|
|
 
|
|
Author
|
Topic: Meet the Lone Loser in MoviePass Hitting 1 Million Members
|
|
|
Mike Blakesley
Film God
Posts: 12767
From: Forsyth, Montana
Registered: Jun 99
|
posted 08-07-2018 03:37 PM
So, avid moviegoers, stay away, dammit! Make room for those occasional moviegoers.
Mitch Lowe still doesn't get it, as shown in this excerpt from the article:
quote: Mitch Lowe
"We've learned that going to the exhibitors and looking for a discount is not the right approach, because that discount comes out of the studio share and then we expect the studios to pay us to promote the film and it's like double dipping."
No it doesn't come out of the studio share, you idiot -- it comes out of the theater's profits, which are meager on the tickets to start with! That's why nobody wants to work with you.
Anyway, here's the whole article (with bullet points).
MoviePass' CEO says he will focus on the 'occasional moviegoer' and has a new strategy for working with theaters
- MoviePass CEO Mitch Lowe told Business Insider the mission of the company now is to focus on the "occasional moviegoer."
- He said 40% of cost of goods sold were from the 15% of subscribers who used MoviePass four or more times a month.
- On Monday MoviePass announced it was keeping its monthly subscription price at $9.95 — but limiting the number of movies you can see to three a month.
- Lowe said the company would also attempt to make deals with movie theaters and studios to get a more favorable marketing fee to promote movies.
- MoviePass has been trying to get discounted bulk-ticketing prices but has not been successful.
MoviePass has a new mission: "Reenergize the occasional moviegoer."
That's how the company's CEO Mitch Lowe described it to Business Insider on Monday after announcing that his company was keeping the price at $9.95 a month (and nixing surge pricing and ticket verification), but capping subscribers at three movies a month , beginning August 15.
The app gained millions of new subscribers beginning in August 2017 when it changed its monthly subscription price to $10 a month (to see one movie per day). But what MoviePass didn't realize was a small core group of its users would really take their viewing to the upper limits of the service, Lowe said.
A major reason MoviePass has been burning through an estimated $45 million a month is that it has to pay movie theaters the full ticket price for most of the millions of tickets its subscribers order.
"A small amount of our subscribers, that 15% that would go to four or more [per month], go to a lot of movies. A lot!" Lowe said. "It's almost half of our cost of goods, like 40% of our cost of goods are used by that 15%."
These subscribers went to everything from the biggest movies of the year like "Black Panther" and "Avengers: Infinity War" to hit indies like "Hereditary" and the documentary "Three Identical Strangers." Lowe said, initially the thought was that putting a surge price on the popular films would slow things down, however people were paying it.
Then MoviePass got more dramatic and announced the monthly plan would go up to $14.95 and the big Hollywood releases would no longer be available on the app. But that didn't work either.
"The e-ticketing theaters, which haven't been affected in this whole thing, have gone up almost 75% over the last couple of weeks," Lowe said. These e-ticketing theaters give MoviePass a discount in exchange for promotion in the app.
So to attract just the casual MoviePass users — who spend $40 to $50 a year at the movies — which Lowe said represent 85% of its subscribers, the monthly plan will stay at the attractive $9.95 monthly offer. (If you want to go to the movies more than three times a month, MoviePass will offer discounts of $2 to $5 a ticket if you book through the MoviePass app.)
Lowe said he was confident that would decrease the burn substantially and get Wall Street back on board.
"I have had billion-dollar VCs tell me, 'If you would only put a cap on your costs we would invest and be right behind you,'" Lowe said. "I never did it because my investors kept telling me, 'We're behind you, we know it's going to take a lot of time,' and then suddenly they stopped saying that."
The stock of MoviePass' parent company, Helios and Matheson (HMNY), plunged to 7 cents last Friday, an all-time low . This came after the company did a 1-for-250 reverse stock split to pull it out of danger of getting delisted from the Nasdaq starting mid-December. It didn't work. (The stock was trading around 8 cents on Monday).
With the pivot to focus on the occasional moviegoer, Lowe admitted it would be more of a challenge to get to his goal of 5 million subscribers by the end of the year. But it may be more important to build better relationships within the industry than focus on subscription numbers.
For some time, MoviePass has tried to make bulk price movie-ticket deals with theaters so it didn't have to pay full ticket price on the millions its subscribers order on the app. Lowe said the progress has been happening "really slowly" to get exhibitors on board. So Lowe said MoviePass now has a new plan.
"We've learned that going to the exhibitors and looking for a discount is not the right approach, because that discount comes out of the studio share and then we expect the studios to pay us to promote the film and it's like double dipping, so we have changed our model," Lowe said. "We are just about to roll out to exhibitors that we'll continue to pay full price, but we want to negotiate with them a fair marketing fee."
So MoviePass wants to get a better marketing fee from exhibitors and studios on their movies it highlights on its app, social media, and other platforms. MoviePass boasts that it's responsible for 6% of the 2018 box office (which is up 8% from last year ) and believes with the inroads it has made on the marketing side with movie theaters and studios, that it can land a good deal, versus discounted tickets. (According to Helios and Matheson's most recent quarterly report, marketing and promotion made up $1.4 million of MoviePass' revenue in the first three months of 2018).
"I went in with a pay-for-performance approach to both the exhibitors and the studios, and I found it didn't work within the system and it caused all kinds of challenges," Lowe said. "So we think we now have a way to do this that fits in with how business is done."
Despite all the challenges MoviePass has faced, Lowe said he was optimistic, adding that new services like bring-a-friend, which allows MoviePass subscribers to pay for a non-subscriber ticket, and an option to order a ticket to a non-2D movie (like IMAX or Real 3D), would be available in the next month.
