MoviePass Emerges from Beta, Goes it Alone in Movie Ticketing

10/2/12Follow @jpruth

Weekends mean huge business for the movie industry, but weekdays are another story. Now a New York startup believes its platform can help fill those empty seats during weekday screenings. The team behind MoviePass is graduating its subscription service from its beta phase today with new technology for purchasing movie tickets. This two-year-old startup tried to test the waters before with then-partner MovieTickets.com—and met with some pushback from theater chains. But this time MoviePass is operating solo.

MoviePass lets users pay a monthly fee for access to one movie ticket per day at any theater across country. The theaters still get the full price of admission for each MoviePass purchase. Pricing on annual membership will vary based on the location of users and is expected to range from $29.99 to $39.99 per month.

Though that sounds confusing here is how it works. Subscribers select a movie and time via smartphone app, and then check-in when they arrive at theaters to unlock the linked MoviePass debit card they carry. Each subscriber uses his or her member card to purchase one ticket at the box office with the full price admission paid by MoviePass to the theater.

The transaction is carried out like a normal debit card purchase as far as theaters are concerned, says CEO Stacy Spikes. Consumers can potentially see movies at deep discounts given adult ticket prices can exceed $10 each. “It allows you to go to a movie a day for one low monthly fee,” he says. While there are no blackout dates on purchases, tickets for 3-D and IMAX screenings are not available through MoviePass. Spikes believes his company will bring more movie fans to theaters on weekdays when business is traditionally slow.

Though MoviePass might help fill empty seats and potentially drive more sales at theater concessions, the concept previously ruffled some feathers in the industry. Under its prior strategy, MoviePass users would have printed out ticket vouchers in advance, which they would exchange at theaters. In summer 2011, MoviePass met with resistance from movie exhibitors when it planned a beta test in conjunction with MovieTickets.com to be conducted at a group of San Francisco theaters. Back then AMC Theatres balked at notion of a third-party introducing a ticket payment service at its theaters without its prior knowledge. AMC also expressed doubts about the service running alongside its own customer rewards program launched in spring 2011.

Spikes says his current conversations with movie exhibitors have been “exciting” but did not give details. What is different this time is the payment is made as a debit card rather than through vouchers. Spikes says MoviePass developed its own technology and platform to replace the prior strategy. Because the payments are made via debit card, he says MoviePass does not have to integrate its service with movie chains.

For now MoviePass is available to members who previously signed up for the beta and friends they invite to join. Spikes says his company plans to let members give movie tickets as gifts to friends and family in the future. The company is also working on other potential revenue streams such as pre-order DVDs, blu-ray discs, and other items through the app, though it is too early to reveal details.

MoviePass is backed by AOL Ventures, True Ventures, Lambert Media, William Morris Entertainment, Nala Pictures, as well as individual investors, and has raised $4.7 million to date. Spikes believes the subscription model can win over movie lovers. It remains to be seen how movie theaters will respond this time. “It creates a platform that can increase attendance,” he says. “Once the chains start to see it affects the bottom-line they will embrace the service.”

João-Pierre S. Ruth is the editor of Xconomy New York. He can be reached at jpruth@xconomy.com and followed on Twitter @jpruth. Follow @jpruth

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