Business Insider

It's been a busy two months for MoviePass CEO Mitch Lowe, but he's relaxed and friendly as we discuss what it's like to be thrust into the spotlight overnight.

In August, his startup caused a frenzy by dropping the price of its subscription, which lets you see one film a day in theaters, to $9.95 a month.

The public went nuts, MoviePass struggled to keep up with more than 100,000 new subscribers, and the theater giant AMC began squawking in the press, vaguely implying it might take legal action.

The $9.95 price point had captured people's imagination. But critics questioned whether the MoviePass model, which relies on MoviePass paying theaters the full price for tickets, would collapse under its own weight (even after $27 million in fresh capital).

That critique still hangs in the air. But as someone who signed up on the day of that price drop, and who has been using MoviePass for a few weeks, I can confidently say it has already changed how I think about movie theaters in a fundamental way.

'Mother!' versus 'Good Time'

Lowe told me that when people first sign up they go through a bit of a high. They are excited, and they see a bunch of movies before settling into a regular pattern. That was certainly the case with me.

MoviePass CEO Mitch Lowe. MoviePass

But there was another, more important trend Lowe mentioned that rings true in my experience: MoviePass customers, he said, are generally more likely to see smaller movies — to take chances, if you will. And it makes sense. They aren't paying for each movie, so why not?

Let me give you an example. On a recent weekend, I saw two movies: "Good Time," an indie heist-gone-wrong movie starring Robert Pattinson, and "Mother!," Jennifer Lawrence's allegorical horror film.

Without MoviePass, I most likely would have seen only one of those, and it probably would have been "Mother!" given that I've liked the previous work of its director, Darren Aronofsky. But I hated "Mother!" It's really hard to understate how much I detested it. (And I wasn't the only one.)

So in this MoviePass-free world, I would have watched "Mother!," which I hated, and missed out on "Good Time," which I loved.

"It's bad-movie insurance," Lowe joked. But that has an element of truth to it. Not only would I have not seen "Good Time," but I probably would have felt burned by "Mother!" and not gone to a movie for a few weeks (unless there was something I really wanted to see).

But I had MoviePass. And because I didn't feel as if I paid anything extra to see "Mother!," at the end of that weekend it didn't bother me that I'd seen a dud. I mostly just remembered how much I liked "Good Time" and looked for how I could watch other films by the Safdie brothers.

By myself

MoviePass has also made me more likely to go to movies by myself. Before MoviePass, I had done this maybe three times in my entire life.

But now I'll make the spontaneous decision to see a movie in theaters if I have a few hours to kill. New York City makes this especially easy with movie theaters scattered around the city.

And MoviePass has also changed the times I might go. Twice I've gone to movies by myself on the weekend, around 4 or 5 p.m., right before my dinner plans.

Lowe said he hadn't been tracking whether MoviePass users were more likely to visit theaters by themselves, but he said they certainly altered their time patterns. He said in particular that he had seen that people went more often during the week.

Seeing a movie in theaters has become an option for me to kill time as opposed to an event. Sure, there are some movies that I want to see with other people, but generally movies are fitting into my schedule in a different way now.

I also bought popcorn at one movie, which I never do. (Lowe said a yearlong, third-party study with AMC showed that MoviePass subscribers spent 123% more on concessions than moviegoers who were not members.) Truthfully, buying popcorn still felt extravagant, and I probably won't do it regularly — but that's up from zero.

Breaking even

There are still big questions around the MoviePass model of paying theaters outright for the tickets. Lowe acknowledged that it would be challenging to raise money to pay for the influx of new customers (remember, people tend to go to movies more often when they first get MoviePass, which costs the company money).

But the MoviePass team is seeking to make it more manageable. While most MoviePass users must still buy movie tickets in person with the service's debit card, 6% of theaters now allow you to buy tickets within the MoviePass app. That fixes the most annoying thing about MoviePass: that it's hard to buy tickets ahead of time. Theaters in the program are touted in the MoviePass app — which Lowe said draws more customers to those theaters — and in return give MoviePass a 20% discount on tickets.

That's just the first step, however.

The larger idea is to connect the MoviePass app to concessions and even nearby restaurants, with MoviePass taking a cut. Lowe also wants to use the app to promote certain movies, whose backers will presumably pay MoviePass for the privilege as well.

"We are just trying to break even on subscription," Lowe said. All the other facets are where MoviePass thinks the real money can be made.

The path forward

Perhaps Lowe's dream will fail.

AMC is whispered to be launching its own subscription service this fall — one likely reason its relationship with MoviePass soured recently — and as Lowe acknowledges, MoviePass needs a lot of money (to pay to theaters).

Maybe $9.95 a month is too low and MoviePass will never quite be able to find a price point that is sustainable. Or maybe young people simply aren't as interested in going out to a movie, with luxurious big-screen TVs at home and smartphones in their pocket.

Still, from my experience, the answer to whether MoviePass can change the way you think about going to the movies is a resounding "yes." How I go to movies, and the type of movies I go to, has changed. Full stop. That's not conjecture any longer.

And I like it.

Lowe, who was part of Netflix's founding team, is adamant that young people have become used to entertainment subscriptions like Spotify, Netflix, and Hulu. There is something about the pay-for-unlimited-access model that is appealing.

And the real heartening aspect, for a movie lover like me, is that my MoviePass subscription has made me more likely to see smaller films. My hope is that this could spark a change in behavior more broadly, to push back — a bit — against the trend of risk-averse movies from big studios.

If you think that's far fetched, think about how Netflix has changed the market for documentaries. If you were browsing a Blockbuster aisle looking for something to rent, you'd perhaps be unlikely to reach for a documentary. But when it's one click away, and no incremental cost to you, all of a sudden it seems more palatable. And voilá, documentaries have become huge on Netflix.

I'm not suggesting that suddenly we'll be seeing a flood of documentaries in theaters because of MoviePass, but a change to a subscription model can indeed affect what we watch.

And if MoviePass can find a firm footing financially, I'm eager to see how it could change the kinds of movies we see on the big screen.