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MoviePass' Days Look Limited (bloomberg.com)

Posted by BeauHD on from the burning-cash dept.

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.

1 of 159 comments (clear)

  1. Re:OK, so what is MoviePass? by ledow · · Score: 3, Interesting

    I could sort of it see working, if say all the tickets available were for the quiet-periods, unsold seats, etc., if they were buying up the seats en-masse for a cheap price (saving the theatre having to advertise them, etc. as they're already "sold" as far as they are concerned), or something but... MoviePass don't seem to be doing that.

    The Wiki article literally says that they load the cost of the movie onto a pre-paid debit card, which you use to buy the movie. So you pay $X a month. And they give you $Y each day. Unless X > 30Y, I can't see how they ever could make money. And when it is, nobody would bother with it.

    But just... giving away a movie ticket every day for the price of a movie ticket once a month isn't that appealing a business model, especially once you stick a middleman into it, apps, pre-paid card numbers, etc.

    At what point were they going to morph that business model into something that actually makes profit?