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Published: Saturday, 9/3/2011 - Updated: 3 years ago

Movie ticket service rattles theater owners


LOS ANGELES — About 100 people recently showed up at a San Francisco cinema for a free screening of Transformers: Dark of the Moon and a presentation of a kind of Net­flix for movie theaters.

The service, MoviePass, would allow watching unlimited movies for a $50 monthly fee, using smart phones to download codes to be redeemed for tickets at theaters. With AOL Ventures’ backing, the start-up had planned a rollout this fall with ticket firm MovieTickets.com.

But before a single pass was sold, AMC Entertainment Inc. and other theater chains blasted MoviePass, saying they were blindsided and would not honor the pass.

“Plans for the program were developed without AMC’s knowledge or input,” Stephen Colanero, AMC’s chief marketing officer, said.

The proliferation of steep discounts on movie tickets is causing anguish in the exhibition industry.

In theory, theaters stand to benefit if the promotions bring in more customers who buy popcorn, soda, and other high-profit concessions. And with most promotions, theaters get the full ticket price because third parties cover the discounts’ cost. But exhibitors fear the marketing of low-priced tickets through discount services such as Groupon and LivingSocial will erode business by inspiring moviegoers to wait for bargains before trekking to the megaplex. Movie-theater owners also express alarm that studios’ plans to release movies via video on demand just eight weeks after theatrical release will further erode business.

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