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MoviePass CEO: The Subscription Model Is the Future for Theaters

September 06, 2017
Staff

WRITER

MoviePass CEO Mitch Lowe joined Glenn on radio Wednesday to talk about his company’s subscription business model and why movie theaters should actually be excited about people seeing unlimited free movies. He explained why MoviePass was first designed for millennials, a generation accustomed to subscribing to everything.

“We realized that what we really needed to do is to reinvigorate, especially, millennials,” Lowe said. “They talk themselves out of going to the movies. … ‘I’ve already got Netflix or Hulu; I’ll just wait and see it then.’”

For one fee, people can use MoviePass to see as many movies as they want to each month, as long as they don’t go to more than one movie per day or see the same film twice. MoviePass recently dropped its price from $50 to just $10 per month.

Movie theaters benefit from people being in the theater and buying concessions, so they should welcome a subscription service that encourages people to come to the movies, Lowe asserted.

“I think the movie theater experience is just totally changing,” Glenn said. “I think the future is putting me into some sort of cocoon where I never, ever want to leave.” As an example, he cited local theaters that serve people food while you watch the movie.

This article provided courtesy of TheBlaze.

STU: You can give your critique on the script too. The coauthor of American Assassin. Tomorrow, he joins us. The beginning of this hour on tomorrow's program. But one of the things that I love about movies and I have a new appreciation of them and can go to much more of them because of it is called this ridiculous movie called MoviePass.

GLENN: I don't -- there's something wrong here.

STU: It's ridiculous. There's something wrong. It's too good. When it's too good to be true, it means it's too good.

GLENN: Right. Mitch Lowe is here. He's the CEO of MoviePass.com. And, Mitch, I personally may put you out of business because I see too many movies. So...

MITCH: Hey, that's what we want. We want to reinvigorate the movie theater going. So we would love to see that.

GLENN: Okay. Honestly, I'll bankrupt you. I see almost every movie made, and I love to go to the movies. It is a pastime with me and my family. But we see probably a minimum of four movies a month. And under your service, I pay $10, even in New York where the ticket is $16, and I can go see any movie I want and I can see as many movies as I want, as long as it's not the same one over and over again, right?

MITCH: That's right. It's one a day. It's one a day.

GLENN: So how is that working for you? I'm trying to figure out the business model. How does that work?

MITCH: So here's the thing: Yes, there are about 11 percent -- 36 million people in the US and Canada that go to a lot of films every month. They go to roughly 18 films a year on average, and they buy half of all the movie tickets. But there's 51 percent of the population that go to less than a movie a month, and that's who primarily join our service. So, yes, everybody like yourself who goes to lots of movies joins. They get huge value, and they tell everybody about it. But the majority of our subscribers are people who go to three to six films a year prior to joining MoviePass. When they join, they double the amount of films they go, so now they're going to six to 12 movies a year.

So the majority of our subscribers roughly go to one a month. And then there's a small group of people who end up going five, ten times a month. And it drives up the average a little bit.

GLENN: Okay. So it's 9.95 a month. It used to be $50 a month.

MITCH: Yeah. Thirty to $50.

GLENN: How -- what happened to where you could drop it down that low?

MITCH: Well, what we found -- you know, when we were 30 to $50, we were really just appealing to the people -- that 11 percent who go a lot already. And we got them to go more often. But essentially, it was a -- at first a price point that only appealed to a small group of the public.

GLENN: Yeah.

MITCH: And we realized that what we really needed to do was to reinvigorate especially millennials. Over the past five years, millennials have decreased their amount of times going to the theater by 20 percent. And the reason why is now they have all these other alternatives. In fact, they talk themselves to go out of the movies. They go, I don't know if it's good enough. I've already got Netflix or Hulu. I'll just wait and see it then.

And what we really -- these are people that grew up on subscription. And really, what are subscription services, it's insurance against a bad movie. Now we can go and experiment. And if they don't like it, they can walk out and trash it the next day to their friends.

STU: Hmm.

GLENN: When you put this together -- because AMC doesn't like this.

MITCH: Yeah.

GLENN: But I think the movie theater experience is just totally changing. I think the future is making me -- putting me into some sort of a cocoon where I never ever want to leave. And that's what's happening -- at least here in Texas, that's what's happening to movie theaters. Where great food -- they'll deliver anything.

MITCH: Yeah.

GLENN: I'm guessing there's a few that would even deliver lap dances. I'm not sure. But they just never want you to leave. And I'm guessing, that's where they make their money. Not on the actual ticket.

MITCH: Yeah, that's right. Concessions are 80 percent margin. You know, when you buy that popcorn or soda, 80 percent. And when you buy a ticket, it's roughly 50 percent. So the theaters really want you in the theater.

