The Agenda

Should Netflix Colonize Movie Theaters?

As an avid moviegoer, I was pleased to read about MoviePass, a new service for people like me. The wonderfully-named Angela Watercutter has the details at Epicenter:

 

MoviePass will launch with an “unlimited pass” service allowing subscribers to go to as many films as they can stand for $50 a month. If they want to see a 3-D or Imax film, they will pay a $3 surcharge. A “limited pass” offering four movies a month for $30 is in the works.

“MoviePass makes spur-of-the-moment movie-going as simple as choosing a film on the phone and checking in at the theater,” Spikes said in a press release. “No more waiting in line.”

The private beta will launch with 21 theaters in the San Francisco Bay Area this weekend (see list below), then roll out to other U.S. cities throughout the summer. MoviePass plans to offer access to about 40 percent of the nation’s screens when the service launches nationally in the fall.

As Josh Levin pointed out to me, Chris Dorr anticipated something like MoviePass in April, at which point I assume the MoviePass team was already hard at work. But Dorr’s proposal would represent a more compelling value proposition for the consumer, and much bigger bet for theaters. 

First, Dorr laid out the broad details:

You go to a website or download an application to your device that gets you a list of every movie theater in the United States. From this list you get to pick two movie theaters.

For example, I would pick the AMC Loews Lincoln Square 13 and the Lincoln Plaza Cinemas, both on Broadway in Manhattan. One shows mainstream Hollywood fare and the other shows foreign and independent movies. Both are my local theaters. 

The key point is this: each customer gets to create her own access point at any theater across the entire United States. Think of it as choosing your own screen much like Netflix allows you to do.

Then I put in my credit card and agree to pay $10 per month ($120 per year) and receive a movie pass to these two theaters. This movie pass allows me to go to any movie at any time at each of these theaters.  

Then he explains why this might have better than a snowball’s chance in hell:

If a million people subscribe per year, $120 million annually flows back through theaters into the movie industry, at 10 million subs, $1.2 billion and at 20 million subs, $2.4 billion. In other words, if done well, it can scale and a lot of money will be generated. And as you remember, Netflix hit 20 million subscriptions just last year. 

But is there a company out there that has the expertise to pull this off?  A company that has dealt with all the movie distributors, has expertise in database management, credit card collection, knows something about recommendation engines, deals with vast numbers of movie lovers on a daily basis and knows exactly where they all live.

Let’s think for a moment. Netflix maybe?

A very interesting thought experiment indeed. 

Reihan Salam is president of the Manhattan Institute and a contributing editor of National Review.

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