MoviePass a Mixed Blessing for Bay Area Theaters

1 min
The Roxie Theater in San Francisco by night. The indie theater has seen an uptick in business in recent months, thanks, in part to the dirt-cheap subscription service, MoviePass. (Photo: Courtesy of Roxie Theater)

The Roxie Theatre in San Francisco has had a good year. Elizabeth O’Malley, executive director of the Mission District-based indie theater, says that it sold 15,000 more tickets in the past financial year than it did in the previous one.

One reason for the surge might be MoviePass, a dirt-cheap subscription service which lets customers see a movie a day for $9.95 a month. It pays theaters the entire ticket price for each ticket sold via its app. That's $12 for every regular ticket sold at the Roxie.

"Anecdotally, our box office managers have said that they've seen an increase in these MoviePass subscribers coming through our doors," O'Malley says.

O’Malley doesn’t credit MoviePass entirely for the increased business, though she says the service has brought some people out who might otherwise have waited to stream the movie at home.

"We are seeing it as a positive in terms of pushing back on video-on-demand as a threat to movie theaters," O'Malley says.

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Launched in 2011 and run since June 2016 by Netflix co-founder Mitch Lowe, MoviePass introduced its cut-rate pricing last August after largely failing to appeal to a wide audience with more expensive subscription plans.

MoviePass CEO Mitch Lowe.
MoviePass CEO Mitch Lowe. (Photo: Courtesy of MoviePass)

A MoviePass spokesman says the service can be used at more than 90 percent of theaters around the country. The spokesperson says the Bay Area is now MoviePass's third largest market in the U.S. after Los Angeles and New York.

Besides the Roxie, the company's website lists a variety of local theaters as honoring MoviePass subscriptions, from indie houses such as 4-Star and Vogue to big chains like AMC Van Ness 14 and Century 20 Daly City.

But the service has drawn criticism from small and big players alike.

A recent article in The New York Times reports that major theaters and studio owners are denouncing MoviePass' business model as being unsustainable because the monthly subscription fee is so low.

"They say that will cause MoviePass to either raise prices or go out of business, disappointing audiences and ultimately hurting the fragile multiplex business," writes reporter Brooks Barnes.

"We are constantly looking for new ways to improve and expand service," Lowe says. "Right now, in addition to the subscription model, we are also building out additional revenue streams related to the movie-going experience." Lowe adds his company has no plans to increase subscription prices in 2018.

Meanwhile, O'Malley is unhappy with the lack of a sense of partnership between her theater and MoviePass.

"We've appreciated the uptick in business because of MoviePass, but would really love to be a more collaborative member of the MoviePass community."

O'Malley says there's no way to contact MoviePass directly if a customer issue arises. Also, she says MoviePass isn't set up to deviate from the standard $12-a-ticket compensation structure when the Roxie wants to do special programming (e.g. asking customers to pay $15 for a double feature).

"So when MoviePass subscribers come through the door, they have to pay the extra out of pocket," O'Malley says. "That three dollar difference is just a confusing experience for our customers."

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