August 2, 2018
The PR blitz to try and save a flawed business model continues.
MoviePass parent Helios and Matheson Analytics Aug. 2 issued a presser that essentially repeated claims from an Aug. 1 presser suggesting the ticket subscription service is responsible for a rise in moviegoers.
HMNY has to say that. Its stock is currently trading around 10 cents per share – down 53% from yesterday – and 99.97% over the past fiscal year, despite a 1-for-250 shares reverse stock-split rolled out eight days ago.
HMNY claims exhibitors want MoviePass to fail so they can continue to raise ticket prices and charge exorbitant concession fees. The same exhibitors MoviePass pays face-value for each ticket consumed by subscribers.
“This is exactly the attitude the taxicab industry took when Uber entered their market,” the company said in a statement.
Therein lies management’s lack of critical thinking. Unlike Uber, Lift, Netflix, Hulu and Amazon Prime Video, among others, that essentially deliver a product more efficiently to the consumer, MoviePass attempts to deliver an existing product – theatrical distribution – to consumers for free.
For $9.95 (now $14.95), MoviePass subs were afforded daily access to a theatrical screening. Millions took up the offer and went to the movies more frequently – not less frequently. Going to the movies is not as physically or mentally demanding as going to the gym. And MoviePass has to pay for the convenience.
And the service simply can’t afford to do so. Thus, when it raised prices, it also restricted access to any major theatrical movie (1,000+ screens) for the first two weeks of release. The rationale being that consumer demand for the title will have subsided.
But do consumers and investors have the patience to pay for a service that has dramatically changed the rules of usage? The answer would appear to be no.