The biggest question around MoviePass and its $10-per-month unlimited subscription has never been whether it’s a good deal. It’s whether—or how long—it can possibly last. But there’s another monthly moviegoing plan that has largely dodged those existential doubts. In fact, in some parts of the world, it even makes money. Imagine that.
That company is Sinemia, an awkwardly named subscription plan that launched in Istanbul in 2014, spread to the UK not long after, and touched down in the US just a few months ago. In broad strokes, it’s the same idea as MoviePass: Pay a monthly rate, get movie tickets. But the differences between the two matter, both for your own wallet and the future of moviegoing.
On the Cheap
MoviePass, as you likely know by now, lets you purchase one movie ticket, every day, for $10 per month. (It also now offers a plan with an iHeartRadio trial bundled in, but the action’s at the all-you-can-watch buffet.) For that same $10, Sinemia offers you … two movie tickets.
It admittedly doesn’t seem like a fair fight. But again, look a little closer. MoviePass limits you to 2-D showings, and doesn’t include fancy features like seat selection. Your Sinemia subscription covers 3-D, 4-D, IMAX, whatever you want. To buy a ticket through MoviePass, you have to be at the actual theater. With Sinemia, you can purchase up to 30 days in advance, and choose your seats then too.
Sinemia also offers more options, including a $5 per month model that covers one 2-D ticket every month, or two 2-D tickets per month for $7. If you know you’re not going to binge, you can wind up paying way less than you would for MoviePass. Consider that, according to the Motion Picture Association of America’s own numbers, only 12 percent of people in the US and Canada go to a movie at least once a month, and a pretty clear argument starts to form that a cheaper Sinemia plan makes more sense for a whole lot of people.
It also may make more sense for the industry. While major theater chains like AMC have decried MoviePass as ill-fated and reckless, Sinemia CEO Rifat Oguz says that his company became sustainable this year, thanks to deliberate pricing, and forging the kind of partnerships in Europe that have so eluded MoviePass stateside.
“In Europe we have almost all the movie theaters partner with us, and almost all the studios,” says Oguz. Overseas, Sinemia has partnerships that include shared concession revenue, deals with local restaurants, and so on. “They partner with us because we actually help them gain more.”
MoviePass helps theater chains gain as well; it pays full price on every ticket its subscribers purchase, and currently accounts for between five and six percent of the US box office. But the partnerships have been slow-forming because those gains come at a significant perceived cost: driving the incremental value of a ticket down to practically zero.
And if after all that, MoviePass goes away? You’ll have a hard time getting anyone to cough up $10 for a single ticket, much less a month’s worth.
Limited Appeal
MoviePass CEO Mitch Lowe insists his company will make it through this year and beyond. And if his vision comes to fruition, it could well rescue the movie industrial complex from its steady decline.
But that if seemingly grows bigger by the week. In April, an independent auditor of MoviePass parent company Helios and Matheson said there was “substantial doubt” MoviePass could operate as “a going concern.” On Tuesday, Helios and Matheson disclosed that its cash on hand had dwindled $15.5 million.
Sinemia’s financial situation is more opaque, but Oguz says last year it saw a positive gross margin, and this year it has seen positive earnings before interest, taxes, depreciation, and amortization, an important indicator of a company’s financial health. He’s hoping to replicate the model that has worked so well in Europe around the world.
The one exception? The unlimited plan. Sinemia has one, in Europe, but it’s priced at the cost of 3.5 movies per month. “I’m an engineer. I live by the numbers,” says Oguz, whose previous career was managing payment card processors for banking and telecommunications companies. And the numbers tell him that a sustainable unlimited plan in the US would realistically cost more than three times what MoviePass charges.
MoviePass has shown the strain of trying to keep up with its incredible bargain. A few months ago it blocked access to certain AMC theaters in major metro areas, where ticket prices are much higher than average. (Lowe has since promised he’s done experimenting with AMC availability.) And more recently, the company has made certain users suspected of fraudulent activity submit photos of every ticket stub to prove they’re using their cards as intended.
Fraud does run rampant in the industry. But Oguz argues that the onus should fall on the service, not the user, to curtail it. That’s also how you survive. Oguz says that the company spent six months undertaking two anti-fraud projects, but the effort paid off; Sinemia’s gross margin improved 50 percent just from stamping out bad-faith uses. “Our product is solid,” says the Sinemia CEO. “We don’t give them the option to make a fraud. You can’t go and buy different tickets than you want. That’s how we deal with the fraud.”
After years of observing fraudulent behavior over millions of transactions, in other words, Sinemia has worked to make its card as fraud-proof as possible, rather than punishing its users for potentially unintentional misuse.
The Long Term
Don’t take this as an argument that you should drop your MoviePass subscription for Sinemia. The MoviePass unlimited plan is still an unparalleled deal; in many cities you save money with it even if you go to only one movie a month. And Sinemia has its own annoyances, including a clunky user experience.
But if the movie theater industry really is to undergo a transformation into the subscription age, it’s important to look at all the ways that might happen, especially over the long haul.
“It seems to me Sinemia is probably a more viable business model,” says RBC Capital Markets analyst Leo Kulp, especially now that it has a plan starting at $5 per month. “A big portion to any subscription model is the breakage idea. Kind of like going to the gym; you sign up for it, you go a lot the first month, and you never go again. The lower the price point, the more likely it is that people will sign up and not cancel.”
Meanwhile, MoviePass recently sued Sinemia for what it sees as a copycat business model. “We’re 100 percent confident they’re violating our patents,” says Lowe. “That’s why we’re doing it, to protect our intellectual property.” Oguz says there’s “no validity” to the allegations.
More imitators could be coming soon, though. By this point, subscription plans are here to stay, even if they come from the theater chains themselves. “Based on where it stands now, the large exhibitors recognize the value of the subscription plan but think the price point is unsustainable,” says Kulp. “I think the general view is that they can wait longer than MoviePass can, and at some point step in to offer a subscription plan and pick up maybe not all of the subscribers, but some portion of them.”
Despite the MoviePass price gap, the lawsuit, and the standoffish theater companies, Sinemia has managed to grow its business in the US by 50 percent every month. Its recent offerings give subscription options for a la carte fans rather than the binge crowd. And it dares to suggest that to make money, you don’t necessarily have to lose quite so much of it first.
At the MoviePass
- How does MoviePass make money? It doesn’t yet—but here’s how it could
- After a brief disappearance, the MoviePass unlimited plan recently returned
- MoviePass growth surpassed its wildest expectations, which led to customer service headaches
Source:WIRED