And, by the way, when you join MoviePass, what happens, because you're not pulling out that 10-dollar bill to pay for a ticket, you spend more money on concessions, which is great for the theaters. And that's why AMC should love it.

GLENN: Why don't they?

MITCH: Well, you know, we had a two-year partnership with AMC. You know, we -- we both contributed to a blind data report that showed that we doubled people's frequency of going to the movies. Increased their consumption of concessions. And AMC, I believe, you know, came to the point where they said, "You know, we should just do this ourselves." And so I believe this is a little bit of sour grapes in seeing that kind of we beat them to the punch. And, you know, I know they will probably release their own subscription program soon.

STU: We're talking to Mitch Lowe of MoviePass.com.

Mitch, one of the criticisms I've seen from AMC and others is that you are preparing people to pay $10 a month for movies. And then when you go out of business in two years, everyone is going to think the old movie price is too high.

MITCH: Yeah. Well, you know, I was on the founding executive team at Netflix and the COO of Redbox, and that's exactly what Blockbuster said to Netflix and they said to consumers. Don't look at these little guys over here that are offering an innovative service. Keep paying us the high prices.

GLENN: Yea. Are you publicly traded now, Mitch? Is this publicly traded?

MITCH: We're 51 percent owned. The deal isn't closed yet. But shortly, we'll be majority owned by a public company. It's HMNY. Helios & Matheson. And they are -- the reason why we sold half the company to them, a little more than half, is they are a big data and analytics company. And what we want to build is this great experience around going to the movies. And we're building upon their foundation. Their technology. That will build a whole night at the movies experience.

GLENN: I'll tell you, I think this is why AMC is wrong on this.

I don't -- you know, AMC should do what AMC does well. And that is, give me a good movie experience. But I wouldn't want a subscription with AMC, because then I'm locked into just AMC. I mean, if you were a public --

MITCH: Exactly.

GLENN: This might be the kiss of death: I would invest in your company because I think what the future is, is companies that say, "I just do this one piece. And I do it really, really well."

MITCH: Yeah.

GLENN: And they just start linking pieces together, to make everybody's experience super easy.

MITCH: Yeah. You have to listen to consumers. And what typically happens to the dominant player is they lose touch with their consumers. And they spend more time trying to protect an old way of doing things, at the cost of offering, you know, new benefits to consumers. And that's -- that's exactly what, you know, startups can do, is where -- I absolutely love movies. I love them in every way. And, you know, I started with video stores 30 years ago. And I just love movies. And I know the artists -- the creative community makes movies for the that's right, for the big screen, the big sound. You know, laughing with other people around you. They don't make them for the mobile phone. And even though that's fun and a great opportunity, you know, it's really the theater --

GLENN: No, there's nothing better -- yeah, there's nothing better than the theater.

MITCH: Yeah.

STU: And, Mitch, it is a -- any theater you want to go to -- I think a lot of people would think, oh, well, I have to find one of these theaters. It's literally any theater -- you basically have what is a debit card almost.

MITCH: Yeah. It's -- it's over 90 percent of all the theaters.

So there are some theaters -- you know, some drive-ins and some places that only take cash that you can't use it.

GLENN: Can you still use it at AMC? Can you still use it at AMC?

MITCH: Absolutely. You can still use it at AMC.

STU: And I don't know, Mitch, if you do radio-based customer service, but I have not received my card yet. I've just been using the app. So we really need to work that out.

MITCH: Well, we absolutely underestimated demand. And we were not prepared for the amount of new subscribers we had. We're still catching up. You know, on those first couple days, we were the third most searched word on Google after Charlottesville and Korea. And we continued to get thousands and thousands of new subscribers every day. And we're catching up fast. But you'll get yours soon. And I apologize. Your first month does not start until you get your card. So even though we charged you in advance, the month doesn't begin until you get your card.

STU: That's awesome.

MITCH: And I'm extremely sorry and I apologize.

STU: We're rooting for you. This is really cool.

GLENN: We are. Mitch, thanks a lot. Mitch Lowe. He's the CEO of MoviePass.com. That's MoviePass.com. I will be a member by the end of the day.

POLL: What topics do YOU want Trump and Harris to debate?

Montinique Monroe / Stringer, Win McNamee / Staff | Getty Images

Does Kamala Harris stand a chance against Donald Trump in a debate?

Next week, during the second presidential debate, we will find out. The debate is scheduled for September 10th and will be hosted by ABC anchors David Muir and Linsey Davis. This will be the second presidential debate, but the first for VP Kamala Harris, and will feature the same rules as the first debate. The rules are: no notes, no chairs, no live audience, and the debater's microphone will only be turned on when it is his or her turn to speak.

