MoviePass to Roll Out Service Upgrade Options After AMC Stubs A-List Introduction (SCN)

Just a few days after AMC Entertainment added the new AMC Stubs A-List subscription tier to its rewards program, MoviePass informed subscribers over the weekend that it plans to roll out three new features — including two upgrades — to its base $9.95 a month service “in the coming weeks,” after testing them with members. As part of what MoviePass said was the “next phase in the evolution of our product,” the company said its 3 million subscribers will be able to opt for “Bring-A-Guest” and “Premium Showings” options, each involving an extra charge.

The latter option makes MoviePass more competitive with Stubs A-List, allowing MoviePass members to access RealD 3D, IMAX 2D or 3D, and other premium large format showings of any movie for an unspecified additional upgrade fee. Under the base MoviePass plan, members can currently only see 2D movies on a non-premium large format screen.

With Bring-A-Guest, members will be able to buy extra tickets to a showing of a movie right from the MoviePass app, enabling them to “seamlessly reserve seats” for them and their friends (at e-ticketing partner theaters) to watch a film even if those friends aren’t MoviePass subscribers, the company said. As an added benefit, if a friend signs up for MoviePass within 24 hours after a guest purchase, the company will refund the entire cost of that first ticket, it said.

That new option stands to weaken one flaw with the ticket buying process that the Media & Entertainment Services Alliance (MESA) recently pointed out: the hassle involved in buying tickets for non-members separately, especially when it’s a movie that just opened and tickets are being rapidly purchased. That situation becomes even worse when it’s a theater with reserved seating.

While those first two new MoviePass options clearly fall into the category of enhancements, the third new feature, “Peak Pricing” is an added surcharge that offers no benefits to members. Explaining it to members via email, the company said:

“Rather than raise our prices or limit viewings, our plan has been to develop a new variable pricing system based on the demand for particular showtimes. Under this plan, if the combination of demand for a title, date or part of day is higher, subscribers may be asked to pay a small additional fee depending on the level of demand. You can avoid this peak surcharge by choosing an alternative date or film. We will also soon give subscribers one ‘peak pass’ per month, allowing them to waive a Peak Price surcharge once per month.” But current annual and quarterly subscribers “will not incur peak pricing until their current subscription term ends and then renews,” MoviePass said.

All three new MoviePass features are being tested now and “will slowly roll out to all our members over the next several weeks,” it said, adding: “Our aim is to create the most flexible and cost-efficient product, so that we don’t have to simply raise the price on the subscription.”

MoviePass also recently introduced a $7.95 a month plan under which subscribers can only see three movies a month.

In announcing AMC Stubs A-List, AMC said rewards guests can see “up to three movies per week” and get “all the benefits of AMC Stubs Premiere” for $19.95 a month.

A-List members can see any movie, at “any available showtime, any AMC location, any format — including IMAX at AMC, Dolby Cinema at AMC, RealD 3D, Prime at AMC and BigD.” The new subscription tier can also “be used at the spur of the moment or also can make planning ahead days or weeks in advance possible, as securing tickets is made easy via reservations capabilities on the web site, or on the AMC Theatres smartphone app.”

Analysts reacted positively to AMC Stubs A-List, which became available to subscribers June 26.

“In our view, AMC’s A-List is a compelling consumer proposition compared to MoviePass despite the higher monthly price,” Goldman Sachs analyst Michael Ng said in a research note. That’s because “subscribers can (1) reserve seats online, allowing moviegoers to see highly anticipated blockbusters on their release date; (2) experience movies in premium formats including IMAX, Dolby Cinema, RealD 3D, Prime, BigD; and (3) partake in a customer loyalty program, providing participants the opportunity to accumulate rewards points, utilize food and beverage upgrades & refills, waive online ticketing fees, and skip the line at both concession stands and the ticket counter,” he said.

Predicting Stubs A-List will prove to be “another nail in the MoviePass coffin,” Wedbush Securities analyst Michael Pachter said: “Comparing MoviePass and AMC Stubs A-List, it is clear there are pros and cons for the moviegoer to consider, but we think AMC’s offering is overall more compelling for all but the most price-sensitive moviegoers.” IMAX, meanwhile, is a “clear beneficiary of A-List” because the new AMC service “effectively levels the ticket price for IMAX,” as well as Dolby and other premium large formats with standard 2D screens, he said.

Movie studios, however, might not be greeting AMC Stubs A-List so positively, according to a Wall Street Journal report, which claimed Hollywood studios may “seek changes to [the] new MoviePass rival because of concerns about how the service determines their cut of the sales, according to people with knowledge of their thinking.”

Warner Bros. declined to comment about AMC’s new service and the other major studios didn’t immediately respond to requests for comment.

Despite MoviePass adding the two options that could help its subscription service better compete against AMC Stubs A-List, MoviePass publicly seemed to welcome AMC’s rival service with open arms. In a June 20 tweet, MoviePass knocked the AMC plan, saying: “Twice the price for 1.4 the theater network and 60% fewer movies. Thanks for making us look good AMC!”

In a separate tweet the same day, MoviePass said: “AMC has repeatedly disparaged our model as a way to discourage our growth because all along they wanted to launch their own, more expensive plan. We want to make movies more accessible, they want more profit.”