MoviePass Founder Seeks to Create a ‘Virtual Hollywood’ With New Media Company

If Hollywood loves a comeback, Ted Farnsworth, former chairman of the corporate parent of the shuttered MoviePass theater subscription service, would appear to be first in line for the latest sequel.

Farnsworth’s Zash Global Media and Entertainment Corp., a content distribution company, Jan. 21 announced the signing of a merger agreement with Vinco Ventures to create “exciting acceleration” and growth in live-streaming content, video-sharing, distribution and production.

Ted Farnsworth

Farnsworth, together with media investor Jaeson Ma, an early investor in TikTok and the Triller video-sharing social platform, and social monetization executive Vincent Butta, aim to build a “virtual Hollywood,” providing content partners and producers with “state-of-the art” analytics and distribution technology.

Customized analytics is what Farnsworth and former MoviePass CEO Mitch Lowe sought to sell movie exhibitors when launching the $9.99 monthly all-you-can-watch theatrical pass. The too-good-to-be-true concept quickly gained 3 million subscribers and Wall Street backers before the reality of reimbursing theaters face value for tickets used by subscribers was a fiscal black hole. The service shuttered in 2019 after running out of money in 2018.

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But that was so yesterday. Brian McFadden, chief strategy officer, said Triller generated more than two billion views over a 30-day period on Facebook, adding the network has more than 350 million followers. The Triller app enables users to edit and synchronize videos to background tracks using artificial intelligence. TikTok recently sued Triller in a patent dispute.

“We are poised to revolutionize the next generation of video distribution,” McFadden said in a statement without elaborating.

Farnsworth said Zash was formed to “drastically reimagine” today’s global entertainment marketplace by combining “first-class talent,” resources and technology in this “dramatically changing” environment.

“We utilize data, meta data and the IoT [Internet of Things] to meet the ever-changing engagement and content demands of content developers, consumers and creators,” added Butta.

Ma said social interactive video platforms are taking over the minds of Gen Z and Y consumers. Live events are being transformed into virtual and augmented realities. Building direct-to-consumer brands through the influencer economy is the future of the e-commerce-driven marketplace, according to Ma.

“We now live in a digital world and there has yet to be a media and entertainment force to capture this disruption on all levels,” he said, apparently unaware of a company called Netflix, which ended 2020 with $30 billion in revenue, 203 million subscribers worldwide and a content production pipeline that is re-defining Hollywood.

Regardless, McFadden believes the combined companies and management will expedite scale of production and creative services to meet “growing content creation and distribution needs.”

“We are excited to merge with Zash in our ever-evolving pursuit to ‘be big,’” he said.

The news sent Vinco Ventures skyrocketing nearly 200% ($3) to close at $4.56 per share.

Netflix, Redbox Veteran Mitch Lowe Says Discovery Is Biggest Challenge in New Entertainment Landscape

Discovery is the biggest challenge facing the new entertainment landscape of endless choice, said Netflix co-founding executive and former Redbox president Mitch Lowe.

“I think if anybody can figure out how to solve this problem for big segments of the population, it’s a real big opportunity in the business, and no one’s doing it,” he said during a keynote presentation for the OTT.X@Pipeline 2020 online conference Dec. 9.

“On one side, people say they want all the choices in the world, but on the other they go, ‘But I don’t want to spend time wading through them,’” he noted. “[At kiosk rental company Redbox] we found that when we created that light box, that has I think 66 box arts on it, that was the maximum people could go through. Anything more and anything less was counterproductive and in fact constrained consumption.”

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He also pointed out limitations of computer algorithms in helping consumers find what they want to watch, noting one algorithm he remembered that recommended that folks who watched Willy Wonka would like to watch The Shining.

Discovery is key because “people don’t want to work hard to find something good, but they also don’t want to spend their time watching something that they end up turning off,” he said.

Recalling his early days as a video store chain owner and president of OTT.X’s predecessor the Video Software Dealers Association, Lowe said his experience talking with customers informed his later, groundbreaking career path.

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“What I learned one on one with customers was how they think about entertainment,” he said.

In fact, he noted, he met Netflix founder Marc Randolph at a video convention.

“If you look at my career at Netflix, I was really the video guy,” he said. “I was the guy who knew the entertainment industry.”

