MoviePass is selling as many as one in 10 tickets for many movies across US cinemas according to figures quoted by the firm’s chief executive, Mike Lowe.
In an update on the business’ progress, Lowe told the BrinkWire website that the firm’s goal is to “break even with the subscription and the cost of goods.”
Earlier this month, MoviePass signed multiple contracts with several Hollywood studios and independent distributors to expand the firm’s revenue sources beyond its base of more than two million subscribers.
The partnerships will explore revenue-generating opportunities through marketing channels and exclusive fan-based events so that studios and distributors can more accurately target spending for advertising, reach the right audiences more effectively and identify the most effective markets.
Lowe told Recode: “We have all these different ways that we make your life better as a customer. We know how to market films to you. You know, the studios are incredibly inefficient the way they market small films.
“Over the last three weeks, we bought one in every 19 movie tickets in the country, but when we promote a film, we’re buying one in 10, so we’re lifting. These are for subjective $50m box office films. The studios are paying us to be a more efficient marketer of films.”
In order to break even on subscriptions, Lowe explained that it is all a balance of averages. He told Recode that there are customers with time on their hands who do see a lot of movies each month, but that’s not the most common way that people are using MoviePass.
He said: “89 per cent of American moviegoers only go to four or five movies a year. When they join MoviePass, they double their consumption and go to about 10 a year. That’s a little bit less than one a month. They balance out the 11 per cent of the population that go 18 times before joining MoviePass and then after go three times a month.
“It works out. Over time, it actually works out to be about one movie per month per subscriber. Now, some people do go to 10, 15.”
MoviePass added 500,000 new subscribers in 20 days over the New Year. The low-cost cinema subscription service now has two million users, having reached the one-million milestone on December 20.
MoviePass has enjoyed a 7,400-per-cent rise in its userbase in the five months since Helios and Matheson Analytics became its majority shareholder and began offering a $9.95-per-month (£7.40/€8.30) unlimited cinema package.