While speaking at a conference in Los Angeles, MoviePass CEO and Netflix co-founder and former Redbox President Mitch Lowe said their service watches “how you drive from home to the movies” and “where you go afterwards.” In a recent letter to MoviePass customers, Lowe said that he “mischaracterized” how MoviePass locates members.
A Theater Subscription Service
MoviePass is a relatively new service that offers users a subscription service for watching movies in theaters. Users can watch any movie they want once a day if they pay $10 per month (you have to purchase a whole year’s package, though). The company also currently offers a limited-time offer of $8 per month.
However, at first glance, MoviePass doesn’t have a business model that seems in any way sustainable. The company pays theaters the full price for each ticket, which is almost as much as its users pay for a whole month. That means the company loses significant amounts of money for every user who sees more than one movie a month.
A Data Gathering Company
Lowe held a keynote named “Data is the New Oil: How Will MoviePass Monetize It” at the LA conference, talking about how the data the company gathers about its users will enable it to keep prices low and expand the user base.
After being independent for six years but struggling to increase its number of subscribers, MoviePass sold to Helios and Matheson Analytics, a data analytics company. That’s when the company changed its pricing model from $15-$50 a month to only $10 a month. Lowe believed at the time that this was a better price point that would encourage people to come more often to the movies, and he also said that it needed the funding to make that happen.
However, that funding may come with some caveats. At the LA conference, Lowe said that the company is tracking users “from home to the movies,” and “wherever you go afterwards.” This would be part of MoviePass' long-term revenue plan. The company intends to eventually send its users to various vendors, before or after the movies, and for MoviePass to get a cut of those purchases.
Retracting Location Tracking Comments
The CEO now says that he mischaracterized how the service tracks users and that the tracking is much more limited than he first implied. According to Lowe, only two events would prompt MoviePass to know a user’s location: when a member searches for a nearby movie theater, and when they check into a theater.
He then clarified that the app has to be open, and that there is no location tracking happening in the background. This feature did exist within the app, but Lowe said MoviePass removed it in the latest update and that the company never used this feature despite developing it in the first place.
The CEO noted that when the company will partner with theaters and studios, it will offer statistical data based on ticket sales and trends, but it never shares personal user data with other companies.
Lowe also added that if MoviePass desires to expand data collection and sharing capabilities in the future, the company will notify users about this change and allow them to opt-in or opt-out of the service.