When MoviePass—the subscription-based company that allows its customers to see a film a day—announced it was dropping its monthly fee to $10, the biggest theater chain in the country objected. On paper, it was hard to tell why AMC would do this: MoviePass reimburses cinemas for the full cost of each ticket purchased, theoretically driving more traffic to participating multiplexes without any financial loss. But last week, the downside of that arrangement became clearer, as MoviePass summarily blocked its users from buying tickets at 10 big AMC locations as a negotiating tactic, seeking a cut of ticket sales from the company in exchange for full cooperation.
MoviePass initially launched in 2011 as a voucher system, where you had to print your tickets from home. It later switched to its current credit-card format (requiring check-in on an app before a purchase can be made), but with much higher monthly fees that ranged from $30 to $50 depending on location. Last August, the data-analytics firm Helios and Matheson acquired a majority stake in the company and slashed its subscription price to just $9.95 a month (users can buy one ticket a day for any film, excluding 3D or IMAX screenings). The Helios and Matheson CEO Ted Farnsworth said MoviePass could absorb the price cut because it would attract more subscribers, and the resulting data on their filmgoing habits would be valuable to advertisers. Within months, a niche service for cinephiles became a national trend—MoviePass now has 1.5 million members.