August 1, 2018
With its penny stock cratering — down 49% in mid-morning (Aug. 1) trading at 25 cents per share — Helios and Matheson Analytics, parent of ticket subscription service MoviePass, is on a last-gasp PR offensive hoping to reassure fleeing investors.
HMNY said it paid back an emergency $6 million loan taken out last week to keep select operations (i.e. paying exhibitors for tickets redeemed by subscribers) running.
The firm issued an Aug. 1 regulatory filing outlining MoviePass’ contributions to studios and the domestic exhibition market — notably that MoviePass subs on average saw six more movies in the past six months than non-subscribers.
“It is incredible to see the power MoviePass has achieved with its sub base in eleven months,” Ted Farnsworth, CEO of HMNY, said in a statement. “MoviePass is one of the top contributors to the film industry without owning a single theater.”
HMNY said MoviePass accounted for 22.7% of opening weekend box office for Lionsgate’s Blindspotting; and 12% of the total box office for Magnolia Pictures’ U.S. Supreme Court documentary, RBG.
Other benchmarks included 16.8% of July 26 previews for Paramount Pictures’ Book Club; 13% of Warner Bros.’ Tag opening weekend domestic box office; and 5% of Universal Pictures’ The First Purge opening weekend. MoviePass said it paid for more than 150,000 tickets subscribers redeemed for First Purge.
The service said 30.8% and 25.4%, respectively, of its subs saw Oceans 8 and Game Night (Warner Bros.), compared to 4.9% of the U.S. moviegoing population. Another 17.7% (2.3%) saw Blockers (Universal Pictures) and 12.8% (1.6%) watched Hereditary (A24).
Indeed, with more than 3 million subscribers, MoviePass has had a major impact on exhibitor foot traffic. But its hemorrhaging money in the process. With subs paying just $9.95 monthly for daily access to a theatrical screening, attendance is up as subs flock to free screenings.
That could change as MoviePass implements a 50% price hike to $14.95 and restricts access to movies releases on 1,000+ screens.
MoviePass CEO Mitch Lowe says the company has learned “a few points” about the film industry over the past 12 months — which apparently didn’t involve overhead costs.
HMNY is spending millions more per month than it recoups in subscriber revenue — a fiscal reality that continues to spook investors — but not HMNY management.
“We are able to create immense value with our film partners by driving traffic to their films and effectively increasing the valuation of their films on the back-end deals they create,” Lowe said. “Not only do we want to provide an amazing deal for our subscribers, but we also want to be a positive force in Hollywood.”
“We are also beginning to see the benefits of our acquisition and integration of Moviefone.com (acquired from Verizon for an equity stake) into the MoviePass family, with new revenue being generated from studios and brands,” added Khalid Itum, VP of business development.