In a callout to the video store industry veterans at the online conference, he said, “It’s really wonderful to be back with so many familiar people. I think this is kind of a little bit of a homecoming.”

Asked about Warner’s recent decision to send new releases to its streaming service HBO Max concurrent with theatrical release, Lowe bemoaned the potential damage to the theater business.

“I absolutely love the experience in movie theaters,” said Lowe, who was also at one time CEO of MoviePass, a now-defunct theater ticket subscription service.

He noted the importance of a shared experience in theaters, where the audience can jump in tandem at a horror film or laugh together at a comedy.

He touted the subscription model for theaters, which some chains such as AMC have instituted.

“In the end, the entity or the business that has that one to one relationship with the consumer is the real winner,” he said, and that’s “why companies like AMC did not like companies like MoviePass getting between them and their customer.”

Moviefone Sold in MoviePass Bankruptcy Proceedings

Moviefone, the iconic voice of the now-discontinued telephone service marketing theatrical releases and ticket sales, has been sold for $1 million in bankruptcy proceedings involving Helios and Matheson Analytics, which also owned the defunct MoviePass subscription ticket service.

Founded in 1989, Moviefone offered callers movie, ticket and screening information nationwide. The service was acquired for $388 million in 1999 by AOL, which in 2017 merged with Yahoo to become Oath. Helios and Matheson bought the brand in 2018 for $8 million from Oath in a largely stock-based transaction. (Oath in 2019 was renamed Verizon Media.)

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In the Internet era, Moviefone morphed into an online service through an agreement in 2001 with MovieTickets.com. The service in 2012 partnered with Fandango, which is owned by NBCUniversal.

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RIP: MoviePass Owner Files for Bankruptcy

Helios and Matheson Analytics, owner of the shuttered Movie Pass theatrical ticket subscription service, among other businesses, has filed for Chapter 7 bankruptcy protection.

Under a Chapter 7 bankruptcy filing, the debtor’s assets are sold off to pay the lenders (creditors) whereas in Chapter 11, the debtor negotiates with creditors to alter the terms of the loan without having to liquidate assets.

Per a regulatory filing, New York-based HMNY said that after “considering” strategic alternatives, the company and its subsidiaries MoviePass and Zone Technologies, each filed a voluntary petition for relief under the provisions of Chapter 7 of Title 11 of the United States Code in the United States Bankruptcy Court for the Southern District of New York on Jan. 28, 2020.

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HMNY said its remaining board members — Prathap Singh, Gavriel Ralbag, Muralikrishna Gadiyaram and Joseph Fried — had tendered their resignations, leaving the former high-flying entertainment disruptor without a board.

In addition, Parthasarathy Krishnan, interim CEO, and interim CFO Robert Damon resigned their positions.

The bankruptcy court will assign a trustee to HMNY to determine distribution of the company’s assets, including MoviePass Ventures, a subsidiary founded to co-acquire films with film distributors.

Titles included American Animals, John Travolta’s Gotti and The Row with Lionsgate. The company also co-produced a series of low-budget direct-to-videos with Bruce Willis, including 10 Minutes Gone.

HMNY acquired upstart MoviePass in 2016, and together with former Netflix/Redbox executive Mitch Lowe, set about upending the theatrical business with a $10 monthly, daily access to any exhibitor’s screening.

The venture proved a hit with consumers as more than 3 million joined MoviePass, but a fiscal failure as the platform was on the hook paying theaters face value for every ticket used by subscribers.

The service lost hundreds of millions of dollars, and despite venturing into movie productions, distribution and a reverse stock transaction, could not elevate HMNY’s stock value above a penny.

MoviePass shut down four months ago with both Lowe and HMNY boss Ted Farnsworth exiting the company.

 

Ex-Helios and Matheson Analytics CEO Looking to Buy MoviePass Assets

Former Helios and Matheson Analytics CEO Ted Farnsworth just doesn’t know when to quit.

A day after stepping down as CEO of the parent to shuttered MoviePass ticket subscription service and related businesses (MoviePass Films, Moviefone), Farnsworth reportedly is cobbling together a group of investors to buy select MoviePass assets.

According to The Wall Street Journal, which cited HMNY internal documents, including Farnsworth’s resignation letter, the executive eyes continuing MoviePass Films, which generated several original releases starring Bruce Willis.

