March 26, 2018
NEWS ANALYSIS — Movie theater subscription service MoviePass’ recent announcement offering first-time annual subscribers access for $6.95 a month – 30% below the standard $9.95 rate – underscores increasing consumer concern about data privacy.
CEO Mitch Lowe said the price cut is an attempt to make the moviegoing experience “easy and affordable” for everyone. Apparently, paying less than $10 monthly to watch one theatrical screening per day amounts to fiscal overreach for consumers.
Or could it be in reaction to Lowe’s loose lips at a recent industry event (first reported by Media Play News), dubbed, “Data is the New Oil: How Will MoviePass Monetize It?” in which he bragged about MoviePass tracking subscriber activities before and after screenings?
“We watch where you go afterwards,” he said without concern.
Of course, Lowe had no idea about the looming Facebook data tsunami and ensuing fallout after the social media behemoth admitted selling the personal data of 50 million subscribers to a foreign consulting firm with ties to the 2016 presidential election.
The debacle has reportedly cost Facebook more than $60 billion in market capitalization, scrutiny by the Federal Trade Commission, calls for increased regulation and founder/CEO Mark Zuckerberg’s pending grilling before Congress.
Not to mention increasing public distrust how Internet giants Amazon, Google, Yahoo and others track user behavior and what they do with that information.
To be sure, Lowe rushed out an email to subscribers claiming his comments about MoviePass data mining had been mischaracterized.
Wedbush Securities analyst Michael Pachter isn’t so sure.
“The media reaction since indicates that many do not believe it was a ‘mischaracterization,’ especially given Facebook’s recent debacle with Cambridge Analytica,” Pachter wrote in a March 26 note.
Indeed, MoviePass hasn’t explained what it does, or will do, with the subscriber data – other than market/leverage it to exhibitors for reduced ticket prices or a percentage of concession sales — a reality, Pachter contends, harbors ongoing concern about the service’s long-term viability.
“Additionally, we now harbor concerns about the potential for consumer backlash should [MoviePass] collect certain data without consent, or improperly use the data it collects,” he wrote.