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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.
Simple math told us that the business model was faulty. I hope they paid themselves some nice salaries while it lasted.
"MoviePass has been burning through $21.7 million per month."
"MoviePass for the three months... lost $107 million, earning just over $1 million from marketing deals and $47 million from subscriptions."
It doesn't take a genius to work out that 48/3 = 16 and thus you're earning $5.7m less every month than you're actually taking in.
Your business model is literally worse than "Let's burn $5.6m in cash each month on a big bonfire".
We honestly need - as a planet - to put in laws that stop this shite. I know the shareholders are the main ones being burned, but if after a year of operation you can't show overall profit (or at the very least, contracts GUARANTEEING that the profit will be repaid and progress towards fulfilling those contracts), you should just be shut down. And then again each year. Hell, you shouldn't even be allowed to get to things like IPOs etc. at that point.
Yes, I have owned a business. It wasn't large, I don't claim that. But I never made a loss, not once.
I know that with shares, it's a case of "who's left holding the hot potato" and up until that point people can profit from nothing more than hype, but we need a way of stopping people just taking investments, burning through them, without a single profitable year.
Yes, that would mean no Amazon (or at least, an Amazon starting up in a very different way). But it would also mean that there wouldn't be a thousand Amazon wannabes all doing the same and losing people's money, because it's not JUST the shareholders who lose out. Everyone from employees to suppliers to the taxpayer loses out from such things.
I signed up a couple of months ago on a discounted promotion. I received the card in the mail and went to use it the first time. I had already installed the app recently but it said I needed to update to the latest version. Google Play store says my phone is not supported by the new version of MoviePass, despite running Android Oreo. I happen to have an iPhone for work so I try that, nope, unauthorized device, whatever that means. I try their help and get no response for days. I can find no documentation on what unauthorized device means or how to fix the issue. Finally, MoviePass gets back to me and says the app was updated to remove the user tracking (which they assure me they never used anyway) but fail to address how I'm supposed to use the service or why my phone is no longer supported. I attempt to cancel my membership through the app but tapping that particular button is non-responsive. Finally, I just contest the charge with Amex. Thankfully they have robust protections. Fuck MoviePass.
In the US, the most important thing is money. Laws that hinder any sort of business, in any sort of way, are anti-American.
I don't respond to AC's.
The "profit at all costs" mentallity is exactly what's driving the economy towards failure.
Yet the US economy is so dynamic, it's the envy of the world. From startup dreamers to economic immigrants to foreign private companies, the US economy is the place to be.
You seem unable to see the forest because of the trees.
Catalin Braescu
Ofaly.com
"Moviepass - the subscription cinema ticket service -"
It really wouldn't be that hard to include that in the summary.
P.S. most of the time when I have to Google something, I end up going off Slashdot to read about it instead. Especially if it's some US-specific thing.
If you want to provide content, rather than just parrot articles from elsewhere, days later, with not even any moderation, editing, clarification, or summary, then Slashdot really needs to pull its finger out.
I knew it was too good to be true but I milked MoviePass for all it was worth. When I was recovering from surgery, I literally saw a different movie each day at the local Regal Cinemas which participated in MoviePass.
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?
If I got MoviePass I'd feel obligated to go to the theater, which seems like a lot of effort and pressure.
They're hope was that they'd have so many customers they could make deals like you describe.
Wow, sent an e-mail as suggested when clicking on "use classic" banner, and got a fast response that addressed my msg
They talked about tacking on tracking of their subscribers , both before and after the movie, but there was a big pushback. Basically, just like Facebook, the subscribers were intended to eventually be the product, not the customers. Movies wanted to sell analytical data to Hollywood, theater chains, restaurants, etc. They essentially wanted the "data of date night" to see, and eventually sell, what people do and where they go when they go see a movie. So subscribers might see ads for a restaurant before the movie or a bar afterwards to grab a drink. The fact that the primary owner of Moviepass is an analytics company really tells the end game.
The only thing necessary for evil to triumph is for it to be pitted against a slightly greater evil
I don't see the math as simple. That's because none of us can see what their path to monetizing this was/is. Sure it's simple that if you give out tickets for a cost less than their price you lose money and can't make that up "on volume". 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), advertising for pre-movie dinners or parking lots, and perhaps tie-ins to netflix or hulu sunscriptions. Then steadily increasing the price once people get hooked regular movie visits (since you already paid for it).
