Yesterday, MoviePass, a company that allows its subscribers to see unlimited movies for a monthly fee, slashed the price of that fee. The internet ran with it, and now MoviePass is trending all over the web, especially on reddit. User Mdude2312 created a simple website that allows you tocheck if MoviePass is available in your zip code, and the post where he states this is, as of writing this, is at the top of the r/movies subreddit.
So, it’s safe to say that MoviePass is a hit. However, as with any company on the verge of massive success, there’s somone out there looking to scause legal trouble for the startup.
AMC Theatres is threatening legal action against MoviePass, likely in response to their incredibly low new pricing. AMC is the worlds largest theatre chain, and a lawsuit like this could threaten the longevity of MoviePass as a player in the industry. However, this isn’t MoviePass’ first lawsuit either; they’ve seen countless attempts from theatres to shut them down since their debut back in 2011. Still, having to deal with the worlds biggest exhibitor may prove problematic for a company that has yet to go public.
AMC is likely scared that MoviePass will end up killing their rewards program. After all, theatres make most of their money from concessions, and if less people use their program because of some pesky company like MoviePass, less people might end up buying their concessions. However, that logic only works under little amounts of scrutiny: if MoviePass increases turnout overall, wouldn’t that increase concessions regardless of any rewards program?
Regardless of such speculation, Mitch Lowe, the CEO of MoviePass (and former executive at Netflix,) doesn’t seem that concerned about legal action. In an interview with Variety, Lowe remarked that he’s seen this type of behavior before.
“This is so much like Blockbuster was when we rolled out Netflix or Redbox. It’s the big guy being afraid of the little guy offering better value to consumers.”
Lowe’s confidence in MoviePass is reassuring, but he’s still in a tricky situation. If a majority of customers utlize their subscription, they’ll be facing huge financial losses. After all, MoviePass purchases tickets for their subscribers, and relies on subscribers who go to the movies infrequently enough to get a net profit. Maybe the hype will die down for MoviePass, and the model will become sustainable for the young company, but if it doesn’t, the subscription price will has to rise back up to account for their increased business.
Stay tuned, there’s sure to be more developments with this story coming our way soon.[via Variety]