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Topic: Meet the Lone Loser in MoviePass Hitting 1 Million Members
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Frank Cox
Film God
Posts: 2234
From: Melville Saskatchewan Canada
Registered: Apr 2011
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posted 07-05-2018 10:16 PM
MoviePass’s new business plan is to charge you whatever it wants
quote:
MoviePass is rolling out peak pricing, its own version of surge pricing that will charge customers more to see popular movies during what the company considers “high demand” times.
MoviePass is a subscription movie ticket service that typically costs $9.95 a month to see up to one movie in US theaters per day. The company has been hemorrhaging cash to subsidize these monthly subscriptions, which can cost less than a single movie ticket in some US cities. MoviePass parent company Helios and Matheson reported spending $40 million more in cash than it brought in for the month of May, and it expected that gap to increase to $45 million for the month of June.
The company is looking to raise another $1.2 billion by selling stock and debt. But if MoviePass wants to survive, it also needs to start losing less money on its subscribers, and fast.
That’s where peak pricing comes in. MoviePass was vague on the details when it teased peak pricing in late June, and it hardly cleared things up in an email to users today (July 5).
“Peak Pricing goes into effect when there’s high demand for a movie or showtime,” MoviePass wrote in its email. “You may be asked to pay a small additional fee depending on the level of demand.” Movies currently experiencing peak pricing will be marked with a red circle containing a white lightening bolt; movies growing in demand that “could enter Peak Pricing soon” will get a gray version of the icon.
How much will the “small additional fee” be? In June, MoviePass CEO Mitch Lowe said the surcharges would be $2 or more. In the example MoviePass emailed to users today, the extra fee is $3.43. “Note: the actual Peak Pricing surcharge will vary based on showtime and movie title,” MoviePass unhelpfully supplies.
MoviePass’s online support page, updated earlier today, is similarly unhelpful. “Movies that are high in demand for title, date, or time of day will be impacted,” MoviePass advises. Peak pricing “will be based on movie demand so some weekends will have it, and others will not.” MoviePass, in other words, will charge you whatever it wants.
Zach Salk, a spokesman for MoviePass, said in an emailed statement that MoviePass is “still in a testing period” with peak pricing. To start, he said, members could expect surcharges of $2 to $6, depending on the film and showtime. Peak pricing will roll out to all MoviePass members in the next few weeks, except for quarterly and annual members, who won’t see it until their plans renew. MoviePass also plans to let each user waive one peak fee per month.
If past startups are a guide, hidden fees are almost always a bad sign. Many on-demand delivery companies, struggling to make their businesses work, have used opaque markups and “service” fees to try to increase margins. Shortly before meal delivery service Maple went under, it stopped giving out free cookies and added in a delivery fee.
In MoviePass’s case, an added fee of $2 or $3.43 might not sound like much, but for the company it could be significant. After all, those surcharges are 20% and 34%, respectively, of the monthly $9.95 subscription fee. They could go a long way toward helping MoviePass effectively raise prices without officially increasingly its sticker price.
Will people choose to pay? The answer seems likely to be yes. A lot of people might not have that many options for when they can get away for the time needed to see a film. And paying an extra $2 to $4 is still going to be cheaper than paying full price for a movie theater ticket, especially when you’ve already sunk $9.95 into that month’s MoviePass subscription.
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Mike Blakesley
Film God
Posts: 12767
From: Forsyth, Montana
Registered: Jun 99
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posted 07-24-2018 03:21 PM
A couple of articles about MoviePass's latest efforts to pull itself out of the toilet. The more I read about Ted Farnsworth, the more glad I am to be an independent exhibitor and not affiliated with that arrogant &#$!%@.
MoviePass Head Teases Ways It Will “Flip Hollywood On Its Ear Again” After Shareholders Back Revival Plan
by Dade Hayes
July 24, 2018 8:51am
Ted Farnsworth, head of MoviePass parent Helios & Matheson, teased the rollout of a Rotten Tomatoes-like ratings service and other “disruptions” over the next 90 days during a conference keynote this morning in New York.
