Hello, and Welcome to Movie Passes

SAN FRANCISCO (03/09/2000) - Six movie theater chains representing 12,000 movie screens in North America announced a deal Wednesday to sell movie tickets over the Internet.

Breaking a habit of fragmentation in the movie theater industry, Loews Cineplex Entertainment, Regal Cinemas, Cinemark Cinemas, General Cinema Theaters, Edwards Theaters and Century Theaters all joined the Internet deal. The theaters and two venture firms, General Atlantic Partners and Accretive Technology Partners, invested $30 million in the new company.

All six chains get an equity stake in the company and gave it exclusive rights to sell tickets on the Internet, over the phone and via wireless ticketing devices. The new company is expected to launch this summer with an enormous marketing campaign in the member theaters.

"We are working on recruiting an executive staff and building the technological infrastructure," says J. Michael Cline, managing partner of Accretive Technology and acting CEO of the new company. Cline, who ultimately expects to take the company public, also is recruiting other theater chains to become part of the investment group. "We want to partner with a variety of different participants to build the world's biggest place to access movie content, including reviews, ticket sales and related merchandise."

The company has immediate rights to sell tickets for all six chains, which sold a combined 600 million tickets last year. Consumers using the new service will be able to search for a particular movie, get local showing times and locations and buy tickets online. The site also plans to let consumers print tickets at home. "We are already in discussions with some technology providers," says Mindy Tucker, VP of Loews Cineplex Entertainment. "That's an important service that we want to offer our customers."

But movie listings and ticket sales are the tip of the iceberg for this Internet venture. The site will use the demographic information collected on moviegoers to offer relevant merchandise, such as a soundtrack to a movie that a consumer just saw or e-mail alerting the consumer of an upcoming movie in their neighborhood. "The demographics of the site are going to represent a large portion of the movie going public," says Tucker. "There will be a number of revenue sources that have not yet been finalized." Another potential market for the data is the movie studios. "We hope to partner with studios," Cline says. "We want to use the information to better target [consumers] with movies that they would like."

The new venture will be a strong challenger to , a big part of AOL's strategy to make this kind of information available on handheld devices. "We would discuss opportunities to work together," says Cline of AOL. A competing venture, MovieTickets.com was formed in February by AMC Entertainment, National Amusements and Hollywood.com. The two theater chains operate 4,400 screens in the U.S. On Wednesday, CBS took a 5 percent equity stake in MovieTickets in exchange for $25 million in promotions across CBS properties. The service is scheduled to launch for consumers on Memorial Day.

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