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.
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.
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.
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.
The service offered a two-ticket plan priced at $6.99 monthly (also billed annually); $9.99 for two tickets, including 3D, 4D and Imax formats; and $14.99 for three tickets, including 3D, 4D, Imax formats.
The strategy differed from MoviePass, which has attempted to circumvent exhibitors through a populous approach — with disastrous fiscal results.
The service’s parent, Helios Matheson Analytics, had its stock delisted by Nasdaq after investors fled MoviePass following tens of millions of dollars in quarterly losses due to an unsustainable business model, uncooperative exhibitors and frequent user policy changes, among other issues.
MoviePass reportedly has little more than 200,000 subscribers after once topping 3 million.
Meanwhile, AMC Theatres, the nation’s largest exhibitor, launched its own subscription service, AMC Stubs A-List, which earlier this year reached 700,000 subs paying $20 monthly fee.
Sinemia alluded to A-List for its decision to shut down.
“We are all witnessing that the future of moviegoing is evolving through movie ticket subscriptions,” Sinemia said. “However, we didn’t see a path to sustainability as an independent movie ticket subscription service in the face of competition from movie theaters as they build their own subscriptions. Thanks to the cost advantage and cross-sell opportunities, movie theaters will be prominent in the movie ticket subscription economy.”
MoviePass, the fiscally-challenged theatrical ticket subscription service, has reportedly shed about 90% of its peak of more than 3 million subscribers from June 2018.
According to BusinessInsider, which cited internal data obtained from the former high-profile service, MoviePass has generated just 13,000 new subs since launching an “uncapped” plan in February affording subs daily access to a theatrical screening for $9.95 monthly fee.
The new plan, which was a reboot of a previous price point that attracted 100,000 subs in 48 hours after launching in 2017, also enables MoviePass to throttle frequent users.
MoviePass owner Helios and Matheson Analytics disputes the subscriber tally, calling the data “incorrect” without elaboration.
Regardless, the MoviePass business model paying exhibitors face value for every movie ticket consumed by subscribers remains financially unsustainable.
The service hemorrhaged hundreds of millions of dollars, sending HMNY stock into a nosedive. Company shares were delisted from Nasdaq earlier this year.
Stacy Spikes, who co-founded MoviePass in 2011, sold it to HMNY in 2017 and was fired from the company in 2018, told BusinessInsider the $9.95 price point was never intended to be permanent.
“[It was] thought of as a promotional thing, in a way celebrating HMNY buying us. But we hit 100,000 [subs] in 48 hours. So I’m like, ‘OK, turn it off. We reached our goal,’” Spikes said.
The executive concluded that $12.99 was the least MoviePass could charge, while a $75 option including Imax and 3D screenings was considered as well.
“But the overriding voice [at HMNY] was, ‘No, this is awesome, look how fast we’re growing.’ And it was this moment of ‘but $10.’ It doesn’t fly. Now the plane is falling,” Spikes said.
In fact, when HMNY CEO Ted Farnsworth and MoviePass CEO Mitch Lowe were photographed joyfully in front of an AMC Theatre on Times Square after surpassing 1 million subs, Spikes had a different reaction.
“That photo changed [MoviePass’] relationship in the marketplace,” he said. “The tone turned it more adversarial [with exhibitors]. Up to that point, MoviePass had been the underdog champion for going to the movies.”
Indeed, AMC Theatres, which had initially been supportive of MoviePass under CEO Gerry Lopez, became increasingly less so under new CEO Adam Aron.
Aron made it a point to repeatedly question the MoviePass business model on fiscal calls and in press releases – despite generating millions in revenue from MoviePass subs.
Last year AMC launched the AMC Stubs A-List subscription service, which has generated about 700,000 subscribers paying $19.95 monthly for access to three screenings weekly in any format.
AMC recently raised prices to $21.95 or $23.95 depending on the market subscribers live in.
Spikes says the initial success of MoviePass, AMC Stubs A-List and Cinemark’s service underscores market demand for a subscription business model.
“The good side was cinema had not been taken seriously since Netflix really got its footing,” he said. “So what I liked about that was this had risen to the zeitgeist of conversation. Seventy-five percent of [MoviePass] members were under the age of 26. Cinema was an event people cared about again. So while there is a sadness around the brand, I was happy to see that this is front and center.”
Moviefone, the 1990s-era movie ticket/recommendation telephone service owned by Helios and Matheson Analytics March 28 announced that former Rotten Tomatoes senior editor Grae Drake has assumed the role of “Ms. Moviefone” to serve as the brand’s personality.
