How MoviePass is looking to rise again

MoviePass is back, and the questions on everyone’s lips are, can the app-­based movie-ticketing subscription service regain trust after its spectacular implosion three years ago? And can it thrive in a post-pandemic world where several major US chains now operate their own loyalty programmes? Stacy Spikes, the original co-founder and CEO who recently bought back the company, seems to think so.

Spikes’ story at MoviePass is tumultuous. He launched the company in 2011 with a brief pilot scheme that allowed members to watch an unlimited number of films a month for a $50 fee. Initially Movie­Pass fell foul of AMC Theatres, which was concerned the business would devalue ticket prices, before the companies patched things up and the monthly fee changed in late 2014 to $30‑$45 for a film a day.

Spikes sold MoviePass to Helios and Matheson Analytics in 2017, which lowered the entry level to $9.95 a month for a film a day. The generous price point was a bone of contention and Spikes was fired by email in January 2018. By the middle of that year, subscription levels had gone from 20,000 customers to 3 million within 12 months. The managers, led by CEO Mitch Lowe, believed they would reach break even at 5 million. It never happened. The company was bleeding cash and Helios and Matheson filed for Chapter 7 bankruptcy protection in January 2020.

Spikes bought back MoviePass late last year at a bankruptcy auction and plans to launch MoviePass 2.0 this summer. The acquisition did not include customers’ personal information data but Spikes did receive transactional data showing which tickets were sold for each film and theatre. New investors were due to be announced after time of writing.

The entertainment entrepreneur says the platform will enhance a crowded entertainment landscape and win over MoviePass customers old and new with a raft of fresh features. Customers will choose one of three price tiers. Price points will be unveiled in due course but, says the former Miramax marketing executive, “The math should work out that you’re still getting the ability to go to the movies cheaper than if you were buying full retail price tickets.”

Pricing system

The big new idea is that MoviePass will operate on a credit system where allotment varies depending on the tier. “We heard from theatres that all theatres, all movies and all showtimes aren’t created equal and they wanted to be able to have some way to differentiate,” says Spikes.

Under the original MoviePass, users could book tickets online with participating theatres. However when they visited venues that were not part of the online booking system, they had to swipe their debit membership card to find out if seats were available. There was no mon­etary benefit to participating theatres.

“The credit system will allow traffic to be routed to the partner as an advantage,” says Spikes. MoviePass 2.0 will use a variable pricing approach that the airline and hospitality industries have employed for years. Optimal times and locations, such as a tentpole’s opening night in Manhattan, will use up more credits than watching, for example, the same film in the midwest on a Tuesday afternoon in the second week.

There will be no blackout dates, credits can roll over to the following month and members can use them to bring friends. One idea that was well-received during beta trials — but will not launch with the first phase of the app — is to enable members to earn extra credits by watching in-app advertising content, provided they keep their eyes on the screen, which can be ascertained through the phone’s facial recognition software.

Will all this help exhibitors recover? Spikes believes so and thinks MoviePass will also assist theatres that screen mid-sized films. “What we found was we didn’t move the needle on Spider-Man: Homecoming but when it came to Lady Bird, Won’t You Be My Neighbor? and Sorry To Bother You, it was 15% to 20% of all of the sales. We realised MoviePass is a discovery tool — and that is its purpose in the marketplace.”

Spikes does not appear fazed by the subscription models launched by the leading chains, such as AMC Theatres’ suite of AMC Stubs offerings that launched in 2011, and Cine­mark Movie Club, which launched in 2017. He calls those loyalty plans and says MoviePass will create an end-to-end cinematic marketplace that will benefit everyone.

Speaking of brand loyalty, Spikes is confident he can tap into prior relationships and goodwill. “The exhibition community knew me,” he says. “Knowing that the original founder came back, whose vision it was, you’re able to use that brand equity in a different way than if you were just somebody buying it off the shelf and have to rebuild that from scratch.

“The original developers are back with me, a large member of the original team is back and that goes a long way,” he adds.

Prior to the November 2021 buy-back, Spikes commissioned research and found consumers had taken to TikTok to say they missed MoviePass. “We’re tapping into that brand loyalty that we already built and there’s a trust there.” 

• Smaller films play vital role in tempting audiences back to cinemas, new research finds