This will be the first time Trump and Harris clash face-to-face, and the outcome could have a massive effect on the outcome of the election. Trump has been preparing by ramping up his campaign schedule. He plans to hold multiple rallies and speak at several events across the next several days. He wants to be prepared to face any question that might come his way, and meeting and interacting with both voters and the press seems to be Trump's preferred preparation approach.

With the multitude of issues plaguing our nation, there are a lot of potential topics that could be brought up. From the economy to the ongoing "lawfare" being waged against the former president, what topics do YOU want Harris and Trump to debate?

The economy (and why the Biden-Harris administration hasn't fixed it yet)

The Southern Border crisis (and Kamala's performance as border czar)

Climate change (and how Trump pulled out of the Paris Agreement)

The "lawfare" being waged against Trump (and what Trump would do if he were thrown in prison) 

Voting and election security (and how to deal with the possibility that illegal immigrants are voting)

3 ways the Constitution foils progressive authoritarianism

ANDREW CABALLERO-REYNOLDS / Contributor, Kevin Dietsch / Staff, Pool / Pool | Getty Images

This is why it is important to understand our history.

Over the weekend, the New York Times published a controversial article claiming the Constitution is a danger to the country and a threat to democracy. To those who have taken a high school American government class or have followed Glenn for a while, this claim might seem incongruent with reality. That's because Jennifer Szalai, the author the piece, isn't thinking of the Constitution as it was intended to be—a restraint on government to protect individual rights—but instead as a roadblock that is hindering the installation of a progressive oligarchy.

Glenn recently covered this unbelievable article during his show and revealed the telling critiques Szalai made of our founding document. She called it an "anti-democratic" document and argued it is flawed because Donald Trump used it to become president (sort of like how every other president achieved their office). From here, Szalai went off the deep end and made some suggestions to "fix" the Constitution, including breaking California and other blue states away from the union to create a coastal progressive utopia.

Here are three of the "flaws" Szalai pointed out in the Constitution that interfere with the Left's authoritarian dreams:

1. The Electoral College

Bloomberg / Contributor | Getty Images

The New York Times article brought up the fact that in 2016 President Trump lost the popular vote but won the Electoral College, and thus won the election. This, as Szalai pointed out, is not democratic. Strictly speaking, she is right. But as Glenn has pointed out time and time again, America is not a democracy! The Founding Fathers did not want the president to be decided by a simple majority of 51 percent of the population. The Electoral College is designed to provide minority groups with a voice, giving them a say in the presidential election. Without the Electoral College, a simple majority would dominate elections and America would fall under the tyranny of the masses.

2. The Supreme Court

OLIVIER DOULIERY / Contributor | Getty Images

President Biden and other progressives have thrown around the idea of reforming the Supreme Court simply because it has made a few rulings they disagree with. Glenn points out that when a country decides to start monkeying around with their high courts, it is usually a sign they are becoming a banana republic. Szalai complained that Trump was allowed to appoint three justices. Two of them were confirmed by senators representing just 44 percent of the population, and they overturned Roe v. Wade. All of this is Constitutional by Szalai's admission, and because she disagreed with it, she argued the whole document should be scrapped.

3. Republicanism

Chip Somodevilla / Staff | Getty Images

To clarify, were not talking about the Republican Party Republicanism, but instead the form of government made up of a collection of elected representatives who govern on the behalf of their constituents. This seems to be a repeat sticking point for liberals, who insist conservatives and Donald Trump are out to destroy "democracy" (a system of government that never existed in America). This mix-up explains Szalai's nonsensical interpretation of how the Constitution functions. She criticized the Constitution as "anti-democratic" and a threat to American democracy. If the Constitution is the nation's framework, and if it is "anti-democratic" then how is it a threat to American democracy? This paradox is easily avoided with the understanding that America isn't a democracy, and it never has been.

Kamala Harris' first interview as nominee: Three SHOCKING policy flips

Anadolu / Contributor | Getty Images

On Thursday, Kamala Harris gave her first interview since Joe Biden stepped down from the race, and it quickly becameclear why she waited so long.

Harris struggled to keep her story straight as CNN's Dana Bash questioned her about recent comments she had made that contradicted her previous policy statements. She kept on repeating that her "values haven't changed," but it is difficult to see how that can be true alongside her radical shift in policy. Either her values have changed or she is lying about her change in policy to win votes. You decide which seems more likely.

