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MoviePass CEO Addresses Privacy Concerns, Says App Has Never Monitored Users’ Locations

March 14, 2018

MoviePass CEO Mitch Lowe said he misspoke at a recent industry conference in describing the kinds of data the company tracks on its users — and he emphasized that the startup will always allow customers to opt in to location-based marketing offers in the future.

Last week, MoviePass removed a feature from its iOS app that would have let the company continuously track the location of customers. That came after Lowe’s comments at an entertainment finance conference in L.A. the week prior boasting about the wealth of personal data MoviePass aggregates on customers.

“We get an enormous amount of information,” he said March 2 at Winston Baker’s Entertainment Finance Forum. The MoviePass app tracks users “in your GPS by the phone… so we watch how you drive from home to the movies. We watch where you go afterwards, and so we know the movies you watch. We know all about you. We don’t sell that data. What we do is we use that data to market film.”
In an interview with Variety on Monday, Lowe said he was mistaken about what data the MoviePass app actually collected. “I said something completely inaccurate as far as what we are doing,” he said. “We only locate customers when they use the app.”
He added, “If you get in your car and drive five miles, we don’t know where you are or where you are going.”

The MoviePass app checks the location of a user only on two different occasions, according to Lowe: when they’re checking for a participating theater in their area and when they check in to a theater (to verify their credit card).

MoviePass made the update to the iOS app in consultation with Apple. Previously, the app gave users Apple’s three standard privacy options: never track; track when using the app; and always track. Lowe said the app never activated the “track all the time” capability. “We never used it, and it was confusing to have it there,” Lowe said.

In the future, MoviePass envisions building out “this whole ‘night at the movies,’” to give customers recommendations of what to do before or after seeing a movie — for example, getting a special offer from a nearby restaurant. “When we do that, if we do that, we’ll send a request to each customer to let them opt in or opt out,” Lowe said.

As far as the information MoviePass shares with exhibitors and studios, Lowe said that data is completely anonymized. “There’s never any personal information” shared with partners, he said. “We never reveal any information that will let them know who bought what.”

According to Lowe, about “half a dozen” customers said they canceled their service over the privacy concerns. “It’s not a huge number,” he said.

MoviePass currently has about 2 million subscribers, and Lowe has predicted that it will top 5 million by the end of 2018. But many industry observers are skeptical that MoviePass’ model is sustainable — given that the New York-based startup subsidizes moviegoing at a substantial loss.

The company’s plan has been to generate additional revenue by sharing customer-viewing data it collects in deals with studios, exhibitors and other potential partners.
Meanwhile, the startup has encountered resistance from some theater chains, including AMC Theatres. MoviePass says its service is now accepted at more than 91% of theaters across the U.S.

After initially launching the service starting at $30 per month, MoviePass cut its monthly pricing to $9.95 last summer. Then in February, it introduced a plan that works out to $7.95 per month (for customers who pay $115.35 for one year, which includes a $19.95 processing fee). MoviePass subscribers may see up to one movie per day at participating theaters, with certain restrictions.

According to MoviePass, the company currently buys around 6% of all domestic movie tickets. Lowe predicts it will be buying around 20% of all tickets by the end of this year.

MoviePass sold a majority ownership stake to data firm Helios and Matheson Analytics for $27 million last summer. Other investors in the New York-based company have included Lowe, True Ventures, NALA Investments, WME, and former Facebook chief privacy officer Chris Kelly.

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