Blame it on digital diversions, higher ticket prices or the onslaught of reassembled blockbusters that people would rather wait to see in their living rooms. Whatever it is, it’s turned into a growing nightmare for the movie business, which seems incapable of drawing big audiences on a consistent basis anymore. Check the numbers. According to Hollywood.com, 2013’s year to date box office is barely on par with 2012 — which recorded the worst summer turnout in nearly two decades.
Stacy Spikes would like to do something about that. No, he’s not interested in making another post-apocalyptic popcorn flick with superheroes, starships, zombies, a teenage heroine and stuff blowing up. (That’s already in development.) Spikes, a Texas native, wants do something much harder: change the way Hollywood operates. His new venture, MoviePass, is a subscription service that provides nearly unlimited access to movie theaters.
With the current version, members pay a flat fee of $30 to $35 per month (depending on your location), and are given a special debit card they can use in combination with a smartphone app to purchase up to one ticket per day. Spikes and his business partner Hamet Watt are betting big on MoviePass, which is backed by a group of deep-pocketed investors, including William Morris Entertainment. They believe the company, with its ability to track movie-related behavior, mold advertising and offer personalized VIP goodies, has the potential to be a force in the entertainment world.
If he weren’t already its chief executive, Spikes would definitely sign up for MoviePass. He can’t get enough of movies. The bookshelves in his Manhattan apartment are dotted with bestsellers-turned box-office hits, everything from The Grapes of Wrath to How Stella Got Her Groove Back, which premiered at Urbanworld Film Festival, founded by Spikes in 1997. He is also prone to quote lines from famous films — sometimes in character … with the vocal inflections. This is a guy who ducks into a multiplex at least once a week, often Friday morning so he can catch films on opening weekend. And he’s genuinely concerned. “Our business has to evolve to survive,” says Spikes, of his decision to create MoviePass. “There are kids taking our lunch because they’ve shifted to a subscription model. I think it’s worth trying.”
We chatted with Spikes about how his business could revolutionize Hollywood:
EBONY: Movies don’t pack ’em in like they used to. What happened?
Stacy Spikes: Television! [Laughs] There’s this great chart that shows cinema attendance and the birth of TV just chops it down. People make the comparison to bookstores and record stores. That’s not the comparison; it’s recorded and live-music. Movies are like the live event and 25 million people still go to the movies every weekend; 45 million go once a month. That’s still a big chunk of society.
EBONY: How many subscribers do you have?
SS: We’re still in beta so we haven’t released our numbers yet. We’re looking at the wave patterns in a MoviePass life cycle. What does it cost to get a customer? How do subscribers behave when they come in? We’re still learning. I think either fourth quarter or first quarter of next year we’ll come out of beta when we’ve had a full year of analytics.
EBONY: That’s a ton of numbers to crunch.
SS: We split users into different demographics, breaking them down by age gender, location, etc.
EBONY: Who’s your biggest group?
SS: 75% are under the age of 35. And we’re 60% male.
EBONY: Which movies have been popular with MoviePass subscribers this summer?
SS: The best attended was Man of Steel. But our subscribers see a lot; they’re strong first weekenders. They’ll go see the blockbusters. But what we found, which is an interesting phenomenon, is they’ll also support movies people were on the fence about. Where other people are like, Oh, I don’t know if I want to spend my money, the MoviePass customer goes, Well, I kind of paid for it so it’s not a risk.
EBONY: How would you know something like that?
SS: We saw Silver Linings Playbook shoot up 600% in our system. Those types of films rise faster with us than in the general market. So we really make a difference on the smaller or independent films.
EBONY: What’s the record for ticket purchases? Has a subscriber gone to the movies every day of the month?
SS: The most is 29 times in one month.
EBONY: You’ve described MoviePass as a data-driven company. That kind of talk opens doors in Hollywood. But isn’t there a dark side to this obsession with data?
SS: When data is used for what they call “dark marketing,” it’s used against you as a consumer. For us, it’s about [strengthening the bond between studios and movie lovers]. If I like Tom Cruise films, he may do movies at different studios. One studio doesn’t know from the other who went to see those films. But MoviePass could say, Wow, Stacy always goes to Tom’s film and he sees them opening night. And he has a blog and he tweets; he influences people to go. Suddenly, MoviePass becomes something that helps you get the word out with people who are already diehard moviegoers. If a studio wants to fill a word-of-mouth screening, MoviePass can help you put the right people in the seats rather than guessing. We don’t have to guess. We know.
EBONY: Exactly how much do you know about individual subscribers?
SS: We know people’s Klout Scores, or their social credit rating. Klout looks at number of friends, followers, [your online interactions and connections with content, all that, to decide how influential you are]. It’s pretty fascinating.
EBONY: In addition to the subscription service, your business hopes to turn a profit in part by selling ads.
SS: We have four customers: the theater, studio, customer and advertiser. When you sit in the theater today, before the movie you get stuff you don’t care about. Our ads target a fan by his interest in a particular film. Did you see A Good Day to Die Hard? It was a big Mercedes commercial. But Mercedes doesn’t know who went to see it. We do, and if ticket buyers express interest in a behind-the-scenes clip maybe they want to test-drive the car Bruce Willis drove. They might want to know about a vacation package to a Mercedes Driving School. You can’t do that today! With our service you can.
EBONY: You’re not doing this yet. This is what you’re building to.
SS: Right. This is a scale business. If you ask me, MoviePass is more like Google for moviegoing, than Netflix. The analytics is what makes the relationship between content creators and consumers gel. Two years ago there was no app to do this. Five years ago there was no phone. We’re at the right place at the right time to create something that can revolutionize our industry.
EBONY: And what did you think of the prediction by Lucas and Spielberg that movie tickets will cost $150?
SS: I was alarmed. I mean, somebody better fan me and feed me popcorn for $150. Personally, I think we’re in the midst of a rebirth. There’s a new group coming on line that’s used to social, movie-related merchandise and subscription models. These things are all swirling together. People say, give me the soundtrack, the graphic novel, the movie in theaters — and let me see it first because I’m loyal. Now a Legendary Pictures could say, “You saw every Dark Knight movie. You’re our people. You’re going to see the next one first.” [Holds up his phone with app] And this thing is going to determine who gets in the door. That’s power!