MoviePass has dropped a few AMC Theatres from its popular movie ticket subscription service. Subscribers will no longer be able to get tickets to select AMC locations in major U.S. cities, such as New York, Los Angeles, Boston and Chicago, PC Magazine reported.
The MoviePass service allows consumers to buy a monthly subscription for movie tickets for $9.95 a month. Yet MoviePass actually pays full price for movie tickets at AMC Theatres, according to AMC CEO Adam Aron. Each ticket costs $11.88 — more than the price of the monthly subscription.
Helios and Matheson Chairman and CEO Ted Farnsworth, whose firm lowered the service’s price point from $30 after it took a majority stake in the company, said MoviePass has seen a dramatic increase in movie theater attendance among its subscribers. Farnsworth said many movie theater operators are interested in partnering with MoviePass — but not AMC.
“Other theater companies have seen this attendance resurgence and have approached MoviePass to collaborate,” Farnsworth said in an email to PYMNTS. “Since the get-go, AMC has not been interested in collaborating with MoviePass — a move that is not in the interest of our subscribers and AMC theatergoers.”
Farnsworth said MoviePass represents a large part of AMC’s business — approximately 62 percent of AMC’s operating income, assuming that AMC is flat year over year. He said that equates to $34.4 million of gross profits to AMC in the upcoming quarter — or over $135 million on an annualized run rate basis.
According to Farnsworth, MoviePass customers can also bring in concession revenue. Based on AMC’s public financial results, which show each customer spends $4.88 on concessions each visit, MoviePass customers could bring in an additional $17.1 million in AMC concession revenues for Q1 of 2018 — or $68.4 million on an annual run rate.
MoviePass pulled only 10 theaters, which represents only 2 percent of its theaters, Farnsworth said. Going forward, MoviePass CEO Mitch Lowe said the company will continue to offer subscribers movie tickets to other locations.
“Our number one goal as a company is to provide an accessible price point for people to enjoy films the way they’re meant to be seen: on the big screen,” Lowe said in an email to PYMNTS. “Many exhibitors have been receptive to this mission, and we’re excited to keep working with theater chains that are closely aligned with our customer service values.”