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> MoviePass drives traffic to movies

Does it? Were those people going anyway? Would they go if they had to pay one cent more?

They’re just a middleman aren’t they? How are they driving anything or adding any value?

> that's a $20+ ticket that AMC can't sell to a paying customer

But the subscribers are paying customers aren’t they? Do you mean they can’t sell it to another paying customer? So you’re just saying they can’t sell things twice?

I'm saying that for $20 per month, an AMC A-Lister can easily use $40, $50, $60+ of premium tickets at full opportunity cost. The terms of the A-List program encourage users to reserve the company's most valuable inventory. It would be like an all-you-can fly program... if users were restricted to economy seats on low-volume flights, it might be profitable for the airline. But AMC is encouraging its customers to reserve first-class seats on the busiest routes at the busiest times, displacing other customers who would pay cash for those premium seats.

It is an anecdotal response to your first point, but since you didn't place a threshold I'll say it anyway.

I have two friends who I'd describe as average theatre goers. Maybe a movie every 2 - 3 months. Since using MoviePass they both average about two movies a month during 2018. I am not sure how sustained that behavior will be, but at atleast in this early stage it is lasting.

As for the second point, he is arguing they never sell the ticket once. AMC does not get the money if the subscriber does not attend the film. So by fighting with MoviePass (as they have been), they never sell the ticket once.

So the studio gained audience but (excluding the MoviePass susididy) not any money so what’s the benefit of that? In fact they might be setting an expectation that film tickets should be lower in people’s minds!

If you give me free tickets to the cinema I might go. If you say now I’m in the habit can you charge me $1? No thanks not worth it now.

The benefactee in this scenario is the theater chain, not the studio, as they make most of their real profit from concessions, not selling seats.

Is the thrifty MP user the same one that buys overpriced stuff from concession stands, though? I suspect the old candy in the pocket ahead of time trick would be in use.

Only if the MoviePass customers actually buy concessions. One of their issues with trying to leverage smaller theaters is that MoviePass customers didn't purchase sufficient concessions to justify cutting MoviePass in on any of the theaters' revenue streams.

AMC's subscription plan is especially attractive to high-volume users on which it will likely lose money, further, it encourages them to use their free tickets at peak times for the most popular movies in the most expensive formats. When an AMC subscriber in NYC reserves a seat for a Marvel film in IMAX on opening weekend, that's a $20+ ticket that AMC can't sell to a paying customer because the theater is sold out.

- AMC made a deal with the studios. All movies are accounted for as being purchased for $8.99. AMC then pays the studio 40-60% of that price.

- Thd turnover of AMC movies isn’t that great. I doubt they have more than 8 new movies in a month - even fewer that a person wants to see

- Concessions are a high profit margin product. The average movie goer was already paying around $5.00 in concessions. They will probably pay more now since the movie was “free”.

- the subscription plan is not available for anyone under 18. If you take your kids they pay full price for the movie and concessions.

I can’t find the article now where I saw this. But the $8.9@ per movie price was widely reported.

The WSJ article says that's for standard 2D films. But A-List encourages subscribers to see 3-D, IMAX, Dolby, etc. It also says the studios aren't on board with the $8.99 figure and are seeking changes in AMC's calculations.

https://www.bizjournals.com/losangeles/news/2018/06/25/amc-s... https://www.wsj.com/articles/hollywood-studios-fear-amcs-new...

The studios are not going to sit back and accept just $5 per admission to Black Panther on 3-D IMAX on Saturday night of opening weekend, when that ticket retails for $18-25 (depending on location). Studios usually collect 80-90% of ticket revenue for big movies on opening weekend.

I can’t find the numbers now, but Imax did make some kind of deal with AMC.

https://deadline.com/2018/06/imax-approves-amc-theaters-new-... By “wouldn’t affect the overall economics”, I assume they meant that AMC promised them that the offset in revenue would be made up by the number of people seeing IMAX or they would make up the difference. Not they are paying full cost.

Of course IMAX is on board with AMC's plan. IMAX was one party that was credibly threatened by MoviePass, since MP customers were prevented from purchasing IMAX tickets. MP customers will see Mission Impossible tonight in normal 2D for free, reducing the demand for IMAX.

AMC completely flips the script. Its members can see IMAX films without any premium cost, even on opening weekend. Regular screen, or 3D IMAX for the same cost (both for free)? Of course, let's go see IMAX.

The problem for AMC is that it is now on the hook for paying the IMAX premium. Your article says, vaguely: "the theater chain will ensure there is no reduction in Imax’s overall economics." So it's a no-lose proposition for IMAX but AMC now has to cover the cost of tickets sold to A-Listers.

Here is a link to Regal theaters showing Mission Impossible tonight: https://www.regmovies.com/movies/mission-impossible-fallout/... Notice how nearly every showing says "No Passes"? That's because giving away a free seat to a sold-out show reduces ticket revenue. That's been basic policy at movie theaters for decades. AMC has decided to toss that model out the window.

The best I can infer, is that simplistically the deal will be if they expected to make $X from IMAX based on Y people showing up before the subscription, as long as they make at least $X or slightly more than $X, IMAX will be happy with the decreased cost per ticket.

Except Moviepass is skating by on VC money with only vaporware monetization through data mining, and AMC can afford to wait them out.

Nash equilibrium here is Moviepass dying off regardless of communication/collaboration. Introducing a competing service will only speed that up.

You have any proof to back up this claim? My hunch is that the heaviest movie pass users were already heavy movie goers.

Likely true, but when you drop the consumer's marginal cost to zero, consumption will increase. Even if it was reasonably high to begin with -- i.e. 3x per month to 5, 1x per week to 2-3.