This summer, MoviePass changed how people go to the movies. In August, it slashed the rates on its subscription-based model for movie tickets, down from as high as $50 a month to a flat rate of $9.95. For ten bucks a month, users could see one movie per day (3-D and IMAX screenings not included), good at 90 percent of the theaters in the country. Dedicated cinephiles could save hundreds every month in their film-going budget, and casual movie-goers had an incentive to head to the theater rather than watch on the home screen. MoviePass hasn’t released recent subscriber numbers, but based on recent press—and its passionate online community of users—MoviePass is having a major impact on the movie industry.
In fact, it’s having enough of an impact that Plano-based Cinemark, which operates more than 500 theaters across the country, has launched its own competing service.
For film superfans, Cinemark’s Movie Club is a pale competitor to MoviePass. For $8.99 a month, the Cinemark pass provides one ticket a month, usable only at Cinemark theaters, saving users a few bucks. (The service does roll over unused tickets to future months, so subscribers can save their tickets from historically slow January and February for the blockbuster summer months.) Fans attracted to the all-you-can-eat approach MoviePass offers are likely to find themselves disappointed.
But Cinemark’s model is designed for a different type of consumer. Although MoviePass appeals to individuals who head to several movies a month, the Cinemark service targets less frequent users. “What we tried to do is design a program not for the person that’s coming to the movies five or six times or seven times a month, but for the person that’s coming … four or five times a year,” Mark Zoradi, Cinemark’s chief executive, told the Dallas Morning News. “Maybe we can encourage that person to come six or seven times a year.” Cinemark offers several other features as well: $9 ticket prices for any additional tickets purchased in a month and a 20 percent discount on concessions.
Cinemark’s less dramatic savings may make it more sustainable. MoviePass’ deal for subscribers is incredible—and its long-term business model can seem equally difficult to believe. Users only pay $9.95 a month, but MoviePass pays theaters the full value of each purchased ticket. That’s a big cash expenditure for a business with limited paths to profitability: it can convince theater chains to participate and give them a big discount (Dallas-based Studio Movie Grill is one of the few theaters that sells tickets directly through MoviePass), it can rely on having enough inactive subscribers to subsidize the heavy users, and it can sell user data to interested companies. Through its Movie Club, Cinemark is testing out a solution to empty seats that may prove more lasting.
While some chains, like AMC, have criticized MoviePass for teaching consumers to under-value their product, others—including Cinemark, which will continue to accept MoviePass—see empty seats as a bigger threat to their model than a discounted ticket price for subscribers. “Anything that helps drive attendance to movies we support,” said Zoradi. At a time when the movie industry is in crisis—when the overall box office gross in 2017 currently sits at $9.855 billion, down considerably from 2016’s $11.375 billion, and endless streaming services tempt consumers to watch at home—any service that gets more people to theaters is a boon for the industry.