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Whether Farnsworth — a longtime MoviePass cheerleader along with the service’s CEO Mitch Lowe — would bring back MoviePass is unclear.

Ted Farnsworth

Launched in 2017, the $9.95 monthly ticket service offered subscribers daily access to a non-3D theatrical screening. At its peak, MoviePass had more than 3 million subscribers eager to take advantage of a business model that hemorrhaged money.

The service sought to make deals with exhibitors who were paid face value by MoviePass for every ticket used by subscribers in exchange for user data.

Chains such as AMC Theatres, Regal Cinemas and others wouldn’t bite, opting instead to launch competing ticket services.

Despite several attempts to re-invent the MoviePass business model, investors pulled the plug on HMNY shares — especially after two reverse-stock option split attempts.

Whether investors would line up behind Farnsworth for another edition of MoviePass remains to be seen. HMNY could also sell the assets to a third party.

MoviePass to Shut Down Sept. 14

Subscription theatrical movie service MoviePass will shut down Sept. 14 at 8 a.m. (EST), according to a letter from CEO Mitch Lowe on the site.

“Over the past several months, MoviePass worked hard to relaunch its groundbreaking subscription service and recapitalize the company,” he wrote. “While we were able to relaunch the service for some of our subscribers with an improved technology platform, our efforts to recapitalize the company have not been successful to date.”

He wrote that subscriptions will be refunded.

“MoviePass will be providing subscribers with appropriate refunds for their period of service already paid for,” he wrote. “Subscribers will not need to request a refund or contact MoviePass customer service to receive a refund. Subscribers will not be charged during the service interruption.”

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The future of the service remains uncertain, according to the letter.

“At this point, we are unable to predict if or when the MoviePass service will continue,” Lowe wrote.

Owned and operated by Helios Matheson Analytics, the service at its peak generated more than 3 million subscribers paying $9.95 for daily access to theatrical releases.

Regal Cinemas Launches Subscription Ticket Service

As expected, Regal Cinemas July 28 unveiled a branded subscription plan — Regal Unlimited — exclusively available as a mobile app and starting at $18 a month.

Consumers can choose from three different plans based on theater location with the aforementioned Regal Unlimited plan available at more than 200 theaters.

The upgraded Regal Unlimited Plus plan ($21) is valid at more than 400 theaters, while the Regal Unlimited All Access pass ($23.50 per month) is good nationwide.

While the pricing is comparable to AMC Theatres Stubs A-List plans ($21.95 to $23.95), Regal’s service does not limit subs to three screenings weekly as does AMC.

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The new service comes as ticket subscription pioneer MoviePass has suspended service indefinitely as it grapples with a business model that is not aligned with an exhibitor and thus hemorrhages money.

Regal subscribers can watch as many standard format movies as they want. There are no blackout dates, and advance tickets can be acquired as soon as they go on sale.

For special formats, subs can upgrade their ticket to VIP, ScreenX, 4DX, Imax, RPX and 3D, by paying the usual standard upcharge.

Moviegoers who sign up for Regal Unlimited will be automatically enrolled in the Regal Crown Club program. Through the Regal Crown Club, members accumulate credits at the box office and concession stand to earn rewards, including free popcorn, soft drinks, movies and merchandise.

“This is the [subscription] program moviegoers have been craving,” Ken Thewes, chief marketing officer at Regal, said in a statement.

Regal Unlimited subs get a 10% concessions discount on all food and non-alcoholic beverages — as well as a free large popcorn and large drink on their birthday.

Along with all the Crown Club benefits, subs earn credits for every dollar spent, including the opportunity to attend advance screenings.

“Regal Unlimited is the best value option for movie fans,” said Kelly Hawkins, VP of loyalty at Regal.

MoviePass Suspends Service Indefinitely

Fiscally challenged MoviePass suspended service midday July 4 for an indefinite period of time to revamp its app.

The eight-year-old movie ticket subscription pioneer, in an email to subscribers, said the stoppage was in order to “provide the level of service you deserve.”

“We have listened and we understand the frustrations of our subscribers,” Mitch Lowe, CEO of MoviePass, said in the July 3 email. “We plan to make this improvement by utilizing an enhanced technology platform, which is in the final stages of completion.”

