MoviePass Gives Up Dream of Having Hollywood Support Its Service
MoviePass Will Rely More on Its Own Films as Service Struggles
(Bloomberg) -- MoviePass Inc., the discount film-subscription service rocked by heavy losses, is retooling its strategy again.
The business, owned by Helios & Matheson Analytics Inc., no longer hopes to get significant money from studios and theater chains. In a statement Wednesday, MoviePass said it would rely instead on “self-generated revenues” from its movie-production company, subscriptions and the Moviefone advertising service.
The idea is to get those three parts of the company to work more closely together and build a sustainable business. For instance, there may be special perks for MoviePass members seeing MoviePass Films -- say, the ability to attend advanced screenings.
Previously, MoviePass had said that partnerships with the movie industry would help make the company profitable. It aimed to sell advertising to studios and persuade exhibitors to share their popcorn and ticket revenue. But major cinema chains, such as AMC Entertainment Holdings Inc. and Regal Entertainment Group, balked at the idea. They had no desire to share revenue.
MoviePass’s latest pivot is an admission that its earlier gambit failed.
Delisted Stock
Customers won’t be immediately affected by the change, but they’ve already lost the benefits that previously came with a MoviePass membership. Subscribers used to be able to see a movie every day for $9.95 a month -- an offer that millions of Americans took advantage of. When that approach proved unprofitable, MoviePass reduced how often customers could use the service and limited the movies they could see.
But it’s still struggled to find a winning formula, and competing subscription services from AMC and Cinemark Holdings Inc. enticed customers. Helios & Matheson was delisted from the Nasdaq last month after the stock lost almost all its value. New York state authorities also opened a securities-fraud investigation into whether the company misled investors about its finances.
The shares, which now trade over the counter, climbed 33 percent on Wednesday but are only just above a penny.
To contact the reporters on this story: John J. Edwards III in Geneva at jedwardsiii1@bloomberg.net;Anousha Sakoui in Los Angeles at asakoui@bloomberg.net
To contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net, Rob Golum
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