MoviePass Ventures

MoviePass is moving on from the theaters to the movies themselves.

The movie ticket subscription service has launched MoviePass Ventures, a subsidiary that will co-acquire films alongside film distributors with the aim of releasing them theatrically and digitally. With this bold move, MoviePass — which will begin its acquisitions at this year’s Sundance Film Festival — may be able to fill the hole that Amazon Studios could soon be leaving at independent film festivals.

MoviePass announced the formation of MoviePass Ventures, described as a “wholly-owned subsidiary founded to co-acquire films with film distributors” at Sundance, where the company was debuting its content series “Off-Script: The Future of Film.” MoviePass CEO Mitch Lowe told the room of filmmakers, producers, directors, investors, distributors, and other industry executives:

“We’ve experienced enormous success bringing people back into the theaters since our launch in August and with an influx of business from distributors, have proven the impact of our marketing over and over again, giving them an incremental lift in ticket sales. Given the successes we have demonstrated for our distributor partners in ensuring strong box office in the theatrical window, it’s only natural for us to double down and want to play alongside them – and share in the upside.”

According to MoviePass, the company is already purchasing 3% of domestic box office. However, it has been purchasing more than 10% of the box office for a few titles that it has been heavily marketing, films such as The Post, Three Billboards Outside Ebbing, MissouriCall Me By Your Name, and The Shape of Water. Suddenly, the service’s aggressive promotion of I, Tonya earlier this month makes a whole lot of sense. It seems that MoviePass’ marketing boosts of independent films was a dry run for the company to get into the film acquisition market, usually an area reserved for film distributors or financially powerful companies like Amazon.

This was a hugely unexpected move for MoviePass, which I had assumed would take its next steps into the original content streaming field, not theatrical distribution. It’s an odd move for a company that appears to be on shaky financial ground, repping an appealing but unstable financial model that doesn’t seem built for the longterm. But MoviePass seems confident that “boosting performance in the theatrical window” will reap rewards for them by creating “greater downstream revenue” for streaming and home video platforms. Is that a hint that MoviePass plans to expand into the streaming field as well?

While that’s unclear for now, it is clear is that MoviePass Ventures is going full steam ahead, with Ted Farnsworth, CEO of Helios and Matheson Analytics Inc., announcing that the subsidiary will make its first acquisitions at Sundance. “We aren’t here at Sundance to compete with distributors, but rather to put skin in the game alongside them and to bring great films to the big screen across the country for our subscribers,” Farnsworth said. “We’re open for business. We’re here at Sundance – and SXSW is next.”

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