Producers, executives, and a studio chief congregated at Republique, a chic West Hollywood bistro, on Tuesday night to get the details on MoviePass, a controversial new ticketing service that’s upending the exhibition industry. The A-list gathering was the brainchild of Jeremy Zimmer, the CEO of UTA, one of Hollywood’s top talent agencies.
It comes as MoviePass is ramping up its courtship of movie studios and talent, having been met with fierce resistance by theater owners, many of whom view the service in almost apocalyptic terms. Privately, some studio executives admitted they were skipping Zimmer’s dinner in order to stay in exhibitors’ good graces. Zimmer said he organized the bread-breaking so that filmmakers and the studio suits who greenlight movies will have a deeper understanding of a service that’s deeply polarizing.
“I wanted to dig deeper to understand what we agree on opposed to the things we are concerned with,” said Zimmer.
Guests at the soiree included “Get Out” producer Jason Blum, Illumination Entertainment CEO Chris Meledandri, Lionsgate Motion Picture Group co-chairman Joe Drake, Annapurna Pictures president Marc Weinstock, Temple Hill Entertainment chief Marty Bowen, and entrepreneur and attorney Chris Kelly. They were joined by UTA co-president David Kramer, UTA Independent Film Group head Rena Ronson, and UTA Board of Directors member Blair Kohan.
MoviePass has attracted more than two million subscribers after slashing its pricing last summer. The service costs less than $10 a month and allows users to see a movie a day. That’s a good deal considering that a ticket to a single movie in major cities such as New York or Los Angeles routinely cost upwards of MoviePass’ monthly subscription fee. The company is operating at a substantial loss as it builds market share. It pays movie theaters full price for the tickets its customers buy, essentially subsidizing their moviegoing. They believe that the data they collect on ticket buyers will be so valuable that they will be able to either sell it to exhibitors or studios or work out some kind of revenue-sharing arrangement that will make them profitable.
Critics poke holes at a business model predicated on massive losses, and predict MoviePass will quickly run out of money. They worry that in the process, MoviePass will drive down the value of the theatrical experience by getting people accustomed to the idea that paying a bargain monthly fee will entitle them to nearly unlimited access to cinemas. And resistance is hardening. In recent weeks, MoviePass pulled its services from ten highly trafficked AMC locations, leading to a war of words between the two companies.
Despite the resistance, MoviePass is plugging ahead. The company’s CEO Mitch Lowe and Ted Farnsworth, CEO of MoviePass’ parent company Helios and Matheson Analytics, are in Los Angeles this week to take meetings with studios and members of the creative community. In sit-downs, they’ve been sharing details about the data they collect on consumers, hoping to prove the service’s utility.
“Ted and I are in L.A. to celebrate the Oscars,” said Lowe. “We’re trying to help the film industry’s creative side understand that we are a positive force for re-energizing moviegoing.”
The Zimmer dinner was attended by roughly 20 guests. Lowe addressed the group, sharing data that showed that MoviePass increased ticket-buying for awards-season films, and then the guests broke into smaller groups. Zimmer said that his guests were attracted to the possibility of collaborating with the subscription service.
“Everyone was intrigued to see how they can work with MoviePass to help enhance their marketing strategy and ultimately the box office success of their films,” said Zimmer.
Zimmer said he first got interested in MoviePass after talking to Kelly, an investor in the service and a member of its board. The super-agent had been concerned with modern movie economics. He notes that most major studios are in the tentpole business, making movies with $200 million budgets that cost tens of millions to market and distribute. That works when a studio is producing a “Black Panther”-size hit, but it’s unrealistic for smaller movies that can’t afford to spend that kind of cash to find an audience.
“With a $20 million or $30 million movie, a more outsized marketing budget makes it untenable. As a result, the mid-tier films are forced onto other distribution platforms,” said Zimmer. “I believe that we need to focus on innovation to solve this problem and MoviePass may be part of that innovation cycle.”
MoviePass says its model allows moviegoers to take a risk on films that they may be otherwise inclined to skip or wait until they premiere on home entertainment platforms. The subscription model convinces them to ramp up their moviegoing in a way they wouldn’t do if they were buying tickets on an a la carte basis, the service argues. It claims that it has generated $110 million in tickets for this year’s crop of Oscar-nominated films — a crop that includes the mid-budget likes of “Lady Bird,” “The Shape of Water,” and “Phantom Thread.”
Zimmer was partly inspired to examine MoviePass’ concept in more detail because of a podcast he’d been listening to called Business Wars. One episode detailed Netflix’s rise as a home entertainment powerhouse and the collapse of Blockbuster as the go-to destination for movie rentals. Zimmer sees parallels with the current debate over MoviePass.
“We have seen historically that rather than embrace and partner with technology, businesses have kept walls up around the garden,” said Zimmer. “It’s not sustainable.”
“Technology and innovation are disrupting our business at a pace we’ve never seen before, yet a large part of the community has not participated in this innovation,” he added. “I would encourage all the players in the ecosystem to at least be open and curious. It’s critical for their success.”
(Pictured: Jeremy Zimmer.)