During the interview, Harris doubled down on her policy flip on fracking, the border, and even her use of the race card. Here are her top three flip-flops from the interview:

Fracking

Citizens of the Planet / Contributor | Getty Images

In 2019, during the 2020 presidential election, Harris pledged her full support behind a federal ban on fracking during a town hall event. But, during the DNC and again in this recent interview, Harris insisted that she is now opposed to the idea. The idea of banning fracking has been floated for a while now due to environmental concerns surrounding the controversial oil drilling method. Bans on fracking are opposed by many conservatives as it would greatly limit the production of oil in America, thus driving up gas prices across the nation. It seems Harris took this stance to win over moderates and to keep gas prices down, but who knows how she will behave once in office?

Border

PATRICK T. FALLON / Contributor | Getty Images

In her 2020 presidential bid, Harris was all for decriminalizing the border, but now she is singing a different tune. Harris claimed she is determined to secure the border—as if like she had always been a stalwart defender of the southern states. Despite this policy reversal, Harris claimed her values have not changed, which is hard to reconcile. The interviewer even offered Kamala a graceful out by suggesting she had learned more about the situation during her VP tenure, but Kamala insisted she had not changed.

Race

Tasos Katopodis / Stringer | Getty Images

When asked to respond to Trump's comments regarding the sudden emergence of Kamala's black ancestry Kamala simply answered "Same old tired playbook, next question" instead of jumping on the opportunity to play the race card as one might expect. While skipping the critical race theory lecture was refreshing, it came as a shock coming from the candidate representing the "everything is racist" party. Was this just a way to deflect the question back on Trump, or have the Democrats decided the race card isn't working anymore?

The REAL questions that CNN should ask Kamala tonight

KAMIL KRZACZYNSKI / Contributor | Getty Images

The Democrats don't want the American people to know who they are voting for. It has been well over a month since Biden dropped out of the presidential race and Kamala was hastily installed in his place. During that time, Kamala has not given a single interview.

The Democrats' intention is clear: they have spent the last month gaslighting the American left into believing that Kamala is their new "super-candidate." Now that they've taken the bait, they can allow Kamala to take a softball interview to combat accusations from the Right.

Kamala's first interview will be hosted by Dana Bash on CNN and is scheduled for 9:00 p.m. ET tonight. Kamala will be joined by her running mate, Tim Walz, for an unusual interview. Between the tag-team approach and the more-than-sympathetic interviewer, it's almost certain that this will not be a particularly substantial interview full of easy, soft-ball, questions.

The American people deserve to know who is on the ballot, and that means that they should be able to see how their candidates stand up against tough questions. Here are five questions that CNN should ask Kamala tonight:

Will she build a border wall?

SOPA Images / Contributor | Getty Images

After years of bashing Trump for his proposed border wall, Kamala has suddenly changed her mind. During the DNC, Kamala pledged to support a bill that included money for a border wall and other border security measures. This change seems like a knee-jerk response to recent criticisms made about her abysmal performance as the "border czar." The question is: how genuine is it?

What is her stance on the Israel-Hamas war?

BASHAR TALEB / Contributor | Getty Images

Kamala has been mushy on the issue of the Israel-Hamas war so far. She said that she would support Israel while simultaneously expressing sympathy for the Palestinians in Gaza. With mounting pro-Hamas support within the American left, just how far is Kamala willing to go?

How does she explain defending Biden against allegations that he was too old for office now that those allegations have proven true?

NurPhoto / Contributor | Getty Images

For the last four years, Kamala and the entire mainstream media have vehemently defended President Biden's mental fitness, despite countless incidents that indicated otherwise. After Biden's senile performance at the June presidential debate, the truth couldn't be hidden any longer, and Kamala was quickly swapped into his place. Now that the cat's out of the bag, how does Kamala justify her lies to protect the incompetent president?

How does she plan on fixing the economy, and why hasn't she already done it?

NurPhoto / Contributor | Getty Images

Kamala has claimed that she could lower consumer prices starting on the first day of her administration, accompanied by other promises to fix the economy. So why the wait? If she knows how to fix the economy that is causing so many Americans to suffer, can't she do something right now as the Vice President? Why has the economy only gotten worse within her three-year tenure in the White House?

Why does she keep flipping on her policies? Where does it stop?

Andrew Harnik / Staff | Getty Images

As mentioned above, Kamala has already changed her stance on a border wall, but it doesn't end there. During her 2019 presidential campaign, Kamala vowed to end fracking, a controversial method of drilling for oil, in the name of climate change. But now it seems her position has softened, with no mention of a fracking ban. Why does she keep changing her stance on these major policies? What other policies has she changed without any indication? Why has she so far failed to produce a clear campaign platform?