MoviePass charges its customers only $10 per month for nearly unlimited movie theater tickets — and it says that business model is working.
More than 1.5 million people have bought in, and they see twice as many movies in the theater as non-subscribers, according to MoviePass CEO Mitch Lowe. But as a middleman between the theaters and their customers, the company wants to get a cut of the sales it’s generating.
So, how’s that working out?
“AMC, the day we launched, said we were a ‘fringe player’ and that we would never succeed,” Lowe said on the latest episode of Recode Media with Peter Kafka. Lowe is trying to prove them wrong, via a high-stakes gamble.
To demonstrate the buying power of its customers, MoviePass recently removed 10 highly-used AMC theaters from its app. That means when one of those customers wants to go see “Paddington 2,” they can only use their MoviePass subscription at a competing theater.
“We started assessing where we spend our money,” Lowe said. “We bought a million tickets in the last 30 days at AMC theaters, across the country. That’s like $10-11 million that we paid them for tickets. Our subscribers say that they spent $12 [on concessions] every time they went to an AMC, which is more than double their average of $4.88.”
When we reached out to AMC for comment on this story, they pointed us back to the comment they provided when our sister site The Verge wrote about MoviePass’ claims in January:
AMC has taken no action to block the acceptance of MoviePass at our theaters. We have no further comment about MoviePass’s unilateral actions. We are, however, disappointed that MoviePass continues to make false statements about AMC, including today when MoviePass greatly exaggerated its contributions to AMC’s profitability.
On the new podcast, Lowe said all 10 of the theaters were specifically chosen because there are other theaters run by competitors — such as fellow big chains Regal or Cinemark, or independent theaters — that are willing to play ball with MoviePass in the vicinity.
“We’re assessing other possible locations — there are quite a few — that fit that same criteria, where there are plenty of competitors,” Lowe added.
He said he’s hoping the stunt will encourage AMC to talk with MoviePass about a profit-sharing partnership. But he’s also running a couple risks: One, that people who subscribed to MoviePass thinking they could go to those theaters will be unhappy; and two, that people who might subscribe to MoviePass will hear about the dispute and worry that the company can’t deliver on its promises.
“We have no plans to increase the quantity of AMC locations, or to decrease the quantity of locations,” he said. “All I’m saying is, there’s an awful lot. I would love to sit down at a table and show the AMC folks how we can be great partners and drive more business into their locations.”
“Our customers want to go to AMCs, we want to work with AMC,” Lowe added. “But at same time, we can’t keep giving millions and millions of dollars a week to an entity that says, over and over again, ‘We’re happy to take your money but we’re never going to share in that increased profit with you.’”
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This article originally appeared on Recode.net.