Postby Thad » Wed Aug 01, 2018 11:57 am
It could work; the reason it didn't work with Moviepass is that they (1) set the prices too low and (2) had no viable plan for making up the difference. It's the same old dotcom failure: step 3 is profit.
Under the right circumstances, a movie theater subscription service could turn a tidy profit. Alamo Drafthouse is talking about introducing one. Of course the key difference there is that Alamo Drafthouse owns the theaters and is not a third-party service, so it's already got a business model based on treating ticket prices as a loss leader.
When my wife and I go to the Drafthouse, we typically spend about a combined $40 on food and drinks (before tax and tip). I don't know what percentage of that is profit, but there's certainly a number Alamo could charge for a monthly subscription fee where the combined profits from the subscription and food/drink purchases would more than make up the loss in individual ticket sales, and I'm willing to bet that number is low enough that customers would be willing to pay it. (Hell, a lot of Alamo's business model as it is is showing old movies for nearly free. I think tickets to see Princess Bride were like $3 or something, and there's a showing of Horse Feathers in a week and a half that's free if you're a member of their rewards program. So they've clearly already spent some time crunching numbers on how to make a profit while giving tickets away for free, or next to it. Of course, I'm sure studios are asking for a lot less money for the rights to show Princess Bride or Horse Feathers than they are to show new releases -- but the point is, they've got experience figuring out where the sweet spot is where they can take a hit upfront and still turn a profit.)
I think Moviepass's value is going to turn out to be that (1) it demonstrated a demand for this kind of service and (2) it showed the potential pitfalls of offering one. I think we'll probably be seeing movie theater chains start to offer similar services and actually make money at it.
A chain like Alamo, where customers buy meals and beers, is clearly at an advantage compared to a typical popcorn-and-a-soda movie theater when it comes to working out how to profit while eating the cost of a ticket. But I'm betting some of the other chains like AMC and Cinemark can figure something out too.