Helios’s market value has been nearly wiped out. Even if it does survive, new limits it has placed on the number of films subscribers can see could make it far less of a force at the box office.
Movie theaters have so far been having a busy year. Driven by blockbusters such as “Black Panther” and “Incredibles 2,” U.S. box office receipts through August hit a record $8.2 billion, up 10% from a year earlier. But if MoviePass subscribers stop scooping up tickets like before, it could be harder to fill seats. Adding to the challenge, the slate of movies coming out over the next several months looks less inspiring and the box office also will be going up against some tough comparisons with the latter third of last year, when big movies including “Star Wars: The Last Jedi” and “Thor: Ragnarok” came out.
Theater chains have recently rolled out subscription services of their own, which may fill some of the seats that MoviePass filled before. Chief Executive Mark Zoradi of theater chain Cinemark Holdings said earlier this month that, so far this quarter, its new Movie Club service represents 7% to 8% of its box office versus 3% for MoviePass. Last month AMC Entertainment Holdings Chief Executive Adam Aron said that, because the chain had launched its A-List subscription service, “we are not at all worried about any falloff in our visitation or revenues because of problems that others have in the marketplace.”
Still, none of the new services are as generous as MoviePass, which allowed subscribers to watch movies as often as once a day for less than $10 a month through much of this year. And it is the theater chains, not MoviePass, that will eat the cost of any discounts they now offer, denting profits.
Maybe they can make up the difference on popcorn.
Write to Justin Lahart at firstname.lastname@example.org