August 31, 2011 at 12:09 PM CDT - Updated June 25 at 8:12 AM
By RYAN NAKASHIMA AP Business Writer
LOS ANGELES (AP) - Startup discounter MoviePass Inc.'s test run to offer unlimited movie tickets for a fixed monthly fee was aborted in July amid a dust-up with theater chains. Now, it's back in line with a new plan that it believes will work even without the explicit consent of cinema owners.
MoviePass said Tuesday that it will launch an invitation-only test of its new system next month in partnership with Hollywood Movie Money, a company that provides promotional movie tickets to customers and reimburses theaters when they are redeemed.
They say that such vouchers are regularly used by a wide variety of companies, from The Walt Disney Co. to Proctor & Gamble Co., and don't require theaters to know who is paying for them.
"We are the traveler's checks of movie tickets," said Ron Randolph-Wall, the chief executive of Quantum Rewards, the operator of Nevada-based Hollywood Movie Money. "Our business is only about settlement."
Hollywood Movie Money is offering to pay theater owners the full price of a regular ticket when MoviePass customers take in their print-at-home vouchers.
In exchange, MoviePass plans to charge customers a fixed fee every month or year. The fee, which has yet to be determined, will depend on how much tickets cost in different markets.
In July, MoviePass abandoned a trial run in San Francisco after 19,000 people tried to sign up in one day.
AMC Theatres, the nation's second largest chain with more than 5,100 screens in the U.S. and Canada, said at the time that it had not been consulted on the program and would not participate.
Part of the problem was that it was unclear if frequent AMC patrons would have MoviePass purchases count toward their rewards program.
A person familiar with the situation said Tuesday that MoviePass had not made any new attempt to contact cinema owners. The person was not authorized to speak publicly and requested anonymity.
Even if the test does get under way as planned in September, it's unclear if customers will buy in.
The aborted offering in July would have had customers pay $50 a month for unlimited movie tickets.
The catch is that only one ticket is issued per customer at a time. With movie tickets running between $11 and $13 in the Bay Area, moviegoers would have to trek to theaters at least once every weekend - or four times a month - to make the deal worthwhile. They'd have to go more often to realize any savings.
Stacy Spikes, the co-founder of New York-based MoviePass, said the company is conducting national surveys to determine what price it should charge "in a way the consumer feels they're getting a value."
Since MoviePass is paying the full price of a ticket to theaters, the only way for the company to make money is if customers go to the movies that often - kind of like the way a gym makes money if it gets lots of paying members who hardly work out.
But Spikes said the company is also considering other ways of generating revenue such as selling access to its customers to advertisers and selling market research.
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