LOS ANGELES (CBS) MoviePass is often described as Netflix for moviegoers and makes money by collecting subscription fees.
The company now says location-based marketing could help it generate more revenue.
During a forum called "Data is the new oil: How will MoviePass monetize it?" CEO Mitch Lowe reportedly said, "We get an enormous amount of information... You are being tracked in your GPS by the phone."
Lowe also spoke about the importance of data mining in a recent interview.
"It's a real big part and the way we will use it is to help the studios know who wants to watch a particular film," Lowe told Screen Junkies News March 1.
"It's not a pass, it's spyware," said Jamie Court, the president of Consumer Watchdog.
Court says people can limit how much personal information their mobile phones reveal by changing the settings on their location services.
Reporter: Why is it a problem for MoviePass to know where we're at?
Jamie Court: We're signing up for free movies. And this just shows there are no free movies.
Reporter: It's probably about the restaurant you went to beforehand and how you got to that restaurant and how you're getting home from the movie.
Jamie Court: Exactly. It's ka-ching, ka-ching! That's how this company is gonna make money.
MoviePass is the latest tech company to face a backlash over data collection. After a public outcry in August, Uber said it would stop tracking riders for up to five minutes after their trip ended.
In December, CBS News reported on Google Home and Amazon Echo which Consumer Watchdog warned could become listening devices, a claim both companies deny.
"It almost feels a little bit like Big Brother-ish," said Elizabeth Saldebar, who owns an Amazon Echo.
"Data is the lifeblood of so much of Silicon Valley," said Nick Thompson, the editor-in-chief at Wired and a CBS News contributor.
Thompson says tech companies collect personal information not only to make money but also to make their services more efficient for customers.
"The problem is that a lot of these companies that are getting our data aren't-- I don't know-- totally clear? Totally honest? Totally open about it? So that's a big issue," Thompson said.