The announcement comes as Moviefone launches a new initiative seeking to become a consumer destination for content, reviews and commentary for movies.
Competition includes online movie ratings platform Rotten Tomatoes, which is owned and operated by NBC Universal subsidiary Fandango.
In a nod to the former “Mr. Moviefone” telephone character, Drake will provide “go-to” commentary on the entertainment industry, in addition to movie recommendations.
Drake will interview filmmakers, celebrities and appear at industry events to provide an inside look at the movies.
She will be responsible for producing and hosting a series of original video content on the Moviefone site. Drake will also oversee the evolution of existing video content, such as the “Unscripted” series, providing Moviefone with the flexibility to continue creating and growing its video library.
Developing dynamic video content will allow viewers to form a bond with Ms. Moviefone and have a more engaging experience with the brand.
“Having a female voice of authority about movies is really important. It’s making the change I want to see regarding representation and gender parity in film media, which is still overwhelmingly male,” Matt Atchity, GM of Moviefone (and former editor-in-chief at Rotten Tomatoes), said in a statement.
Drake is most well-known as a Rotten Tomatoes editor and film critic, which included guest appearances on NBC’s “Today Show”and ABC’s “20/20”and “World News Tonight.”
She is also the recipient of the 2017 Press Award from the International Cinematographers Guild. In this new role, Drake reunites with Atchity and will be working with Drew Taylor, recently promoted to managing editor at Moviefone.
“Ms. Moviefone is the perfect way to connect with moviegoers and strengthen our brand recognition,” said Ted Farnsworth, CEO of Helios and Matheson Analytics. “Moviefone has a bright future ahead, and I know Grae is the perfect person to help make our vision a reality.”
Online ticket platform Atom Tickets announced a new service, Atom Movie Access, enabling exhibitors to develop custom theatrical ticket subscription plans for consumers.
The move represents an effort to incorporate movie theaters with the consumer-popular concept of ticket subscriptions, while not alienating exhibitors as was done by subscription pioneer MoviePass.
MoviePass has cited fraudulent use of its $9.95 monthly subscription – not a flawed business model – for the service’s fiscal challenges.
App-based Atom Movie Access affords exhibitors the ability to offer subscribers reserved seating, pre-order concessions, invite friends via social media and check-in using portable media devices.
“We’ve always believed in being a valuable partner to exhibitors, starting with the core functionality of our app, which allows for marketing promotions at specific locations and integrating exhibitor loyalty plans,” Matthew Bakal, co-founder of Atom Tickets, said in a statement.
The service, which is co-owned by Lionsgate, Disney/Fox and Fidelity Management & Research Co., also offers backend support, including payment transactions, customer service and fraud detection.
“Atom Tickets is an innovative ticketing platform that enables exhibitors to reach and engage new and incremental audiences,” Bakal said.
Helios and Matheson Analytics, the cash-strapped parent to MoviePass and MoviePass Films March 26 announced it has raised a $6 million in financing.
Helios plans to use the proceeds to accelerate MoviePass’ product development, fine tune its subscription technology, and increase MoviePass Films’ investment in new content.
In addition to working capital purposes, Helios will use the net proceeds to redeem approximately $870,000 of Helios’ outstanding non-convertible senior notes that were issued on Oct. 4, 2018 and Dec. 18, 2018, and to pay certain fees due to the placement agent and financial advisor and other transaction expenses.
“We are building the infrastructure, data and tools that we believe will power the next generation of MoviePass,” CEO Ted Farnsworth said in a statement. “We believe this new funding will allow us to double down on our development of transformative technology, while fueling our continued expansion.”
In connection with the financing, Helios agreed to convert the 60,000 shares of preferred stock to 1 million shares of common stock, among other stock warrants. As a result, each share of preferred stock is convertible into 16,667 shares of Helios’ common stock – or more than 666 million shares of common stock priced at a penny each.
The financing comes as Helios cited user fraud for ongoing financial challenges to its theatrical subscription ticket service MoviePass. The service has hemorrhaged hundreds of millions of dollars, contributing to Helios’ shares’ being delisted by Nasdaq.
With MoviePass re-introducing its loss-leader $9.95 monthly service affording subscribers daily access to any non-3D/Imax theatrical screening, Ted Farnsworth, CEO of parent Helios and Matheson Analytics, says the service reboot won’t self-destruct like the last one.
