LAS VEGAS — The owners of America’s movie theaters are having a few good months, with February’s “Black Panther” an all-time box-office winner and this weekend’s “Avengers: Infinity War” enjoying the biggest weekend opening ever — $250 million.
But that encouraging news conceals a more disruptive set of forces that threatens to undermine theaters’ conservative — and decades old — business model.
The main reason for chaos: A Netflix-style disruption from a fast-growing movie-theater subscription service, MoviePass, that its executives say is a solution but many theater owners see as undermining the industry’s future.
The debate over the service offers a window into how a long-standing industry weighs how radically to change its business strategy in the hope of long-term success in the digital economy.
Digital entertainment options are causing more people to stay at home, and the Motion Picture Association of America recently reported that Americans for the first time last year spent more on streaming entertainment than movie tickets.
At the same time, the industry group reported that ticket sales fell to a 22-year-low last year.
At CinemaCon in Las Vegas, the annual convention of theater owners, much of the convention-floor talk centered on incremental changes such as better screens, improved food and seats that recline, the last of which has become a popular go-to and are in some Corridor movie auditoriums.
The idea with all these tweaks, which have drawn people to theaters even as they have sometimes increased sticker shock, is to give consumers added incentive to tear themselves away from that “Stranger Things” binge-watch.
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But a more radical solution has come in the form of MoviePass. With the service, people pay $10 a month to MoviePass to see either four or an unlimited number of movies, depending on when they signed up.
The company then pays the full cost of each ticket to the theater.
MoviePass has taken the sector by storm, attracting nearly two million new subscribers over the past year. It is estimated MoviePass will reach five million subscribers by the end of the year.
But as they stood outside a theater after a Warner Bros. presentation, two independent-theater owners hashed out the question that’s been at the top of everyone’s mind this week.
“I like that someone else is advertising to customers and then paying for their tickets,” said Randall Hester, the owner of Hometown Cinemas in Austin.
“But they’re making it seem like the movie ticket isn’t worth anything,” said Amy Tocchini, who owns Santa Rosa Cinemas in northern California.
“And what happens if they go out of business? What customer will be willing to pay full price then?”