"We've got a couple of tricks up our sleeve," Lowe said.
Business Insider article
| IP: Logged
|
|
Harold Hallikainen
Jedi Master Film Handler
Posts: 906
From: Denver, CO, USA
Registered: Aug 2009
|
posted 08-07-2018 03:55 PM
The tale continues! I think the subscriptions or discount programs offered by individual circuits have quite a bit more benefit. I call it the "Costco effect." You've paid your membership fee, so that's where you're going to shop so you get your money's worth. With Movie Pass working with every theater, there is no advantage gained by an individual exhibitor (other than, maybe, being listed at the top of the application), so exhibitors are unlikely to pay anything. With my Denver Film Society membership, I get a ticket discount there, so I'm more likely to see a movie there than elsewhere. On the studio side, they are the only ones with that particular movie, so they don't need to offer a discount to get people away from the competition. Instead, they need to get the general public interested in the movie. They do that advertising to the general public (or targeting audiences they think would be interested, which trailers do a great job of doing).
So... the tale continues...
| IP: Logged
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jack Ondracek
Film God
Posts: 2348
From: Port Orchard, WA, USA
Registered: Oct 2002
|
posted 08-10-2018 11:47 PM
So... throughout this epic saga, the people who you hear almost nothing from Lowe and Farnsworth about are... their stockholders.
While Lowe is declaring he's "finally" figured out whos revenue stream he's trying to barge in on, and Farnsworth is insisting that "everything's fine" while their stock is, once again, below a nickel, there's this...
https://www.marketwatch.com/press-release/gainey-mckenna-egleston-announces-a-class-action-lawsuit-has-been-filed-against-helios-and-matheson-analytics-inc-hmny-2018-08-10
-------------------------------------
Gainey McKenna & Egleston announces that a class action lawsuit has been filed against Helios and Matheson Analytics Inc. ("Helios and Matheson" or the "Company") HMNY, -19.87% in the United States District Court for the Southern District of New York on behalf of a class consisting of investors who purchased or otherwise acquired Helios and Matheson securities on the open market from August 15, 2017 and July 26, 2018, inclusive (the "Class Period"), seeking to recover compensable damages caused by Defendants' alleged violations of the Securities Exchange Act of 1934.
The Complaint alleges that the Company made false and misleading statements to the market in connection with the Company's promotion of the future profitability and high valuation of MoviePass. The Complaint alleges that the MoviePass business model could not be sustained and that the Company would run out of capital. Therefore, the Complaint alleges that , the Company's public statements about its business prospects and operations were materially false and misleading during the class period. When the market learned the truth about Helios and Matheson, the price of the Company's stock dropped, causing investors to suffer damages.
The Complaint also alleges that throughout the Class Period, the Company made other materially false and misleading statements regarding the Company's business, operational and compliance policies. Specifically, the Complaint alleges that the Company made false and/or misleading statements and/or failed to disclose that: (1) the Company's sales claims and the supposed underlying proprietary techniques lacked a verifiable basis and (2) as a result, the Company's public statements were materially false and misleading at all relevant times.
.... Please visit our website at http://www.gme-law.com for more information about the firm.
| IP: Logged
|
|
|
|
|
|
Harold Hallikainen
Jedi Master Film Handler
Posts: 906
From: Denver, CO, USA
Registered: Aug 2009
|
posted 08-11-2018 02:27 PM
On high prices, as long as there is not collusion to set prices, competition between exhibitors should keep pricing correct. If exhibitors were all equal (at least in the mind of the consumer) in quality, features, location, etc., price would be the determining factor as to which theater the consumer went to (like a consumer will choose one gas station over the one across the street to save a penny per gallon). But, they are not all the same. Exhibitors are trying to compete on things other than price (recliners, etc.). It would be interesting to get an idea of how exhibitors set their prices. Higher CAN result in higher profits, but if attendance falls, lower profits. We see time of day pricing through matinee discounts. How much price experimentation is there to determine the optimum (most profitable) price? And, of course, exhibitors are not just competing with other exhibitors. They are competing with Netflix, sporting events, and whatever other entertainment people are willing to spend money on.
On the class action law suits, it was mentioned that the lead attorneys get a larger portion of the pie. I suspect it's a pretty small pie to share.
It's amazing how easily investors are misled. I think everyone here saw that it was extremely difficult to impossible to make a profit on MoviePass. How did all these "smart people" put so many millions into this?
Also, as mentioned previously by another poster, investors are relying on advice from advisors who do not have a fiduciary responsibility to the investor. You get what you pay for! If you want someone to act in your interest, PAY THEM to do that, and make sure no one else is paying them to act against your interest. We saw a similar thing in the 2008 financial crisis where those selling the securities would hire ratings companies to rate the value of the securities. The investors relied on these ratings, but the ratings companies had no responsibility to the investor.
Harold
| IP: Logged
|
|
|
Powered by Infopop Corporation
UBB.classicTM
6.3.1.2
The Film-Tech Forums are designed for various members related to the cinema industry to express their opinions, viewpoints and testimonials on various products, services and events based upon speculation, personal knowledge and factual information through use, therefore all views represented here allow no liability upon the publishers of this web site and the owners of said views assume no liability for any ill will resulting from these postings. The posts made here are for educational as well as entertainment purposes and as such anyone viewing this portion of the website must accept these views as statements of the author of that opinion
and agrees to release the authors from any and all liability.
|
Home
![[Confused]](confused.gif)
![[Wink]](wink.gif)
Printer-friendly view of this topic