“You’re going to see a lot of disruption from us in the next 90 days that’s going to flip Hollywood on its ear again,” Farnsworth said during the session kicking off the Media & Entertainment Services Alliance event. He briefly alluded to the ratings guide during the session, but declined to offer specifics on the other “disruptions” in a brief follow-up interview with Deadline.
The title of Farnsworth’s session may have struck some investors as curious: “Disruption in the Movie Business: Monetizing the MoviePass Effect.” Monetization is much on the minds of shareholders these days as the company piles up losses and has warned of needing to raise up to $1.2 billion in new financing in order to survive. At a special meeting yesterday, shareholders voted to approve two measures aimed at staving off a potential de-listing by the Nasdaq as Helios & Matheson stock hovers below a dime a share. Last fall it reached $38 a share amid euphoric optimism over the $10-a-month service.
Asked by one conference attendee about when the company expects to break even, Farnsworth said it could do so with revenue between $150 million and $180 million from now to year-end. (Revenue last quarter was $58.5 million.) While the company recently disclosed losing $45 million in June alone, it blamed the intensity of summer moviegoing.
Customer data — the ultimate coinage MoviePass aims to transact with — got a lot of attention during the keynote session, but it has not yet meaningfully benefited the balance sheet. “It’s a challenge to put a value on it right now,” Farnsworth conceded, though he predicted more of the company’s revenue in the third and fourth quarters will be derived from non-subscription sources. Eighteen different distributors have contracted with MoviePass to use its data in making production and marketing decisions, he said. “The studios have embraced us because we have the data. They are getting that data and they are seeing how to better feed the audience.”
Farnsworth, in a session mostly devoted to audience questions rather than a presentation, said the company’s coming milestone in terms of membership will reverse the widely held skepticism about the company. When it hits its expected target of 5 million subscribers by year-end (it hit 3 million in late spring), “that’s when people are really going to wake up,” he said. “We’ll be controlling a lot of the movies, over 50% of the box office. That’s big-sized studios as well.” As to the shots across the bow that land daily from AMC and major studios, Farnsworth shrugged, “To be honest with you, if I were in their position, I’d have a full-out war against us, too, because somebody is threatening my every day business.”
Shares in MoviePass parent Helios & Matheson Analytics, already under immense pressure in recent weeks, hit a new 52-week low yesterday, touching 8.2 cents a share before closing at 9.78 cents. They are largely unchanged so far today.
At a special meeting held at the company’s WeWork offices in the New York’s Empire State Building, shareholders backed management dramatically boosting the number of outstanding shares to 5 billion from about 500 million. The new shares would offer more flexibility to the company as it shores up investment support.
The other measure receiving a green light from shareholders was a reverse stock split, which management could set at anywhere from 1-to-2 to 1-to-250. A reverse split is commonly used to prop up a faltering share price.
Helios disclosed in June that it had been warned by the Nasdaq that extended periods of trading below $1 would result in the company being de-listed, which would be a serious blow to its ambitions.
Asked by Deadline for his view of the shareholder meeting, Farnsworth said it “gave us what we need” in terms of securing a publicly traded future. “It all went very well.”
Deadline article
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'It is a full blown war going on': The CEO of MoviePass' parent company wants to use its subscribers as an army against traditional theaters (HMNY)
by Graham Rapier
Jul. 24, 2018, 07:36 AM
HMNY, which owns 92% of MoviePass, doubled down on the company's bet against traditional theaters on Monday. "Make no bones about it, it is a full blown war going on," CEO Ted Farnsworth told shareholders at a special meeting.
Investors approved two proposals at the meeting that could help the company avoid being booted from the Nasdaq stock exchange.
MoviePass’ war against traditional movie theaters is still in its infancy, the chief executive of its parent company, Helios & Matheson, told a specially-convened group of roughly 30 shareholders on Monday.
From the 67th floor of New York's iconic Empire State Building, CEO Ted Farnsworth declared to a packed conference room of investors that MoviePass, the subscription service of which his company owns a 92% stake, plans to use its enthusiastic subscriber base as an infantry in its fight against major Hollywood theatre chains.
