A NETFLIX FOR CINEMA

For $10 a month, a Netflix co-founder wants you to go to the cinema as much as you like

Obsession
Glass
Obsession
Glass

Imagine seeing all the movies as you want in cinemas for the same price as your monthly Netflix subscription.

Mitch Lowe, who revolutionized home entertainment as a founding member of Netflix and RedBox, which mostly killed off Blockbuster home-video stores across the US, thinks that’s the future of cinema. His subscription service, MoviePass, is offering US theatergoers a movie pass a day for $9.95 a month, a dollar more than a single ticket costs at US cinemas on average. The fee gets subscribers into one showing per day—excluding 3D and Imax—at movie theaters that accept debit cards, which MoviePass says includes 91% of all theaters in the country, such as popular AMC, Regal, and Cinemark locations.

“It’s something that everybody understands,” Ted Farnsworth, chairman and CEO of Helios and Matheson Analytics, a firm that just took a majority stake in MoviePass, told Quartz. “Everybody understands that from Spotify, or Netflix, or Hulu, or Amazon Prime, especially millennials. They grew up subscription-based.”

The service questions how much new movie releases are worth in a world dominated by subscription services like Netflix, Hulu, and Amazon that make movies available online along with all their other programming for one low monthly fee. Previously, MoviePass sold tiered plans for $15-50, but lowered the price to $10 for all subscribers because it’s a price point people are already comfortable with.

Farnsworth said MoviePass saw a huge boost in subscribers yesterday—it’s website also crashed—on the announcement of the new offering, but declined to say how many members it has. Insiders told the Hollywood Reporter it had about 20,000 subscribers on the $50 plan.

To keep theater chains happy, MoviePass covers the full cost of each ticket used by its subscribers, which it’s financing in part with the stake it sold to Helios and Matheson. That means it could take a loss on new users that go several times a month.

But cinema operators still worry average moviegoers won’t want to pay standard ticket prices when MoviePass members get unlimited showings for $10—an issue they’re already facing thanks to Netflix, which sends movies to streaming and simultaneously to theaters, and movies studios and services like Screening Room that want to shorten the length of time cinemas have to exclusively screen films.

AMC, the nation’s largest theater chain, says it’s talking to its lawyers about how to bar MoviePass from its locations, saying the “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 says it will no longer offer MoviePass discounts on movie passes, which thwarts part of the way MoviePass affords tickets.

The company cuts deals with exhibitors to get money back for the theatergoers it sends to them, Farnsworth said. It’s looking to land similar joint ventures for concessions, so it can earn revenue from the popcorn, candy, and sodas that its subscribers buy at cinemas. And it’s talking to movie studios about using the data it collects on members to better target them with movie ads and trailers within MoviePass’s app.

MoviePass argues radical change is coming to cinemas whether exhibitors like it or not. “It reminds Mitch of when Blockbuster Video said Netflix would never survive, or RedBox would never make it,” said Farnsworth. “The big dinosaurs like AMC, they just have to understand that we’re there to help them. We’re here to bring people into the theater.”


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