During the shutdown, MoviePass will not take on new subscribers. Existing subs will be credited for the number of affected days once the service continues.

Owned and operated by Helios Matheson Analytics, the service at its peak generated more than 3 million subscribers paying $9.95 for daily access to theatrical releases.

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The business model quickly proved unsustainable as MoviePass paid exhibitors face value for each ticket consumed by subscribers. Unable to reduce ticket fees and market subscriber data to exhibitors, the service hemorrhaged money — losing $329.3 million, on revenue of $232.3 million in 2018.

In March Helios said it received nearly $6 million in funding from an unidentified investor.

“There’s never a good time to have to do this,” Lowe said. “But to complete the improved version of our app, one that we believe will provide a much better experience for our subscribers, it has to be done.”

Regardless, movie subscription service appears here to stay as exhibitors grapple with burgeoning over-the-top video competitors.

AMC Stubs A-List service has more than 800,000 subs, while rival Regal Cinemas is working on its own branded service. Atom Tickets and Cinemark have separate subscription plans in place.

 

 

AMC Theatres Subscription Ticket Service Tops 800K Members

AMC Theatres May 20 announced its branded Stubs A-List subscription ticket program now tops 800,000 moviegoers — an increase of 200,000 members in 2019.  The number make the service the No. 1 service in North America, and well ahead of its one-year target of 500,000 members by June 26.

“We believe we’ve cracked the code to make this concept successful for AMC, our shareholders, our studio partners and most importantly, our guests,” CEO Adam Aron said in a statement.

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The milestone comes after the world’s largest theatrical exhibitor reported a net loss of $130.2 million compared to profit of $17.7 million in its most-recent fiscal period. Revenue dropped 13.2% to $1.2 billion.

Indeed, AMC contends the service contributing to the bottom line as A-List members bring friends and family with them to the movies.

Launched in 2018, $19.95 Stubs A-List affords subscribers up to three movies per week, in every available AMC showtime and format, including “Imax at AMC,” “Dolby Cinema at AMC,” RealD 3D and “Prime at AMC.”

Stubs A-List subs have the same privileges as AMC Stubs Premiere members, including free upgrades on popcorn and soda, free refills on large popcorn, express service at the box office and concession stand, no online ticketing fees and 100 points for every $1 spent on the monthly Stubs A-List fee, tickets purchased for friends and family, and food & beverage spending at AMC.

AMC Stubs Premiere and A-List uers receive a $5 reward for every 5,000 points earned, which translates to a 10% credit toward future AMC purchases.

 

AMC Theatres Q1 Loss Skyrockets, Revenue Falls

Marvel Studios’ Avengers: Endgame can’t come fast enough for AMC Theatres.

The world’s largest theatrical exhibitor, May 9 reported a first-quarter (ended March 31) net loss of $130.2 million compared to profit of $17.7 million in the previous-year period. Revenue dropped 13.2% to $1.2 billion from $1.38 billion last year.

Total attendance fell 12.2% to 79.8 million from nearly 91 million. In the U.S., attendance dropped 11.1% to 54.9 million from 61.8 million. Foreign attendance dropped 14.5% to 24.8 million from 29 million.

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In the quarter, AMC owned, operated, or had interests in 636 theatres in the U.S. and 365 theatres internationally.

The chain attributed the metrics declines due to a weak box office and comparisons with the previous-year quarter’s release of Black Panther, which was the second-highest grossing Q1 movie in history.

While AMC has usurped the ticket subscription market from MoviePass through its branded Stubs A-List program, its 4.8% decline in total average ticket price (2.4% decline on a constant currency basis) reflected implementation of the program and other promotional pricing initiatives, as well as declines in Imax and 3D volumes primarily due to the mix of films during the period.

Stubs A-List ended the quarter with more than 785,000 subscribers.

AMC implemented a 10% membership price increase in 10 states and a 20% price increase in five states. Based on the average frequency of subscribers, their associated full-price bring-along guest attendance, their food and beverage spend and the price increases in the first quarter, AMC contends the A- List program resulted in incremental profitability in the first quarter compared to estimated results if the program had not existed.

“This is largely attributable to the power of the AMC platform: stemming from experiential initiatives and enhancements at our theatres; a frictionless use of technology to communicate, engage and sell to our guests,” CEO Adam Aron said in a statement.