The company that gained mass attention overnight after they offered unlimited movie theater access for only $10 a month is now seeing backlash from one of the biggest theater chains around, AMC. MoviePass’s announcement on Tuesday dragged down AMC’s already dropping stock by 2.57% to $13.25 by the end of that day.
MoviePass CEO Mitch Lowe expressed concern in an interview with Variety, that AMC’s stance could hurt business:
“I’m not worried about it killing the sale. What I’m worried about is it confusing customers and making them believe they can’t use this service at AMC theaters.”
MoviePass works by buying tickets full price and re-selling them back to customers at a discounted rate. It claims that it boosts theater attendance by 111% and that customers are more inclined to buy concessions, which is where the biggest percentage of profit comes from for theaters. However, AMC prefers to use their own rewards programs to provide deals to moviegoers.
Lowe has acknowledged that this new service will lose money, but believes that it will prove MoviePass’s value to theaters and studios and could lead to profitable new deals.
Overall, Lowe doesn’t seem too worried. As a co-founder of Netflix and former head of Redbox, he’s seen this knee-jerk reaction towards new services and technology from distribution moguls before:
“This is so much like Blockbuster was when we rolled out Netflix or Redbox. It’s the big guy being afraid of the little guy offering better value to consumers.”