In technology companies, one of the most tossed-around terms is an industry disruptor. It’s used frequently, but nearly always just marketing fluff. In the case of MoviePass, they most certainly did disrupt the way millions of people went to the movies. It was a simple enough idea: pay a single monthly fee and you can watch a movie a day for free.
Considering that for many theaters a normal ticket price exceeded the monthly subscription charge, many were asking “how are they going to make money?” CEO Mitch Lowe was defiant, saying that they would forge deals with theater chains to share in concessions revenue, sell user viewership data, and “other strategic offerings” to raise the month-to-month capital.
It seems that curtain time may now be imminent, and it’s seeming less and less likely that anyone will step in to stem the bleeding. Now in the latest events: Lowe has called his employees together for an all-hands meeting to give more gloomy news.
Business Insider today wrote:
During an all-hands meeting on Monday, MoviePass Lowe said their app would not make Christopher Robin and The Meg — the two major releases hitting theaters in the next two weeks — available to its subscribers, and he implied that the practice of not offering tickets to major movies would continue for the foreseeable future.
So there we go. After significant snafus, they’re going to try to fix things — by cutting off their members’ ability to see the key films they would most likely want to see.
It’s been only a week since the stock price for Helios & Matheson (the parent company of MoviePass) plummeted to $0.08 (yes, eight cents), causing the board to do a 250 to 1 reverse split. That meant that if someone started with 1,000 shares of stock, after the reverse split they held only four shares. After, the adjustment shares opened at $21.25 but have since dropped back under a dollar to $0.80. By NASDAQ rules, if the share price remains under $1 for more than 30 days, the company is subject to being delisted.
Then the company was briefly unable to fulfill ticket payments last Friday while an emergency $5 million loan was secured to get things going again. The latest big release, Mission: Impossible – Fallout, continues to be largely unavailable in most major markets. In short, the company needs to quickly figure out how to balance not letting too many users run to see the latest movies at once (bleeding their nearly empty account dry) and cutting off access to films, causing users to cancel their accounts.
The reason that theater companies have been anti-MoviePass isn’t because it was thought up by someone else. It’s because they feared that if theater patrons became accustomed to all-you-can-eat subscriptions, when MoviePass finally failed, they wouldn’t be willing to go back to the per-film pricing, causing a large dropoff in attendance. The chains are already aware that between modern home theater systems and narrow release windows, users are more often choosing to wait until films hit Netflix or Blu-ray.
In alternate timelines, at this point one or more of the theater conglomerates might have stepped in to pick up at bargain pricing the remnants of the company and its memberships. However, that’s unlikely to happen this time around. Neither Lowe nor Helios CEO, Ted Farnsworth have made any allies around the industry. It was back in January where MoviePass decided to play hardball and intentionally cost AMC $2 million a week by disabling ticket sales from the MoviePass mobile app to 10 New York-based AMC theaters. This had the effect of driving attendees to other theaters or dissuading them from going at all. At the time MoviePass was demanding a $3 cut on AMC tickets that it covers, plus 20% of concessions.
During this time Farnsworth struck a particularly insolent tone, saying in reports that AMC had been ignoring MoviePass for a while and he was considering sending a letter to the AMC board. The large national theater exhibitors don’t like an outside company coming in and dictating the price of movie tickets to the public, and so they held their ground.
Now with MoviePass apparently circling the drain and AMC, Cinemark, and Alamo Drafthouse all experimenting with their own subscription services, it seems those little red debit cards will soon be just a souvenir.
This article was revisited and edited for grammatical/syntactic errors on July 31, 2018 at 10:23 a.m.
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