MoviePass has pulled its participation from 10 AMC movie theaters following disagreement over the theaters’ support of MoviePass’ $9.95 monthly movie subscription model, which uses a Mastercard to guarantee payment through its app.

AMC theater door
Bloomberg News

“Since the get-go, AMC has not been interested in collaborating with MoviePass—a move that’s not in the interest of our subscribers and AMC theater-goers,” said Ted Farnsworth, chairman and CEO of Helios and Matheson, which owns MoviePass, in a Friday statement.

Some MoviePass subscribers reportedly were told by certain AMC theater managers that they didn’t accept MoviePass, despite card network rules that require all Mastercard merchants to accept those payments. The use of a Mastercard allows MoviePass subscribers to obtain tickets at theaters that do not have a direct relationship with MoviePass.

“We’ve pulled 10 AMC theaters—less than 2% of theaters. We already know in past testing that MoviePass subscribers are not theater-loyal and they’re happy to drive by a theater that may be close to a theater that will accept MoviePass—because of its value,” Farnsworth said in the statement.

In each location where MoviePass pulled support from an AMC theater, there is a nearby theater supporting the subscription service, Farnsworth added.

MoviePass cut its subscription fee to $9.95 in August 2017 and membership surged from 20,000 to more than 1.5 million. The service is on track to reach 2 million in the next few months, MoviePass said.

The service reimburses theaters for the full price of a movie ticket for each subscriber, operating on the concept that subscription revenue will surpass those individual ticket costs.

AMC said in a previous statement that it objects to the MoviePass model, which it says isn’t sustainable.

“Since reducing our subscription fees, we’ve seen a dramatic increase in movie theater attendance among our subscribers, which proves to us that MoviePass is working to revitalize a declining industry,” Farnsworth said in the statement.

“Many exhibitors have been receptive to this mission, and we’re excited to keep working with theater chains that are closely aligned with our customer service values,” said Mitch Lowe, MoviePass CEO, in the statement.

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