MoviePass is perfectly fine with ruffling a few feathers in an attempt to prove its business model. However, most of the ire to date has been from actual movie theater chains taking issue with its low-cost subscription model that is offered to moviegoers. That changed recently when MoviePass CEO Mitch Lowe bragged about the service's data collection and location tracking, and suddenly its customers were a bit miffed, too. In response to the backlash, MoviePass put out a statement promising not to sell the data it collects.
Let's back up a moment. For those you who are not familiar with MoviePass, it's a subscription service that normally runs $9.95 per month in exchange for "unlimited access to movies in theaters." The deal is even sweeter right now for first time subscribers who are willing to pay a year in advance—it costs $105.35 for a full year, which breaks down to $7.95 per month plus a $9.95 processing fee.
When you sign up, MoviePass sends you a card that works like a credit card at the movie theater. When you want to go to a movie, you head to the theater, choose the movie and showtime you are interested in through the accompanying MoviePass app, and the ticket cost the theater charges gets preloaded to your card.
The low price model has proven popular and attracted more than 2 million subscribers accounting for 6 percent of ticket sales, Lowe said during a recent presentation at the Entertainment Finance Forum presented by Winston Baker in Hollywood, according to Media Play News. Nevertheless, theater chains like AMC aren't happy with the service and what they view as an unsustainable business model. However, it was the data collection comments Lowe made that got the company in hot water with consumers.
"We know all about you," Lowe said during the keynote title "Data is the New Oil: How Will MoviePass Monetize It?" He went on to say that Moviepass collects "an enormous amount of information. We watch how you drive from home to the movies. We watch where you go afterwards."
Users and privacy advocates alike were creeped out by the comments. There was a backlash on social media, which prompted MoviePass to clarify things.
"We are exploring utilizing location-based marketing as a way to help enhance the overall experience by creating more opportunities for our subscribers to enjoy all the various elements of a good movie night. We will not be selling the data that we gather. Rather, we will use it to better inform how to market potential customer benefits including discounts on transportation, coupons for nearby restaurants, and other similar opportunities," MoviePass told TechCrunch.
The claim is that MoviePass is trying to flesh out the movie going experience by learning where its users go before and after a movie to catch a bite to eat and so on.. That is where the data collection comes into play. It's not clear how long MoviePass holds onto that data and what exactly it collects. But if we are take MoviePass at its word, it will eventually lead to more discounts at nearby places. That is the pitch, anyway.