MoviePass CEO Mitch Lowe on Monday walked back comments he made two weeks ago regarding the company’s use location data.
During the Entertainment Finance Forum in Los Angeles on March 2, Lowe said MoviePass uses the app’s location permissions to “watch how you drive from home to the movies.”
“We watch where you go afterward. And so we know the movies you watch — we know all about you,” Lowe said.
Shortly after his comments sparked furor, MoviePass issued an update to its app removing “unused app location capability,” and on Monday Lowe signed off on an apology to the company’s user base.
“Through a mix of exuberance about our future and joking around, I mischaracterized how MoviePass locates our members and I need to fix that,” Lowe said in a statement sent to MoviePass subscribers. “It has raised a lot of concerns and I understand why.”
Lowe stressed that MoviePass takes customer privacy “extremely seriously” and that the app does not track the location of users when the app is not active.
“There are only two events that would prompt MoviePass to identify a member’s location. These include when a member requests to search for theaters nearby and when a member requests to check into a theater,” Lowe said. “Both events require both the app to be open and for the member to request the action.”
MoviePass is a subscription service that charges its users $9.95 per month in exchange for seeing one movie per day for free. With the average month having 30 days, a power user of the service pays about $0.33 per movie they see at one of the participating theaters.
The company has not been shy about how where its profits come from, what with data firm Helios and Matheson Analytics holding a majority stake in the company. And with more than 2 million subscribers, the company has a sizeable audience sample.
“We get an enormous amount of information,” Lowe said. “Since we mail you the card, we know your home address — of course — we know the makeup of that household, the kids, the age groups, the income. It’s all based on where you live. It’s not that we ask that. You can extrapolate that.”
In addition, MoviePass has a record of every movie its subscribers attend, when its subscribers like to go to movies, and it knows where they like to see them.
In an interview with Wired, Lowe explained that using the data the company collects on its users and by fostering an enthusiastic user base, MoviePass “can help studios turn a movie that is a hit or a miss into a hit.”
“We can get the right people into the theater,” Lowe said.
For the Nov. 17 opening of Sony Pictures’ Roman J. Israel, Esq., starring Denzel Washington, MoviePass accounted for 13.21 percent of the opening weekend box office.
More telling, MoviePass said its active promotion of The Man Who Invented Christmas realized a 48.3 percent lift to ticket purchases compared to a control group outside of the marketing campaign.
“The data speaks for itself — our data shows that MoviePass has a demonstrable impact on revenue figures and percentage contributions to overall box office receipts for both major studio releases and independent films during opening weekend,” Lowe said.
The company announced last month that HMNY had acquired a larger percentage of MoviePass, bringing its total ownership of the company to approximately 78 percent.
