April 23, 2019
Since MoviePass tweaked its formula, it has lost over 90 percent of its subscribers. Business Insider reported that, based on “internal data,” it found that the movie subscription company now has 225,000 subscribers. In June 2018, MoviePass stated it had signed up over three million subscribers for a plan that then cost $9.95 per month and allowed viewers to see one movie a day. The company pulled back on the plan in August that year, converting subscribers to a new plan permitting three movies per month.
Variety reports that, “when the company switched its subscription plan to three movies per month, it gave subscribers “the option to either cancel or refund their annual subscription or continue on the new three-movies-per-month subscription plan.”
The plunge in subscribers took place despite the fact that MoviePass again released an “unlimited” plan last month. Priced at $14.95 per month, this plan, dubbed Uncapped, lets subscribers see one movie per day, with the caveat that “your movie choices may be restricted due to excessive individual usage which negatively impacts system-wide capacity.” Business Insider reported that the plan resulted in about 13,000 new subscribers.
Since the Uncapped plan debuted in mid-March, MoviePass parent company Helios and Matheson Analytics “said it had cash on hand of about $2.8 million and approximately $13.1 million on deposit with its merchant and fulfillment processors related to subscription revenues.”
The company also raised $6 million in “a new round of financing” from “certain institutional investors,” and said it would use the net proceeds ($5.56 million after placement-agent fees) “to accelerate MoviePass’ product development, fine tune its subscription technology, and increase MoviePass Films’ investment in new films.”
Last month, Helios and Matheson also “restated results for the first nine months of 2018 … saying it had a net loss of $256.4 million (versus $246.9 million previously) and an operating loss of $327.4 million (versus $320 million before),” with revenue for the first three quarters of 2018 as “$198.3 million (compared with $204.9 million).”
The changes were due to “the erroneous recognition of up to approximately $5.9 million of revenue from certain MoviePass subscriptions that were in a suspended state due to changes made to the MoviePass subscription service that had not yet been consented to by the applicable subscribers.” The company also did not factor in $700,000 in revenue from Costco’s sale of subscriptions, which were refunded.
Helios and Matheson is under investigation by the New York Attorney General and the target of a class-action lawsuit “by subscribers claiming the change in the ‘unlimited’ plan was a deceptive ‘bait-and-switch’ tactic.” MoviePass is also suing Sinemia, “alleging patent infringement.”