Moviefone Hires Former Rotten Tomatoes Editor to Reboot Brand

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.

Grae Drake

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.”

 

Atom Tickets Seeks to Work with Exhibitors Rolling Out Subscription Platform

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.

 

MoviePass Raises $6 Million in Funding

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.

 

 

MoviePass Parent CEO Says Fraud Undermined $9.95 Monthly Service

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.

Ted Farnsworth

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.

 

 

MoviePass Parent Names Consultant as Interim CFO

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.

Robert Damon

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.

 

 

MoviePass Restores $9.95 Daily Screening Plan

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.

 

Khalid Itum Departs MoviePass; CTO and Human Resources Executives Transition to Consultants

MoviePass March 13 disclosed that Khalid Itum, hired last December to oversee daily operations at the fiscally-challenged movie theater subscription service, is leaving the company.

Khalid Itum

“Itum will be leaving MoviePass to pursue his entrepreneurial and travel pursuits,” a spokesperson told Business Insider in a statement.

The departure comes as chief technology officer Joey Adarkway and Jake Peterson, head of human resources, transition from fulltime employees to consultants.

The personnel moves come the day after corporate parent Helios and Matheson Analytics disclosed, in a regulatory filing, that MoviePass lost nearly $10 million more ($146.6 million) in the most-recent fiscal filing than was originally disclosed.

Meanwhile, HMNY appears to be successfully churning out content through its MoviePass Films unit headed by co-founders Randall Emmett and George Furla. The company’s content include dramas with Bruce Willis (10 Minutes Gone) — the first of three titles with the actor, and Al Pacino and Meadow Williams in current production, Axis Sally.

In addition, Border, a Cannes-winning film MoviePass Films co-distributed with Neon Rated, was nominated for an Academy Award for Best Makeup and Hairstyling.

“As previously stated, MoviePass has moved in a new strategic direction, and will be refocusing our business model to create a more closely connected relationship between our subscription service and original content production unit, MoviePass Films,” said the spokesperson.

 

 

MoviePass Lost More Money Than Originally Reported

In another blow to fiscally-challenged theatrical ticket subscription service MoviePass, parent Helios and Matheson Analytics March 12 issued a revised financial statement revealing the service lost millions more than originally reported.

HMNY said its revised third-quarter (ended Sept. 30, 2018) net loss topped $146.6 million — nearly 7% more than a net 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.

HMNY attributed the error to overstatement of subscription revenue, including $700,000 of revenue from terminated MoviePass subscriptions by Costco; false recognition of about $5.9 million of revenue from certain suspended subscriptions that had not yet been consented to by subscribers.

The company also identified a non-cash error related to the accounting of derivative securities, which resulted in an understatement of net loss of approximately $2.9 million. HMNY said the error underscored a “material weakness” relating to subscription management.

CEO Ted Farnsworth and CFO Stuart 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 in a suspended state.

“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.

HMNY, which had its stock delisted by Nasdaq for failing to meet the $1 minimum share value, has struggled to sustain the MoviePass business  model that enabled subscribers daily access to a theatrical screening for $9.95 monthly fee.

 

MoviePass Reinventing Business Model — Again

With its corporate (Helios and Matheson Analytics) parent’s stock delisted, theatrical ticket subscription service MoviePass is again attempting to reinvent its business model and relevance — this time without relying on exhibitor cooperation and revenue.

Following the previously announced MoviePass Entertainment Holdings integrating film production and exhibition, MoviePass said it plans to implement a new business model that prioritizes “self-generated” revenue.

Specifically, the fiscally-challenged ticket service plans to focus on “technological innovation” and “high-quality” content production through MoviePass (theatrical subscription service); MoviePass Films (original content production company) and Moviefone (multimedia media information and advertising service).

“Spending the last several months analyzing the many different aspects of our prior business model, in terms of what worked and what didn’t, I believe we’ve been able to illuminate the path forward,” Ted Farnsworth, CEO of HMNY, said in a statement.

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MoviePass CEO Mitch Lowe said the ticket service has gained a “tremendous amount” of insight into moviegoers and the industry over the past 18 months.

Indeed, the service, which launched to much fanfare offering consumers daily access to a theatrical screening for a monthly $9.95 fee, could never financially pay for the loss leader business model without exhibitor help — which the service never received.

As the fiscal losses mounted, HMNY’s stock plummeted. Exhibitors AMC Theatres and Cineworld launched their own ticket subscription services.

MoviePass, however, has apparently been successful in content production.

MoviePass Films, through co-founders co-founders Randall Emmett and George Furla, continue to generate films, including dramas with Bruce Willis (10 Minutes Gone) — the first of three titles with the actor, and Al Pacino and Meadow Williams in current production, Axis Sally.

In addition, Border, a Cannes-winning film MoviePass Films co-distributed with Neon Rated, was nominated for an Academy Award for Best Makeup and Hairstyling.

“We now have a winning combination that we believe will drive consumers to our films and re-energize casual moviegoers to go more often and see great films in local theaters,” said Lowe.

 

AMC Theatres Ticket Service Tops 700,000 Subscribers

AMC Theatres said its Stubs A-List subscription ticket service added 100,000 subscribers in January and February to increase its membership base above 700,000.

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AMC Theatres launched A-List (priced from $19.95 monthly) on June 26, 2018 and was originally expected to hit 500,000 members 12 months after launch. Membership includes access 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.

AMC said its conventional Stubs A-List membership program has totaled 14 million attendees, including the purchase of traditionally-priced tickets for family and friends.

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

“With every passing milestone, Stubs A-List is proving to be a huge benefit to our guests, our studio partners and our shareholders,” CEO Adam Aron said in a statement. “Members are watching more movies than they did before A-List was created, and they’re bringing their friends and family members along, who are paying for their tickets at full price.”