Film Fund-amentals: The Movie Pass Revolution

Early this month, a quiet revolution started in movie theater management. Called Movie Pass, it is a rapidly emerging new system that links the box office straight to the digital universe. It is simultaneously ticking off theater managers across the country while developing a growing list of enthusiastic subscribers. Hollywood companies are roughly divided between opposition and support and are mostly waiting to see further developments. Some folks in the indie business thinks that it just might be the ticket to the future for low budget films.

Personally, I think everybody is half-right. That also means that they are half-wrong. I think I just covered all my bases.

The system was originally beta tested in San Francisco in the summer of 2011. It quickly discovered that there was a market for the system, and was only forced to shut down the testing prematurely due to the opposition of both the AMC and Landmark theaters. The theaters objected to the fact that they had never been consulted about the test. Admittedly, this showed poor judgment on the part of Movie Pass. However, it also suggests some ripe stupidity on the part of the theaters.

The core structure of Movie Pass is that the subscriber pays a monthly fee, roughly $30 to $50 a month, depending upon the region. At the theater, the subscriber goes to the credit/debit card ticket machine and uses the Movie Pass card. Movie Pass pays the theater the full admission price. Basically, the theater gets the admission fee no matter what. The money isn’t the issue.

Most major theater chains (such as AMC) have been trying to set up and run their own online value ticket clubs. For the most part, these offers and clubs are very badly designed for the consumer. In some cases, any slight discount on the ticket is negated by a transaction fee on using the system. Besides, with some of these systems you still have to go through a line at the front desk, with your credit card, to get the ticket that you had earlier purchases online, with your credit card. The apparent convenience of the online purchase doesn’t quite match up with the squirrely complexity of the actual process.

Movie Pass pretty much gets around these problems. They have, in part, done so by revamping the system and moving it further into the digital zone. You now use an app on your smart phone. Once you are within a 100 yards of the theater, you click the app. The app confirms your location and clears you for that theater. Then you use the Movie Pass card at the credit ticket machine. The theater still gets the full admission for the ticket but is otherwise completely bypassed in the process now, where previously they were involved just enough to complain. Yes, the theater managers have just talked themselves out of the loop.

Ironically, the test run last year strongly indicated that the Movie Pass system caused an increase in attendance. In the beta test, there was a 64 per cent increase in movie attendance. Some of that may have been due simply to the novelty factor. The real long term increase may drop to somewhere around 30 per cent. Either way, this is a tremendous boast to the theater system. It is also substantially better than anything produced by the various in-house clubs operated by the theaters themselves.

It appears that people using the Movie Pass are open to going more often to the movies and also to trying a wider range of possible films. This is where the indie issue comes into play. Theoretically, the Hollywood block busters and the low budget movies could have a balanced co-existence. One day a person goes to The Dark Knight Rises. The next day they can check out Moonrise Kingdom. Everybody gets a slice of the pie. Suddenly, life is good.

And this could happen. The business model behind Movie Pass is pretty sound. For people who either go to the movies four or more times a month (or who might want to do so), it is a solid bargain. In principle, every one makes money. Even the smart phone companies. It’s win-win.

Oh, did I mention the business model that underlies this beautiful system?  Basically, the app you use before you get into the theater alerts Movie Pass as to your location. The purchase of the ticket tells them what movies you are seeing. The social network system designed to connect you with other viewers (come with your subscription) gives them access to your tastes, attitudes, and opinions. They are creating an enormous and incredibly efficient data mining system for analyzing the movie audience for various forms of marketing. I half suspect that the app even tells them how many times you go to the restroom during the movie.

So the whole thing is a movie lovers’ bargain dream come true. You can also kiss your privacy goodbye. Personally, this leaves me a bit conflicted. I admire the brilliance of the concept and I can safely predict that this is here to stay, thrive, and quickly dominate movie marketing within the immediate future (either through Movie Pass or rival systems that will quickly spring up). I only wish I had some stock in this company.

But the data mining thing always gives me pause. Sure, the information gathered through the system will provide people in the film industry with the most extensive audience model known. Unfortunately, the same will be true of everything else imaginable from political organizations to shampoo companies. Such massive information gathering is extremely profitable for the company. But it kind of leaves me feeling like Patrick McGoohan back in The Prisoner.

Besides, this app could become even more interactive. The next time I doze off during a Transformers flick, I’ll get a wake up call. Cripes!  They could even make me watch the movie.