This is sort of like Amazon's tactic with ebooks and such. Lose until your volume is high, then when you've cornered that particular market, negotiate a workable cost per unit.
I really hope it works out -- but in all sincerity, I don't see why the theaters themselves aren't just copying this for their chains. MoviePass has already demonstrated the market.
I don't see how it makes sense to copy a strategy that loses money when someone else is already following that strategy and going broke due to all the money they're paying you.
The strategy only loses money because they are paying full-retail price for movie tickets.
AMC's A-List (costs $19.99) does not pay $9-$13 per showing a la MoviePass. They pay the same space/personnel costs per seat they always have. Tickets have never been a theater's largest or most desirable source of revenue.
It was my understanding the ticket price basically covered the film licensing cost, the movie theater made basically zero profit of that. They make their profits off concessions. I don’t know if that’s true still or not, but used to be the case.
They've done this in the UK for at least a decade. The two biggest chains each have an unlimited subscription service. They're both £18 though, so a lot more than moviepass
And to me that means Moviepass has done its job. I subscribed to the annual Moviepass plan, tried to use it last night (which failed, see article), so signed up for the Cinemark Movieclub, which lets me buy tickets online, and days in advance.
I really hope it works out -- but in all sincerity, I don't see why the theaters themselves aren't just copying this for their chains. MoviePass has already demonstrated the market.