For $9.95, MoviePass offers a movie ticket a day — putting theater owners on the spot and sparking alternatives

(Rick Egan | Tribune file photo) The grand opening of the new Regal Crossroads 14 in Taylorsville in March 2017.

Justin Roylance likes to go to two or three movies a week — and thanks to a new subscription service, he’s not busting his budget.

Roylance, a satellite technician in Ogden, is one of the approximately 600,000 subscribers to MoviePass, a service that promises nearly unlimited movie tickets for $9.95 a month — roughly the price of a single ticket.

“It’s very easy to use, once you learn how to use the app, which isn’t very complicated,” he said.

(Courtesy photo)

Using the phone app and the card, users can buy one regular-priced movie ticket every day — but they must be within 100 yards of the theater to do so. Last Friday, on the opening day of “Star Wars: The Last Jedi,” Roylance was at his local theater just after midnight to buy a ticket for a 10 p.m. screening, some 22 hours later.

Christy Bills, an entomologist at the Natural History Museum of Utah, goes to movies at least three times a month using MoviePass. “When it works, it’s fantastic, but it doesn’t always work,” Bills said. “It can be glitchy.”

Kairy Salazar has had trouble using the service as a regular at a theater near her home in Layton.

She had enough troubles with MoviePass’ customer service, and its sometimes narrow terms of service, that she called the Better Business Bureau.

“[MoviePass] tells you to use the app, but you use the app and literally nobody ever responds,” Salazar said.

The advent of MoviePass has consumers excited and theater owners holding their breath.

Mitch Lowe, MoviePass’ CEO, says the service is aimed at younger moviegoers — the much-coveted millennials — who have not been going to the movies as much as their predecessors, but are more likely to sign up for subscription services like Netflix (where Lowe was vice president at its launch).

“Our research found, ‘If you give us a subscription service, we’ll go more often,’ “ Lowe said in a recent interview.

(Courtesy photo) Mitch Lowe

MoviePass has been around since 2011, offering a more expensive service that appealed to hardcore moviegoers. The company dropped the monthly price to $9.95 last August, to target casual moviegoers — in hopes that people who go to four or five movies a year will go to 10 or 11, Lowe said.

On Wednesday, MoviePass’ parent company, the data firm Helios and Matheson Analytics Inc., announced that subscriptions have passed the 1 million mark. Lowe said the company is on track to attract 3 million customers by next August. “The growth is still phenomenal, and we haven’t begun to advertise,” he said.

When MoviePass dropped its price in August, the reaction from theater companies was swift. AMC Theatres, the nation’s largest theater chain (with Utah locations in West Jordan, Layton and Provo), slammed MoviePass as “a small fringe player” whose business model was “not in the best interest of moviegoers, movie theaters and movie studios.” AMC said at the time it was pursuing legal action.

“In AMC’s view, that price level is unsustainable and only sets up consumers for ultimate disappointment down the road if or when the product can no longer be fulfilled,” AMC’s statement said.

Though there has been talk of theaters refusing to accept MoviePass, that may be easier said than done. The accounts work like a MasterCard debit card, so programming a theater’s automated kiosks or online ticket sales to reject MoviePass could also reject other customers.

Earlier this month, another chain, Cinemark, launched its own subscription service, Movie Club. That service was in development for a year, said James Meredith, Cinemark’s senior vice president for marketing and communications, but the timing of the launch seems more than coincidental to MoviePass’ success.

Cinemark Movie Club, a nation-wide $8.99 movie-a-month membership program, offers exclusive benefits to members, including the ability to reserve seats online without any fees and upgrade the movie viewing experience to a premium format such as XD (pictured) via the online platform or mobile app. (Photo: Business Wire)

“What consumers told us over and over is what they really wanted is a great theatrical value,” Meredith said.

Cinemark, which has 15 Utah locations from Ogden to Spanish Fork, is offering its Movie Club for $8.99 a month. It only offers one movie ticket a month, but it also offers a 20 percent discount on concessions and waives online ticket fees. The service allows users to buy additional tickets for $8.99, which is often cheaper than regular ticket prices, and roll over unused tickets to the next month.

“That whole ‘If I don’t use it, I lose it’ aspect was so important,” Meredith said.

As for competition from MoviePass, Cinemark isn’t as negative as AMC. “The way Cinemark looks at it, anything that encourages moviegoing, we’re in favor of that,” Meredith said.

Tori Baker, executive director of the Salt Lake Film Society, the nonprofit that runs the arthouse Broadway Centre Cinemas and Tower Theatre, said indie theaters like hers are watching MoviePass’ progress carefully.

“If you start to devalue content, what are the repercussions down the line that we can’t see?” she said.

Baker said it’s difficult to see how MoviePass makes money on this deal, particularly with devoted moviegoers who will get multiple viewings for their $9.95. “MoviePass may be underestimating the voracity of moviegoers,” she said.

Selling $9.95 subscriptions isn’t MoviePass’ only revenue stream. Lowe said he is making marketing deals with distributors and aims over time to work out discounts with exhibitors. There’s also the reams of data collected from users of the card, something that attracted Helios and Matheson Analytics to acquire a majority stake in MoviePass earlier this year.

Lowe said heavy-use customers are rare. “People think in an all-you-can-eat program, people will go a lot,” he said. “Even though there are some who will go a lot, the average is much, much lower than you would expect.”

For Roylance, the service has allowed him to see movies outside his usual comfort zone. He’s enjoyed the mother-daughter comedy “Lady Bird” and the dark drama “Three Billboards Outside Ebbing, Missouri.” And he’s seen “Star Wars: The Last Jedi” twice in its first week of release.

“I’ll see movies that I probably would not have seen, which I end up liking,” he said.