MoviePass is dead. But this movie service has taken a big step

It’s been less than three years since MoviePass shut down after flipping the movie industry upside down with its cut-price ticketing service, a disruptive saga that now seems quaint compared to the havoc wreaked on multiplexes by the COVID-19 pandemic.

It turns out that offering customers unlimited movie tickets for less than $10 a month wasn’t viable.

Still, the subscription services that movie companies launched amid the rapid rise of MoviePass and the ensuing death spiral have proven popular as Hollywood films return to the big screen.

Cinemark, one of the three largest movie theater chains in the country, said Wednesday that its $10-a-month Movie Club subscription deal now has 1 million active members, marking a milestone for the Plano-based company. , in Texas. It has over 3,000 members per theater in its US circuit.

Cinemark was just one of many chains that launched subscription programs and boosted their loyalty clubs to combat the long-term decline of cinema in the United States. Movie Club subscribers receive one 2-D ticket credit per month with the option to pay extra for premium formats such as XD and Imax. Unused ticket credits carry over. Members also get discounts on concessions and avoid online ticketing fees.

AMC’s A-list stubs, which debuted in 2018, charges $19.95 a month or more, depending on location, to allow customers to see up to three movies a week. Regal Unlimited’s plan, which lets people attend as many screenings as they want, starts at $18 per month. AMC Chief Executive Adam Aron said in February 2020 that the company has between 900,000 and 1 million A-List subscribers.

The hope is that subscriptions can help boost admissions as cinemas recover from the pandemic slump.

A big test for the industry is underway as the summer movie season kicks off. Paramount Pictures and Skydance Media’s ‘Top Gun: Maverick’ opened with $156 million in the US and Canada over Memorial Day weekend, bolstering optimism that the box office will return despite streaming growth . Exhibitors are hoping big-budget movies like “Jurassic World: Dominion,” “Minions: The Rise of Gru,” and “Lightyear” will pick up steam.

The timing is right for Cinemark President and CEO Sean Gamble, who earlier this year took over from Mark Zoradi, a former Walt Disney Co. executive who led the channel for six years.

The financial situation is improving for cinemas, but the activity has not yet returned to profitability. Cinemark posted a loss of $74 million in the first quarter, though that was an improvement from its loss of $208.3 million in the same quarter a year ago. Cinemark operates 520 theaters in 42 states as well as 15 countries in South and Central America.

The Times spoke to Gamble, 47, about the future of subscriptions, the tepid improvement in box office health and the possibility of more movies hitting theaters from streaming services, including Netflix. This conversation has been edited for length and clarity.

Movie Club was first announced in December 2017, long before the pandemic hit, when everyone was trying to figure out what their subscription-slash-loyalty service programs would look like. What was driving registrations?

The big driver is the compelling overall value the program provides. Obviously, we hit a short speed bump with COVID, where we paused the program when the pandemic took hold, and then fully reactivated it last July. Since then, we have continued to see weekly growth in new subscribers. It has the advantage of not being a use-or-lose program. The credits you get each month roll over, so even if you don’t go for a month or two or three, it’s still a great program for you.

How has the program affected attendance?

We have seen how Movie Club as a percentage of box office and attendance has increased year on year. In 2019, Movie Club accounted for around 14% of our box office. In the first quarter of this year, this figure rose to 20%. Typically, our Movie Club members visit theaters on average three times more than the average moviegoer. We tend to find that once they enter the program, their frequency increases.

Tent pole studio movies like “Top Gun: Maverick” have breathed some life into the box office for older moviegoers who aren’t as interested in comic book movies. Will these customers come back in greater numbers?

Well, we have definitely seen an improvement. We continue to see that overall comfort in returning to the cinema continues to hover at an all-time high, and it has improved across all categories of moviegoers. We still see that audiences aged 55 and over are still behind the average, as well as the 15% or so of moviegoers who are still a little worried. But what’s really encouraging is that it’s not just the big superhero action movies, like “Spider-Mans,” “Batmans,” and “Doctor Stranges,” that have done very well. perform.

