Mikey Campbell
The CEO of MoviePass, a popular iOS app and subscription service that lets customers watch a movie a day, caused a bit of a stir in announcing the software tracks user locations via GPS after trips to the theater.
In a recent talk at the Entertainment Finance Forum, first reported by Media Play News last week and subsequently highlighted by TechCrunch on Monday, MoviePass CEO Mitch Lowe offered insight into the company's financial structure, specifically how the firm is able to offer its users a movie a day with a $9.95 per month subscription.
Currently, MoviePass pays theaters the going rate for each ticket, but is looking to garner discounts and revenue sharing deals in exchange for driving traffic, the report said. Prior to Lowe's talk, MoviePass has been for the most part vague on the inner workings of its financial model.
Perhaps more interesting, or for some concerning, is that the app gleans location information from its users.
"We get an enormous amount of information," Lowe said. "We watch how you drive from home to the movies. We watch where you go afterwards."
Beyond GPS-based user tracking, the firm also knows user addresses, which is helpful in determining demographic segment information.
Lowe hinted at potential user data collection and monetization practices during an interview with Recode last month.
"Netflix buys $8 billion of content a year, and believe me, they have to borrow the money to do it. Or companies like Facebook — it's free, but they're monetizing all the advertising and all the data about you. That's exactly what we are [doing]."
For its part, Lowe said the location tracking feature will one day allow MoviePass to build out user-facing services that span far beyond the theater. For example, the information might be leveraged to suggest nearby restaurants to users looking for a bite before or after a show. These vendors would presumably pay MoviePass a small portion of proceeds for the recommendation.
"Our bigger vision is to build a night at the movies," Lowe said.
Location tracking is alluded to in MoviePass' privacy policy, which notes the app requires access to a user's location when selecting a theater. The information collected in a "single request" to iPhone hardware will also be used to "develop, improve and personalize the service," the firm says.
User tracking is a hot button topic in the smartphone world. For Apple, the issue dates back to at least 2011, when it was discovered that iOS 4 regularly logged location data from iPhones and iPads. Subsequent scrutiny from the media and the U.S. government prompted quick action from Apple, which with iOS 5 began to limit access to unique device identifiers (UDIDs) previously used by apps to track users.
Reports on Lowe's talk were published just days after Apple threw a spotlight on MoviePass in the iOS App Store. In a "Meet the Developer" segment posted late last month, founders Stacy Spikes and Hamett Watt touted iPhone as key to the development and success of MoviePass.
"The idea was almost too early," Spikes said, referencing an earlier attempt at an all-you-can-eat business model he kickstarted in the late 1990s. "We didn't have iPhones and apps to figure out payment and interfacing. If it weren't for that development, MoviePass would never have happened."
Update: In a response to The Verge, MediaPass said it is only exploring the use of location-based marketing to enhance user experiences, promising that any collected data would not be sold to third-parties. As Lowe said, any data harvested from its app would be put toward the creation of a more complete and entertaining movie night experience.
At MoviePass our vision is to build a complete night out at the movies. We are exploring utilizing location-based marketing as a way to help enhance the overall experience by creating more opportunities for our subscribers to enjoy all the various elements of a good movie night. We will not be selling the data that we gather. Rather, we will use it to better inform how to market potential customer benefits including discounts on transportation, coupons for nearby restaurants, and other similar opportunities. Our larger goal is to deliver a complete moviegoing experience at a price anyone can afford and everyone can enjoy.
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25 Comments
To be clear, the app requires you allow it to use location information (track you continuously) as part of the deal to get the movie price, right? IOW, to get the generous offer, you agree to provide it the location data they ask for? My recollection is that you have to turn location sharing on in the app settings in iOS, so presumably if you don't do that, you can't use the app, and get the deal.
This junk is why the only app on my iPhone that doesn't have either "While Using" or "Never" set as the Location Services privacy option is Apple's own weather app, which really doesn't need that permission either, so I should probably change that as well. I typically purge apps from my phone if the only options are Always or Never. I've contacted a couple vendors who have replied, "We promise to only collect data while you're running the app", to which I reply, "then provide the -While Using- option for Location Services. This will possibly come to a head when I start using ForeFlight Mobile again, which is the defacto standard for in-flight navigation maps and only gives you the Always/Never choices. Never defeats the 99% of the benefit of that particular app.
So is there a “while using” option under Location Services for this app? If so, then just turn it off after getting your ticket.
I don't use this app, but it's no wonder that apps like these burn up our phone batteries. I'm not actually against this kind of stuff simply because I know that companies are trying to make money by "saving" you money, and if you're able to watch one move a day, every day for 9.99/month at a theater where tickets to movies where I go are almost $20/movie, then the user can't suddenly start complaining that the company is making their money by selling everything about you.
What I don't understand are why people are having a problem using a service that is technically free, or heavily discounted for the user... and then get upset that the provider is collecting information about you in order to make ends meet on the back side in order to remain profitable. People don't want to pay money to use exclusive services, so this is how online companies make money off of you. Otherwise, many things we take for granted on our phones simply would not exist.
This is a violation of Apple's store guidelines and should get the app pulled. Here's why. Under settings > location services > MoviePass, they explain they will use tracking data only to "Find Theaters and movies near you, and be able to use the app to get tickets and the theaters". There is nothing about tracking you outside of that purpose. Nothing about your drive to the theater, nothing about where you go after. They are sufficiently vague in their privacy TOS ("supply us with personal information so that we can provide, enhance and personalize our services and marketing efforts"). But they are definitely lying in their "app explanation" regarding location services.