Things Are Looking Worrisome For MoviePass as Owner Shares Concerning Low Numbers
It’s no surprise that MoviePass’ infamous $9.95 a month movie-a-day plan (which is back, for now) isn’t exactly profitable. After the ticketing company slashed prices last fall, they hit some massive highs (like a crazy boost in subscribers), and some seemingly never-ending lows. And today the company has hit one of its biggest lows yet, with shares in MoviePass’ parent company dropping by more than 30 percent on Tuesday.
Helios & Matheson, which owns the subscription ticketing service, reported on their current financial situation Tuesday, revealing they have been losing about $27.1 million a month since September of last year, when the initial price drop was announced. According to Bloomberg, as of the end of April, the company said they had only $15.5 million in cash and $27.9 million on deposit with investors. Those numbers quickly worried share holders, resulting in a 32 percent drop in shares on Tuesday following the financial reveal. Helios & Matheson even admitted that the MoviePass business model is “highly uncertain” in their filing.
It’s not hard to see why MoviePass continues to struggle: they buy their own tickets from theaters, and allow members to see up to 30 or 31 movies a month for less than the price of a Chipotle burrito. They’ve been buying hundreds of thousands of tickets from AMC at roughly $12 a pop. With many of their users seeing about three movies a month at the cinema chain, that results in a loss of roughly $26 per subscriber. Clearly, that’s not a sustainable model.
In the past few months, MoviePass has made several moves to find ways to reduce its deficit, from changes in subscription plans to no longer allowing card holders to see repeat viewings of the same movie. (I initially complained about that latter, though minor, annoyance, but hey, if it helps the company stay afloat, it’s really not a big of a loss for users.) There may be some hope though; after making changes, the company said they believed it helped reduce their losses by more than 35 percent by the beginning of May, according to Business Insider. So perhaps with some more rigorous tweaks and changes to subscription plans they can keep the company alive. But worst case, if you have a MoviePass, now might be a good time to use it as much as you can before it’s gone.
Gallery – Movie Ticket Stubs You Can Buy on eBay: