MoviePass' Days Look Limited (bloomberg.com)

Kyle Stock writes via Bloomberg: Eight months after slashing its price and expanding membership past 2 million users, MoviePass is now at risk of going bust. The parent company, Helios & Matheson Analytics, which now owns 92 percent of MoviePass, said last week that it had just $15.5 million in cash at the end of April and $27.9 million on deposit with merchant processors. MoviePass has been burning through $21.7 million per month. A U.S. Securities and Exchange Commission filing last month revealed that the company's auditor has "substantial doubt" about its ability to stay solvent. Michael Pachter, an analyst at Wedbush Securities Inc., warns that MoviePass may not survive the summertime run of blockbusters. On Tuesday, Helios reported the performance of MoviePass for the three months ending on March 31. The company lost $107 million, earning just over $1 million from marketing deals and $47 million from subscriptions. Helios shares have fallen to decade lows of less than $1 after peaking at $32.90 in October, alongside the MoviePass hype.

Comments

Re:Sigh.

[bws111]

You may not know exactly what stocks your 401K is invested in, but you should at the very least know if you are in 'aggressive, moderate, or conservative' funds. If you can't stand the risk that new companies/new business models represent, then you should not be in an aggressive fund. And if you were in a moderate or conservative fund, then you were most certainly NOT invested in Helios.

Re:monetization

[Dare978Devil]

A cut of concessions was likely out of the question. Studios are still taking 60% of ticket prices from theaters, meaning the only viable means of making money for a theater owner is concessions. That's the reason popcorn is 8 bucks.

Re:monetization

[randomErr]

But I suspect that the long term plans included things like striking deals with movies theaters for a slice of the concessions (arguing increased traffic)...

When MP first came out they bought large block of ticket credits from various chains at about $.75 - $1 a piece. Most people were only using the service about 2-3 times a month. At the time it was a $30/month subscriptions which made them a ton of money .(I heard these part on a radio interview with president at the time about 3 years ago.) Theaters saw concessions and attendance go up which was a great time for everyone.

Then the theaters said 'As more people use the system we're getting a lot complaints customers on how the system work. Why don't we do the same?'. The chains started raising the prices on MP to about $2-3 per ticket to cover their cost dealing with complaints. With MP's administration costs and the lowered subscription price they were loosing about 1-2% on every subscription. This was compounded by attrition from member's credit cards expiring (see comments below). Since the theaters 'owned' ticket already they realized that loosing money to a middle man. The big chains already had movie clubs so they modernized it (easier to use member cards), dropped the price, and added roll-over concession perks. Plus the chains also got additional demographics they never had before.

The Movie Pass application system is just plain clunky to use:

• After sign up everything was done in the poorly designed phone app. It's a resource hog for no reason. Nothing is controlled through website even though that had the API's for the applications.
• You had to sign-in too buy ticket via the app AT your location. You couldn't but them from home to save time. You had use data and have a good GPS on your.
• You had to use a special credit at the theater and hope your earlier sign-in has register with the credit authorization system. That also meant to carry an extra card instead of just using the phone.
• Neither the website or the app would let you update your credit card information. When your credit card expired you had to get a new account

A few things can (would have) of fixed:

• Web interface to let you update you information and buy tickets at home
• Get rid of the credit card and use a 'member' card with a QR/bar code that could be scanned.
• OR display a QR/bar code on your phone (additional security if it rotated every so often)
• OR let you just print a ticket from home and do away from all the above BS