It may become an ex-service.
MoviePass doesn’t seem to be doing to well. At least, according to a Bloomberg report. The report states that the service has been burning through over $21 million a month recently.
Helios & Matheson, inc., the firm which owns MoviePass, reported that it had just $15.5 million in cash at the end of April. Additionally, it has $27.9 million on deposit with merchant processors.
When the service began, it set a 5 million subscriber goal, as the brains behind it considered that the tipping point for profitability. MoviePass’ business model, however, is making it look more and more that it won’t reach that mythical milestone.by most calculations, Moviepass has just enough to keep going for 2, maybe 3 months before dipping into the red.
To sum it up; their business model is really appealing to the end user, but it’s doing the opposite of making them money.
Hope…?
Helios & Matheson CEO Ted Farnsworth is somehow optimistic, though. In an interview, he said:
I’ve always known that it was going to take a lot of money to put into it, to get it to the other side, to get it to 5 million subscribers and break even.
Asked if the company would survive the month of May:
Oh God, yes. May, June, July.
That said, every new subscriber costs them money. Especially as their initial plan only accounted for less in the way of tickets per month per customer. From the report, however, they’re far less certain now than when that interview was taken:
It became clearer on Tuesday that the endeavor is an uphill fight. Helios & Matheson acknowledged in the filing that the MoviePass business model is “highly uncertain.”
“We are unable to estimate the actual funds we will require,” the company said.
It’s almost comical that AMC was so resistant to MoviePass at the get go, now. Even AMC CEO Adam Aron doesn’t think them long for this world:
“There’s nothing wrong with subscription programs — they can be quite positive actually if they’re done rationally and intelligently,” he said on the call. “But they have to be done at a price that is sustainable.”
Source: Gizmodo
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