- MoviePass cofounder Stacy Spikes retained ownership of the company after going bankrupt in 2019 and is looking to restart it.
- Membership services have attempted a resurgence at a time when many movie theater chains have strengthened their own paid loyalty programs to include ticket subscriptions and discounted discounts.
- The company will not only have to navigate a new pandemic landscape and these rival rewards platforms, but also build a sustainable business model, something it was unable to achieve before the shutdown in 2019.
MoviePass, the movie theater ticketing service that skyrocketed to popularity in 2017 and went bankrupt two years later, is looking for a Hollywood reboot.
Co-founder Stacy Spikes acquired ownership of the company on Wednesday after a bankruptcy court judge in the Southern District of New York approved the sale on Monday. Spikes said that the company is exploring the possibility of relaunching in the near future.
The theatrical industry has changed a lot in the two years since MoviePass went out of commission. A global pandemic has shuttered theaters and shut down the production pipeline, leading to below-average box office profits as the industry works to rebuild.
MoviePass’s revival effort comes at a time when many movie theater chains have strengthened their own paid loyalty programs to include ticket subscriptions and discounted discounts.
The company will not only have to navigate a new industry landscape and these rival rewards platforms, but also build a sustainable business model, something it was unable to achieve before shuttering in 2019.
“The AMC A-list movie pass rose from the ashes and has become essential to many avid audiences,” said Jeff Bock, senior analyst at Exhibitor Relations. “Given the plethora of problems faced by MoviePass card holders, it will be difficult to woo existing customers.”
“I’m not saying it can’t work out, but many potential customers will be extremely wary of this sequel,” he said. “Can it help the box office? Sure. But they have a better business plan if the company is going to survive in the long run.”
Founded in 2011, MoviePass was acquired by Helios and Matheson Analytics in 2017. First, the service offered customers one movie voucher per day for $10 to $10 per month for $30 to $40. The expectation was that most customers would not actually use the service regularly, in the same way that gyms are able to compensate for the cheap monthly fee of customers without shows.
However, many MoviePass customers, who signed up in large numbers in 2017, started using the service too often, and the company quickly started losing money. In an effort to move forward, MoviePass began revamping its subscriptions, cutting back on the number of titles it could watch in a month and not allowing users to watch the same movie twice.
Membership grew from over 3 million members to approximately 225,000 in April 2019. Without the support of movie theaters, which had curtailed MoviePass’s business model and infiltration into the industry, the company was forced to liquidate in mid-September 2019.
“It has been proven that the model of losing money on every transaction and trying to make up for it with volume doesn’t work,” said Eric Handler, media and entertainment analyst at MKM Partners.
AMC launched its A-List program in the summer of 2018, offering viewers up to three movies per week in any format – iMac, Dolby Cinema or RealD 3D – as well as free upgrades on popcorn and soda, large Free refills on popcorn, and no online ticket fees. Additionally, the program offers users points that can be redeemed for money from future purchases.
The cost of the service ranges from $20 to $25, depending on where customers are located in the US. Before the pandemic, AMC had about 900,000 A-list members watching about 2.6 movies per month. After reactivating the service in July, AMC told about two-thirds of customers.
Rival Cinemark has its own loyalty program, called Movie Club, which gives users one free ticket to a regular movie per month, 20% off concessions, and no online fees when purchasing tickets. The service, launched in December 2017, costs $9.99 per month and unused movie tickets roll over to the next month.
The company recently launched the Platinum Edition of its Movie Club for members who visit 25 times in a calendar year or buy 60 tickets. One of the major benefits is the 25% discount.
In mid-2019, Cinemark’s Movie Club had over 500,000 users. Upon reactivating the program in 2021, the company said it saw only a 6% drop in membership, largely driven by credit cards that had expired.
The company also said that 64% of its Movie Club members have shown interest in achieving platinum status this year. Additionally, it recently launched a new service for online food and drink ordering that allows guests to skip lines and pick up their concessions at either counter.
Regal was the last of the major movie theaters to launch such a subscription service, entering the scene in mid-2019, just as Movie Pass was departing.
Regal Unlimited allows customers to watch as many movies as they want. It has three tiers that range from about $18 to $24 and offer 10% discount on all food and non-alcoholic beverages, a free big popcorn and soda on the user’s birthday, and no blackout days for movie reservations .
The main difference between the three tiers is the number of theaters that users have access to when selecting their movies. The lowest tier is available in 200 theaters, the middle tier reaches 400 theaters, and the highest tier is for 550 locations across the US.
“MoviePass can’t offer A-List and Movie Club because those two services may also offer discounted benefits,” Handler said. “Having an independent service is highly unlikely to work unless there are smaller circuits that might want to provide some sort of white label service.”