"Make no bones about it, it is a full blow war going on, especially with AMC," Farnsworth told the room of investors, who were largely optimistic, despite shares plunging more than 99% from their October highs.
"The theaters don't like us because we're too powerful too quick," he said. "We know with all the independent research that's out there, if we ask somebody to go to a Regal instead of an AMC, 50% of the time they'll go to Regal. They realize that at the end of the day we're gaining all this power with the consumer base. That was always the play, having leverage over the theaters."
Still, MoviePass and its owner HMNY have a long way to go before they can declare victory. Last month, the company received notice from Nasdaq that it would be delisted if it fails to maintain a stock price above $1 and a minimum market cap of $50 million, per the stock exchange's requirements.
Shortly after, it called the special meeting with two proposals designed to help its struggling shares.
Stockholders approved both measures at the meeting on Monday. The first allows the company to issue 4.5 billion new shares of stock, increasing the total number of shares outstanding to 5 billion from 500 million. The second gives the company the ability to perform a so-called reverse stock split. Management can now increase the stock's price by consolidating shares by a ratio of between 2-for-1 to 250-for-1, at its discretion. Executives did not say when or by how much they would utilize each of their new options.
Despite the approvals, some investors weren't happy with the company's response to the stock's drastic fall from a high of $38.52 last year.
"As the stock price has plummeted, I’ve been concerned about the lack of communication from the company explaining what’s going on or assuring investors," one shareholder told Farnsworth and other executives. "There’s never been any sort of formal communication to the shareholders explaining what you think is going on, what the problem is with the stock going down so much, and what steps you’re going to take to fight that battle."
Other investors voiced concerns that their holdings would only be diluted further by the potential stock offerings.
"Nobody gets diluted more than I do during all this dilution," Farnsworth, who owns 2.14% of the company, said. "We are obviously in a place where this company has grown so quick so fast that it continues to need money, especially for MoviePass."
Farnsworth also addressed concerns that MoviePass may never become profitable, saying the company is on track to post a profit when it hits 5 million subscribers, though he did not provide an update on current subscriber numbers.
"What people really don't realize, is it's not about making money on the subscribers," he continued, touting investments by MoviePass in movies like Gotti and American Animals, both of which have posted solid box-office numbers since their release.
"It's a fastest-growing paid subscription ever in the history of the internet — period," Farnsworth said. "So you're not going to go through that without headaches."
Business Insider article
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Justin Hamaker
Film God
Posts: 2253
From: Lakeport, CA USA
Registered: Jan 2004
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posted 07-27-2018 11:47 AM
Apparently they ran out of Money Thursday night and had to borrow $5 million.
https://www.businessinsider.com/moviepass-outage-caused-by-company-temporarily-running-out-of-cash-2018-7
quote:
The MoviePass outage was caused by the company temporarily running out of cash, and it borrowed $5 million to turn the service back on
In a Securities and Exchange Commission filing on Friday, the owner of MoviePass, Helios and Matheson Analytics, disclosed that it had borrowed $5 million in cash following a "service interruption" on Thursday because the company was unable to make certain required payments.
In other words: On Thursday it ran out of cash, at least temporarily.
"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," the filing said. "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, Inc. ('MoviePass'), which would cause a MoviePass service interruption. Such a service interruption occurred on July 26, 2018."
On Thursday evening, MoviePass began tweeting about what it said was "an issue that is preventing users from checking-in to movies."
Later, it said it was "still experiencing technical issues with our card-based check-in process
As of Friday morning, many MoviePass subscribers still couldn't use the full functionality of the app.
Helios and Matheson borrowed the cash from Hudson Bay Capital Management, according to the filing. The total demand note was for $6.2 million, "which includes $5.0 million in cash borrowed by the Company from the Holder and $1.2 million of original issue discount," it said.
Earlier this week, Helios and Matheson did a reverse stock split, bumping shares to about $14 from $0.09 on Wednesday. The company was at risk of being delisted from the Nasdaq by mid-December if it continued to trade below $1 with a market cap under $50 million. At the start of trading on Friday, the stock was about $6.
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