In an interview with The New York Post, Farnsworth says the initial $9.95 unlimited plan launched in the summer of 2017 paying exhibitors face value for every ticket consumed by subscribers didn’t fail due to a flawed business model, instead fraudulent use of the plan contributed to the service hemorrhaging hundreds of millions of dollars.
According to Farnsworth, 20% of Movie Pass subscribers abused the service by acquiring tickets for friends and family not enrolled, binge-watching select movies and/or buying tickets just to go to the bathroom.
He said the abuse, which according to MoviePass resulted in the loss of “tens of millions” of dollars, won’t happen again due to new fraud-detection software installed in the system.
“It definitely would have been a different story if we knew last summer what we know now,” Farnsworth told The Post. “We never had anything in place so that we could test those systems. Right now, we know so much more, we’re so much smarter.”
Indeed, without exhibitors discounting ticket prices or engaging in revenue-sharing deals to reduce costs, MoviePass resorted to blacking out access to select titles in high-traffic theaters in New York and Los Angeles, among other cities.
That led to mass cancelations among the service’s 3 million subscribers.
MoviePass 2.0 now can check legitimate use by monitoring the sub’s location through the service’s app on a user’s smartphone. If the user watching a movie isn’t connected to the service through their phone, MoviePass will know about it.
“Now, if somebody goes to 15 or 20 movies [in a month], they’ll be flagged and then we monitor them to make sure that they are watching the movie,” Farnsworth said. “And if they are, that’s fine.”
While that type of legitimate subscriber nonetheless contributed to HMNY shares being delisted as investors fled the company, Farnsworth said the typical MoviePass sub watched 1.7 movies monthly, which included the fraud data.
“Even if you [limit ticket access] or took a movie out of opening weekend, the same [number] of people went to that movie,” he said. “You either see it today or you see it next week.”
MoviePass claims it has seen an 800% spike in new subscribers since bringing back the $9.95 plan on March 20.
“We wouldn’t have gone back to what we had originally if we weren’t prepared for it,” Farnsworth said. “We would have sat there with our cap plan, kept doing our thing, kept going along.”
HMNY shares closed March 22 up more than 6% to 1.2 cents per share – 98.8% below Nasdaq’s $1-per-share minimum.
Helios and Matheson Analytics March 22 announced the appointment of Robert Damon as CFO, replacing Stuart Benson, who resigned from the parent of the MoviePass theatrical ticket subscription service March 15 to take another job.
Benson’s departure followed the disclosure HMNY had incorrectly recognized about $5.9 million in revenue from MoviePass subscriptions that had been suspended.
Damon, who has worked as a consultant to HMNY for a year, was chief accounting officer for SFX Entertainment for three years through 2016. Previously, he was Katz Media Group CFO for 17 years.
HMNY earlier this month revised its third-quarter net loss to $146.6 million — nearly 7% more than a loss of $137 million originally reported. For nine months of the fiscal year, HMNY lost $256.3 million, 3.8% more than a loss of $246.7 million.
CEO Ted Farnsworth and Benson said measures have been taken to avoid future accounting issues, including implementation of software upgrades to provide “real-time” information for managing and accounting for subscriptions, including subscriptions that are terminated or suspended.
“Members of the company’s management have discussed the matters with Rosenberg Rich Baker Berman, P.A., [HMNY’s] accounting firm,” Benson wrote in the filing.
With senior management exiting and its parent’s stock de-listed, fiscally challenged MoviePass is bringing back the infamous daily theatrical access plan for $9.95 monthly that helped generate millions of subscribers — and generate hundreds of millions of dollars in losses.
Of course there’s a catch. Subscribers who pay upfront for a year get the same $9.95 rate MoviePass allows users to one theatrical screening daily. The rate increases to $14.95 on a month-to-month basis. MoviePass also offers a $19.95 plan with fewer screening limitations.
“We are — and have been — listening to our subscribers every day, and we understand that an uncapped subscription plan at the $9.95 price point is the most appealing option to our subscribers,” Ted Farnsworth, CEO of parent Helios and Matheson Analytics, said in a statement.“While we’ve had to modify our service a number of times in order to continue delivering a movie-going experience to our subscribers, with this new offering we are doing everything we can to bring people a version of the service that originally won their hearts.”
Whether the service can sustain the old pricing remains to be seen. MoviePass pays exhibitors face value for every screening subscribers attend. Without breaks on ticket fees or some sort of revenue sharing, MoviePass loses money when subs regularly go to the movies.