“We’ll be over 5 million paid subscribers by the end of the year and buying roughly 20% of all movie tickets” in the U.S., he said in a keynote Q&A at Winston | Baker’s Entertainment Finance Forum in Los Angeles. MoviePass currently buys approximately 6% of all domestic tickets sold.
Asked if he had longer-term projections for how big MoviePass’ audience could grow in 5-10 years time, he said there was room for the U.S. subscriber base to grow 20 million strong.
2019 is also the year Lowe envisions MoviePass turning cash-flow positive, though he stopped short of saying the company would be profitable by then.
The bullish projections come on the heels of dramatic discounts that have sent MoviePass’ subscriber count skyrocketing, making the company a controversial disruptor of the theatrical exhibition business. After languishing for years at a $30 price point, MoviePass is down to $7.95 per month as of February.
To help get the word out about his company, Lowe revealed that MoviePass will soon begin its first marketing efforts on promotional channels including radio and social media.
“We are going to begin to advertise here in a couple of weeks,” he said. “We will be advertising in small markets too in the Midwest because right now all the word of mouth is in Los Angeles, New York and San Francisco. They represent 30% of our subscribers in those three cities. To get those occasional moviegoers, you cant just rely on PR.”
While the ticketing upstart is helping drive business at movie theaters coming off a 20-year low at the box office, giant exhibitors like AMC Theaters have refused to discount the full freight MoviePass is paying for the tickets it resells. That has skeptics wondering how long Lowe’s company can survive.
While he indicated there are no active talks between AMC and MoviePass, which pulled its service from 10 of the theater chain’s franchises in New York City in January, Lowe is hopeful for rapprochement. “We would love to do business with them and think eventually they’ll come around,” he said.
Given another large theater chain, Cinemark, recently deploying a similar service, Lowe was asked if he was concerned. “The chairman reported they have over the past 2-3 months gained 80,000 subscribers,” he said. “I get that in, like, three days, so I’d say no.”
To ease the financial burden, MoviePass is opening new revenue streams like a deal announced earlier this year to get into the acquisition and distribution of select films. Since announcing the first title under the new arrangement, “American Animals” in partnership with The Orchard, Lowe says he has a few more films soon to be announced and could support as many as 12 per year.
He indicated that MoviePass is actively exploring opportunities for global expansion. While Lowe suggested his company will steer clear of international markets like Canada and Mexico where there are dominant exhibition chains that could cause headaches, other regions with less concentrated power including Japan, Australia and parts of Europe are ripe for entry via joint ventures.
“There’s already groups in many countries talking to us about expanding,” he said. “We would do it in partnership with other people who know their markets better than us.”
Lowe also revealed that subscribers will soon be able to post their own movie reviews on the MoviePass app. “When we have tested the ratings for our customers, they tend to rate them much higher than Rotten Tomatoes,” he said. “Part of it is they are getting it for free. Anytime you get it for free the movies are always a little bit better.”
© 2020 PMC. All rights reserved.