Happy New Year, everyone!
One of my Christmas presents this year was a one-year subscription to MoviePass, the $10-a-month service that pays ticket costs for its subscribers to see up to one movie per day. I’ve used the service twice so far, taking in Pixar’s Coco and the Hugh Jackman/Zac Efron vehicle The Greatest Showman. And I’ve been keeping an eye on movie theater chain reactions to it. And it occurs to me that MoviePass bears even more similarity to Amazon than I’d previously suspected.
I’d already reported on some movie theater chains’ fears that MoviePass could depress the already imperiled movie theater market by going under, leaving behind a million subscribers who don’t feel like paying full price for movies anymore. So movie theater chains are afraid of MoviePass failing.
But others are just as afraid of MoviePass succeeding. In this piece from The Portland Mercury, theater chain operators in Portland, Oregon express their suspicion of any service that offers deals that look too good to be true.
Similarly, theater owners doubt MoviePass can continue to operate without either raising its price—which [MoviePass CEO Mitch] Lowe has claimed he won’t do—or demanding that theaters sell tickets to MoviePass at a discount, which could force some theaters to close. Living Room Theaters’ [CEO Steve] Herring laid it out plainly: “What’s to stop them [from saying], ‘We control 50 percent of your customers. You’re going to give us a kickback on those.’”
And this exactly echoes the fears expressed by Big Six publishers that Amazon, emboldened by the success of its $9.99 Kindle bestseller titles, would one day demand that publishers lower their wholesale ebook prices or it would kick them out of the store. Those are the same fears that led to the publishers and Apple illegally conspiring to force Amazon to raise its prices, and then getting slapped down by the Justice Department.
The strange thing is that this comes right at a time when theatrical movies seem to be exhibiting an increasing sense of desperation. Both times I went out to see movies within the last week, Coco and The Greatest Showman, there was a brief introductory clip before the movie featuring staff or actors from the movie thanking viewers profusely for coming out to see the film in theaters, the way it was meant to be seen. And at the end of the credits to The Greatest Showman was a note that producing the movie had supported over 15,000 jobs.
At first I wondered if this was the studios’ latest attempt to guilt-trip people out of pirating the movies, just a bit more subtly than running patronizing ads informing viewers that they wouldn’t download a car. But on thinking about it further, I wonder whether it’s more that declining theater attendance is really starting to worry movie studios. This isn’t exactly a new trend—I remarked on it back in 2011—but given the leaps and bounds by which streaming services have grown in the last few years, perhaps it’s finally starting to reach a tipping point.
In this desperation, I read another book-related parallel—the plight of bookstores, most notably Barnes & Noble, in the Amazon era. After all, book sales are the metric by which the success of books are judged—and without bookstores, readers won’t be able to browse wide selections of new titles and find and buy more books they’d like.
Movie studios are in much the same pickle as movie theaters decline. Even though streaming services are keeping people home in droves, the box office is still considered the yardstick for success or failure of movies. Movies that flop at the box office might well turn a profit in home video, but they won’t get sequels if they’re perceived as box office poison. If box office revenues decline to the point where movies can’t turn a profit no matter how good they are, that’s going to break their yardstick but good.
And studios are in an even worse position with movie theaters than publishers are with bookstores. The competition for bookstores at least sells the same product as the bookstores—a sale from Amazon is equivalent to a sale from a bookstore in terms of pushing a book up the best-seller lists. But the movie theaters’ “Amazon” are services such as Netflix and Hulu, which show older films and original productions—so someone who stays home with Netflix isn’t helping cover the costs of new movies.
(Some studios are starting to diversify into streaming video services themselves, but only for the sake of their back catalogs. Movie theaters have already demonstrated they won’t stand for any attempt to release new movies simultaneously in theaters and on streaming services.)
And into this declining market marches MoviePass, which could have the potential to offer hope to movie studios—if it can succeed. And some movies are already seeing an effect. A Bollywood movie blog has noted that the latest crop of movies from India to open in American theaters are seeing a noticeable bump in revenue. The blog attributes this directly to MoviePass subscribers deciding to take in Bollywood titles since they don’t have to pay their own money for them.
It makes sense that movies with relatively small dedicated American audiences would see the biggest bump from curious MoviePass subscribers. There might even be more MoviePass subscribers who decide to take a chance on a free-to-them movie ticket than there are American Bollywood fans accustomed to paying full price!
And likewise, small theater chain Studio Movie Grill, which serves moviegoers with full-fledged drinks and dinners during its shows, has also reported significant increases in off-peak and smaller film attendance as a result of its partnership with MoviePass.
Movie theaters are fairly conservative businesses, and have been increasingly on the defensive over the last few years as their audiences dwindle. It’s not at all surprising that many of them would react badly to anything that smacks of further disruption to their industry.
But if movie studios and distributors were wise, they would see what they could do about bypassing the theaters and partnering with MoviePass themselves. (At least one already has, according to a stock analyst’s endorsement of MoviePass’s parent company.) If the studios are getting desperate enough to tack on ads about how awesome theatrical movies are to movies people are already seeing theatrically, then surely they can see a point in promoting a service that promises to get more butts in seats—especially if the service is paying the full price of those butts’ tickets.
Movie theaters aren’t standing still when it comes to trying to draw more people out, of course. They’re replacing plain-old theater seats with reclining easy chairs and offering reserved seating rather than first-come-first-served cattle calls. Similarly, bookstores like Barnes & Noble are trying various things to improve their establishments, like applying for liquor licenses or hosting game nights. But while these things might be nice, they’re not necessarily changing the fundamental nature of the service, or addressing customer reluctance to go to the trouble of coming out.
But when it comes to drawing people out, you just can’t beat giving them something for nothing—or even just what feels like something for nothing. So far, I’ve seen two movies I’d never have paid to see on my own, and I anticipate seeing even more when the weather warms up and more movies I want to see hit the theaters. The question is, how much opposition are movie theaters going to put up against a company that just wants to put more butts in their seats—and will it lead to something like the publishers’ conspiracy against Amazon?