The subscription service MoviePass says research demonstrates that it can help theaters attract crowds and claims that its $30 to $45-a-month program boosts attendance by 111%.
The Netflix-like service has been eyed warily by exhibitors, who are concerned that it will cut into their bottom line and prevent them from setting ticket prices.
With CinemaCon, an annual exhibition industry confab happening next month in Las Vegas, MoviePass is hoping that the results will prove it will increase revenues for theater owners and help them appeal to millennials.
“People may not listen to ideas, but they listen to numbers,” said MoviePass founder Stacy Spikes. “The numbers are overwhelming and they’re headed in the right direction.”
Assembled by Mather Analytics, a subscription analytics service that counts newspaper and magazine companies such as Meredith and Tribune as clients, the results show that MoviePass is driving business at off-peak times and with a demographic that’s harder and harder for exhibitors to attract.
MoviePass boosts mid-week attendance by 50%. Seventy five percent of the company’s subscribers are under the age of 35 and the average age is 26. That’s important, because moviegoers between the ages of 18 to 39 have been in a downward trend in recent years, hitting lows in 2014.
“The younger, harder to get to come to theaters, we’re finding they are the ones who are signing up,” said Spikes. “It’s generational. With Netflix, Spotify and Pandora, millennials are in the habit of consuming things through subscription services.”
MoviePass subscriptions offer users unlimited access to movies playing in standard formats, but most plans don’t provide tickets to 3D, Imax or other premium large format showings. Spikes declined to say how many subscribers the services currently attracts.
The domestic box office reached record levels in 2015, fueled by blockbusters such as “Jurassic World” and “Star Wars: The Force Awakens.” However, attendance in recent years has remained essentially flat, and some of those increases can be attributed to higher ticket pricing and surcharges on 3D and other formats. The exhibition sector is also under pressure from digital forms of entertainment and higher quality television programming, which gives movies more competition.
MoviePass has undergone several iterations since it first launched in 2011 without ever gaining widespread acceptance from major theater chains. Exhibitors have refused to work with the company or tried to boycott the product. In 2014, it made some headway, partnering with AMC on a pilot program in Boston and Denver.
MoviePass subscribers spend 123% more on concessions. Exhibitors make the bulk of their profits on snacks, and particularly popcorn sales, which carry healthy margins. The average moviegoer spends roughly $120 a year on concessions, but MoviePass users spend close to $400 annually, Spikes said.
To gather its data, Mather looked at MoviePass users in two markets from July 2014 through December 2015. It tracked customers who belonged to an unnamed exhibitor’s loyalty program before and after they signed up for the service. The company did not say how many people it followed, other than that it was in the “thousands.” It looked at consumer behavior in two major markets, finding in one zone the average monthly attendance went from 1.56 visits to 3.12, while in the other zone it jumped from 1.58 to 3.54.
“The size of the increase was larger than we expected,” said Mather President Matt Lindsay. “The pricing model removes the marginal cost of going to another movie, so people have more incentive to go again.”
