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MoviePass Having Outage Issues Because It Couldn't Pay Its Bills (cnet.com)

Posted by msmash on from the well-that's-embarrassing dept.

Popular movie-ticked subscription service MoviePass experienced an outage on Thursday, still ongoing for some, which the company attributed to "technical issues with our card-based check-in process," on its Twitter feed. But its SEC filing Thursday indicated that the problem was really cash flow. From a report: The filing by its parent company, Helios and Matheson Analytics, explained an emergency loan the company had taken out: The $5.0 million cash proceeds received from the Demand Note will be used by the Company to pay the Company's merchant and fulfillment processors. If the Company is unable to make required payments to its merchant and fulfillment processors, the merchant and fulfillment processors may cease processing payments for MoviePass. ("MoviePass"), which would cause a MoviePass service interruption. Such a service interruption occurred on July 26, 2018. Such service interruptions could have a material adverse effect on MoviePass' ability to retain its subscribers.

10 of 100 comments (clear)

  1. I think I have seen this movie before. by sinij · · Score: 5, Funny

    I think I have seen this movie before.

    1. Re:I think I have seen this movie before. by jwhyche · · Score: 5, Insightful

      When you open a all you can eat buffet best to make sure you have enough for everyone to eat.

      -Me Year of the Clown

      --
      I read at +2. If your post doesn't reach that level I will not see or respond to it.
  2. Math is hard by Drunkulus · · Score: 4, Funny

    They charge people 10 bucks a month, then buy those people as many movie tickets as they want. How can this possibly lead to financial problems?

    1. Re:Math is hard by Nidi62 · · Score: 5, Interesting

      They charge people 10 bucks a month, then buy those people as many movie tickets as they want. How can this possibly lead to financial problems?

      They're owned by an analytics company. The goal wasn't to make money on the passes, it was to make money on the data. Where you go/what you do before/after a movie, broken down by age ranges, race, income level, location, all of that could potentially be sold to movie chains, restaurants, etc. MoviePass either underestimated how much money they would burn through until the data selling business became sustainable, or overestimated how quickly that would happen. Either way, no big loss. If the tech sector crashes, this will be why: data isn't worth as much (or as useful) as people think it is.

      --
      The only thing necessary for evil to triumph is for it to be pitted against a slightly greater evil
    2. Re:Math is hard by Schnapple · · Score: 3, Interesting

      I agree that part of their plan was tracking their users, especially since the CEO bragged about it, but then they had to shut down that part of it when people complained, later calling it a glitch or something.

      The other part of it, and I think this is the real key, is that MoviePass got tired of being a small fish in a nonexistent pond and decided to go huge in the hopes of being bought by someone else and having it be their problem. YouTube, for example, was hemorrhaging money because their bandwidth costs were doubling every single month. And then Google bought them and that became Google's problem (which wasn't a problem because Google has no problem getting the bandwidth it wants). I think MoviePass was hoping someone would buy them, either for the data part or to shut them down, and either way the founders cash out and leave.

      I do have to say that the thing I despised about MoviePass was that anyone with half a brain could see either they were up to something or they were going to go out of business fast. This would be like paying a $20/month fee and getting a card that will pay for all the gas your car ever needs. Something doesn't add up here. But whenever you'd tell anyone they'd treat you like you were some asshole who wanted to ruin everything. And reading all these people who experienced surge pricing or who couldn't get their app or card to work or who had to photograph ticket stubs like they were submitting some corporate expense report... I'm glad I never signed up or bothered with it. They're going to be dead by the end of the week at this rate.

      --

      Schnapple

  3. Facebook profits... by b0s0z0ku · · Score: 3, Funny

    Facebook earnings miss, MoviePass failing, Twitter missing targets, looks like the tech chickens are flying home to roost. It's about time the ad-targeting, location-tracking, "tech" bubble goes "phut." Party like it's 2001?

    1. Re:Facebook profits... by Discgolferusa · · Score: 5, Insightful

      Makes me long for the good old days of Pets.com..... Man I miss that sock puppet!

  4. Wow by 93+Escort+Wagon · · Score: 4, Funny

    Glad I was sitting down before I saw this. The shock is overwhelming - news like this coming completely out of the blue.

    If MoviePass can fail... how can I have confidence in *anything*?

    --
    #DeleteChrome
  5. Not a long term loan by uncqual · · Score: 4, Informative

    Per Bloomberg, the the terms of the loan are pretty aggressive.

    The lender can demand more than $3M be repaid on August 1 and the remainder on August 5. Also, MoviePass has a planned stock sale and proceeds from that must be used to repay the loan. If MoviePass is 48 hours late in paying, the debt will increase to 130%. If they pay late, they will pay a 15% annualized late fee as well.

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    Why is there an "insightful" mod and why isn't it "-1"? If I wanted insight, I wouldn't be reading /.
  6. Pivot! by edi_guy · · Score: 4, Funny

    Ok team, new plan. All you can watch television for one monthly rate.