I kinda doubt this was a viable model. They would need some way to be exclusive with movie theaters to leverage them to share concessions, but they would also need to avoid annoying their customers with limited selections. Perhaps in big cities there is more competition on where you go to see Starwars, not so much is small cities. It's hard to see how they could extract enough to pay for the full price ticket itself.
Still I would assume they do have some plan even if I can't figure out what it is.
Some drink at the fountain of knowledge. Others just gargle.
The CEO. Those poor guys always take a hit when their business goes south.
#DeleteChrome
Including, apparently, their own management.
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
We honestly need - as a planet - to put in laws that stop this shite.
No we do not. You cannot legislate against businesses failing. You have to let people take risks (including big risks) as long as they do not endanger the entire financial system. Very few companies are significant enough to present that kind of risk because they are already very big and successful by that point.
I know the shareholders are the main ones being burned, but if after a year of operation you can't show overall profit
Do you have any idea how many companies you depend on that weren't profitable for far more than a year? Pretty much every drug company startup doesn't show a profit for the better part of a decade. Amazon wasn't profitable for many years as was Facebook. It's not at all unusual for companies to not be profitable for 2-3 years or more.
If the shareholders are ok with burning cash for a larger payout down the road then that is fine. It's their money and if you don't take any risks chances are you aren't going to see a big payday.
Yes, I have owned a business. It wasn't large, I don't claim that. But I never made a loss, not once.
Congratulations but that is very unusual. I've started 5 companies and several of them didn't ultimately make any profit.
Yes, that would mean no Amazon (or at least, an Amazon starting up in a very different way). But it would also mean that there wouldn't be a thousand Amazon wannabes all doing the same and losing people's money, because it's not JUST the shareholders who lose out. Everyone from employees to suppliers to the taxpayer loses out from such things.
That's complete nonsense. Taxpayers do not lose out in any way. The government still taxes income and that gets paid. Most companies are not C-Corps anyway. You cannot force companies to be successful. There is no way to run a robust economy without allowing people to fail.
> Yes, I have owned a business. It wasn't large, I don't claim that. But I never made a loss, not once.
I owned a couple businesses that never "made a loss" (spent a year investing, growing). It wasn't large. In fact they were tiny. Like you, I don't do that anymore. Mostly because with a very small business, I made less money than I make working for someone else, in a larger business. I don't do run a business now because it's silly to deal with the stress, risk, and volatility of owning a business unless you're going to make a lot more money than you would working 9-5.
If I ever own another business full-time, I'm going to try to quickly grow it to be large enough to triple the income I make from salary. That'll mean investing in getting bigger, showing a loss, at first. If I'm not going to own a business that makes me real money, I may as well just work for Northrup Grumman or something.
Look at what the people who founded MoviePass have put into their own bankaccounts as 'salary'... They won't be eating dry bread when the company goes bust... It's all a scam to get them a lot of money..
MoviePass apparently has a $300 million line of credit. While that probably has covenants re: financial levels and performance, it's something they definitely can draw on if they need to.
Movie theaters have little incentive to offer discounts to MoviePass. In fact, theater owners have been raising box-office prices, pushing revenue to near all-time highs, as a way to offset lower attendance.
Is it just me or does that sound like "we don't have enough people coming in, so we'll put prices up so we get even fewer"? I don't remember supply and demand working that way.
"Everybody's naked underneath" -- The Doctor
There is no way to run a robust economy without allowing people to fail.
You have to let corporations fail, and take investors' money with them. But you don't have to let people fail, if you catch my drift. Someone profits; tax 'em enough to pay for the upheaval caused by failure.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
You have to let corporations fail, and take investors' money with them. But you don't have to let people fail, if you catch my drift.
Corporations are run by people. They fail because the people running them fail. You seem to be making a distinction without a difference but perhaps I don't understand your point. Some people are going to fail and that's ok. Failure in business is rarely permanent or fatal. Have some social safety nets (fully funded of course) but very little of value is ever accomplished without some measure of risk.
Someone profits; tax 'em enough to pay for the upheaval caused by failure.
Most businesses aren't zero sum games, at least not all the time. I don't have to fail for someone else to succeed and vice versa.