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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.
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Oh FFS.
The fix here isn't MORE GOVERMENT RULES when everyone is already committing three felonies per day.
Repeat after me: The government is NOT going to save you or make your life better. That's NOT ITS JOB.
GROW UP, GET YOUR HEAD OUT OF YOUR ASS, AND STOP EXPECTING SOMEONE ELSE TO MAKE YOUR LIFE BETTER!
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.
Why? Seriously, why does the government need to step in to stop stupid investors from being separated from their money? How does this hurt society overall? Fraud is already illegal. So unless someone is being lied to about these companies, I don't see why the rest of us should care.
"What the American public doesn't know is what makes them the American public." -Ray Zalinsky (Tommy Boy)
I can't answer for the other AC, but "protecting people from stupid investments" isn't very high on my list. I don't think it's even possible without a massive new bureaucracy similar to the FDA in scale. At that point, the cost of getting and maintaining business plan approval would be onerous, and I don't even know how you would punish companies that don't live up to their expectations... the market already takes care of this nicely. In this case, MoviePass and their investors will lose everything - isn't that punishment enough? Why prevent them from raising money so long as all the numbers are right there for you to add up for yourself? It would be different if there was a lack of transparency.
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
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
Perhaps you could list a few of these felonies that 'everyone' is committing 'every day'....
When the, "Why You Never Talk to The Police" video was released, there were over 50,000 Federal laws on the books. There are many more than that, because somewhere around 50,000 is where they stopped counting. According to that same video, nobody knows exactly how many Federal laws there are. And that's not even counting State and local laws.
So no, nobody should be stupid enough to believe that they are committing three felonies every day. That number is too low.
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.
People don't know the exact number of federal laws not because there are so many that they can't be counted, but because of the way American laws are written. They're not all (a) "It is violation of the vehicle code to exceed posted speed limits." Many of them are (b) "It is a violation of the vehicle code to exceed posted speed limits, pass unsafely, and drive blind-folded except under the follow 18 circumstances."
Does (b) count as one law or many?
Additionally there is a massive amount of law that is specific to standards ("All automobile headlights must illuminate the road at least X feet ahead of the driver...") or give permissions for a single action to occur ("For the fiscal year 2018-2019, webservers will not be eligible for depreciation.").
It's all very complex simply because life is complex and people would prefer to make it easier for themselves by screwing people over. So, in lieu of having massively atrocious fear campaigns of bloody punishment, every harmful action is made illegal and then comes with its own designated punishment.
Not to mention that many laws are created to modify or repeal other sections of the law. The government might want to amend the list of circumstances for blindfolded driving. It can be recursive in nature.
For good or bad, laws are complex, and need to be evaluated holistically, rather than on a per item basis. It might be more helpful to think of laws like the genome for an organism. One gene alone doesn't work, its the interaction between them, turning on and off in sequence that creates life. Speeding is illegal, but what if I am trying to rescue a basket full of kittens? Instead of trying to codify everything, we let lawyers, judges and juries sort out the circumstances, and deconflict the letter of the law.
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