We’ve seen truly successful examples time and time again, with movies like “The Lost City,” a romantic comedy that grossed $100 million at the domestic box office. We didn’t even have that many of these movies doing that before the pandemic. Then you have an older movie like “Dog” that makes $60 million.

We’ve seen how “Spider-Man: No Way Home” had a big effect. For us, a little over 20% of the public who came to see “Spider-Man” had not yet returned to the cinema. We think “Top Gun” will be a similar type of movie for older audiences.

There is still some hesitation to return due to the virus, but many people have just gotten out of the habit of going there. How do you solve this problem?

One of the big things that will help with that is more regular movie releases. We’re still in gripping movie release mode, and then there’s a lull. There were a lot of starts and stops. As we move into summer, for the first time, we’re going to have a more steady cadence of movies coming out every week. There has to be this constant flow.

In terms of what we can do specifically in the exhibition, clearly it all starts with delivering an exceptional consumer experience. So when they come to our theaters, they want to come back for more. We’ve been very proactive in improving our marketing capabilities to reach customers as they think about what they want to do for the weekend. And then of course we have our various loyalty programs like Movie Club. When we welcome people to these clubs, it reinforces that communication to keep people coming back.

Do you plan to acquire new locations as theaters close and change hands? In the Los Angeles market, there was a real musical chair of theaters closing and changing hands.

We were very lucky going into the pandemic to have a strong balance sheet, and that clearly benefited us. As we come out on the other side, we are in a very strong position relative to our peers. Specific to mergers and acquisitions [mergers and acquisitions], this is something we are actively looking into. We tend to be quite picky and disciplined buyers. It’s a bit tricky at times, simply because value expectations, especially on the ask side, can be a bit different from the risk profile right now. On the contrary, there may have been fewer opportunities in the market than we originally expected.

There’s a reason some of these places got dark in the first place.

Some would be attractive for the right kind of deal. How much money does it take to get it in the right shape after all you paid for it? All this enters into the calculation of the investment costs. And then what do we think it can actually generate in the future in terms of cash flow?

Do you invest in improving the cinemas you already own? If customers come back and have a bad experience, they will stay home.

I couldn’t agree more. We were once again blessed to be very active in recliners before the pandemic. We now have over 65% of our home circuit reclining, and we continue to look for new recliner opportunities. We’ve actually seen that our reclining cinemas are the ones that have recovered the fastest coming out of the pandemic. High-end equipment has been overpriced significantly since cinemas resumed. High-end large-format XD screens now represent around 14% of our box office compared to only around 4% of our screens.

Will the US box office return to pre-pandemic levels? If yes, when?

I wish I had a crystal ball. I certainly think he has the potential to come back to this level. I think it’s maybe a bit more of a rolling target over the next two years, maybe even three. It feels like we’re getting closer and closer, but we never want to be too cocky when it comes to predicting COVID. Another important element is simply the volume of content affected by COVID.

Streaming has also had an impact, with some films being taken down to serve as a marketing tactic to drive new consumer acquisition. I tend to think it will normalize over time. Several studios tell us that the films they release theatrically perform better on their streaming platforms.

Many people have speculated that streaming services will begin to embrace theatrical releases more fully, especially with Netflix’s recent struggles. How real are these conversations?

These are very real conversations, and I think there is genuine interest. Releasing films in theaters is very important within the creative community. So, as companies embark on bigger and more compelling commercial films, having a theatrical release is also a way to attract top talent.

Maybe for a while it didn’t matter, because some growth just happened naturally. But as there is much more competition in the streaming space, there is more need to differentiate and promote greater awareness and have more of this quality product.

This has always been the value that cinema has brought to films. This is a very real opportunity on both fronts. In some ways, there’s been a painted false narrative in the media about streaming versus cinema, as if it’s one or the other. The reality is that it’s about maximizing the value of movies.

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