Ampere: Global OTT Revenue to Top Box Office in 2019

It’s an over-the-top world, now with the box office living in it.

New projections from London-based research firm Ampere Analysis contend global revenue ($46 billion) from over-the-top video platforms such as Netflix and Amazon Prime Video will supplant the worldwide box office ($40 billion) in 2019.

With Netflix and Prime Video already driving SVOD revenue past the domestic box office in 2017, the trend is expected to repeat in the United Kingdom this year and in China in 2019.

Surprisingly, Ampere found that SVOD subscribers remain frequent moviegoers, with subscribers attending theatrical screenings twice as often as non-subscribers. The ratio increased by a factor of three in Japan – despite SVOD services costing about half as much as a theatrical ticket.

“Our analysis of consumers in 15 markets reveals that although there are differences in the cost of cinema attendance by country, there’s clearly an appetite for content amongst some consumers, whether that be on the big screen, or a smaller one,” senior analyst Toby Holleran said in a statement. “The key for cinema is to understand that while SVOD subscribers are more avid cinema goers, this may not always be the case. Therefore, the shared experience of watching a film on the big screen must remain an enticing — and realistically priced.”

 

 

 

MoviePass Looking to Raise Prices, Restore Consumer/Investor Trust

MoviePass, the beleaguered theatrical ticket subscription service, is set to roll out new monthly pricing plans it hopes will financially stabilize the service and restore investor confidence in corporate parent Helios and Matheson Analytics, among other goals.

In an interview with Variety, MoviePass CEO Mitch Lowe said the new tiered pricing plans – ranging from the existing $9.95 to $24.95 – would be dependent on where subscribers lived.

As a result, consumers living in rural areas would likely see no change to the $9.95 fee (dubbed “select”) affording access to three movies per month at select times, while moviegoers in major markets such as Los Angeles and New York would pay $14.95.

A $19.95 “red carpet” option – which mirrors the fee of a competing service from AMC Theatres – enables rural subscribers access to three screenings at any time in any format (Imax, 3D, 2D). The option costs $24.95 in major cities.

“We have a lot to prove to all our constituents,” said Lowe. “We don’t just have to prove ourselves to our members, we also have to prove ourselves to the investment community, our employees, and our partners.”

Indeed, the service’s well-chronicled missteps largely revolved around an unsustainable business model that paid exhibitors full price for every ticket consumed by subscribers paying less than $10 per month for daily access to a theatrical screening.

With MoviePass unable to convince exhibitors to share in the financial risk in return for enhanced foot traffic and sharing user data – the latter triggering data breach concerns – the service began to hemorrhage money and alienate consumers and investors.

In HMNY’s most-recent fiscal report, the company reported a loss of $137 million and just $6.2 million in cash available. The parent’s stock is worth pennies and in risk of being delisted by Nasdaq – despite a reverse-stock split last summer. A planned second reverse-stock split was abandoned after failing to generate enough shareholder approval.

“Expectations weren’t met,” said Rodes Ponzer, head of marketing. “The creative memes and the consumer vitriol, we understand it. We told customers [theatrical access] was un-limited and we didn’t meet their expectations. Now we’re going to set their expectations properly.”

 

 

 

 

MoviePass Promotes Itum to EVP

MoviePass, the movie theater subscription service and majority-owned subsidiary of Helios and Matheson Analytics, has appointed Khalid Itum to EVP.

Previously VP of business development, Itum will continue to report to CEO Mitch Lowe. Itum will manage day-to-day operations at MoviePass, working closely with both Lowe and HMNY CEO Ted Farnsworth to spearhead company development, and drive its exhibition and distribution strategies forward, according to a MoviePass press release. Itum will also be responsible for creating its strategic plan and ensuring its implementation.

“Khalid is a unique talent with an amazing vision, who has been an integral part of MoviePass since 2014,” said Lowe in a statement. “Before coming on in a full-time capacity in 2017 to lead our studio affairs and distributor partnerships, he played a significant role as an advisor. As we continue to spur innovation across the industry, he not only strengthens our sales and operations efforts across the organization, but he deepens our relationships within the industry ecosystem.”

As VP, Itum had been responsible for driving revenue through multiple studio and independent distributor partnerships and various brand and content deals. He played a crucial role in growing MoviePass’ Los Angeles office and led the strategic formation of MoviePass Ventures and its first acquisition of American Animals — alongside The Orchard — at the 2017 Sundance Film Festival, according to the release. He also spearheaded the acquisition of Moviefone from Oath earlier this year.

“Khalid has a proven track record and I believe he will serve our financial goals and increase our overall operating performance,” said Ted Farnsworth, CEO of Helios and Matheson, in a statement. “Khalid brings a remarkable enthusiasm and passion to the job each day and truly shares in the overall vision of MoviePass.”

“I’m eager to continue building MoviePass and am proud of how far we’ve come,” said Itum in a statement. “The road hasn’t been easy — and the hyper growth has been challenging. However, we’ve taken a hard look over the past few weeks and months at what needs to happen in order to not just preserve what we’ve built, but to use it as a foundation upon which to build. Because of this, I know we’ll emerge a better partner to the theaters (big and small), major studios and independent distributors with whom we have the privilege of working to collectively best serve the interests of the American consumer. You may notice we’ve been out of the news for some time, and that’s been by design. At MoviePass, we’ve recently prioritized building toward a vision that aligns our success with greater consumption of entertainment. You’ll soon be able to judge for yourselves, and I believe that the best marketing we can do, today and always, is to enhance our product and treat our subscriber as a member of something special: because that’s what MoviePass is to a great number of Americans already. It’s on us to regain their trust. I believe the future is bright for our company, and I couldn’t do it without my team which has been giving its 200% dedication and effort to transform the offering and platform into its full potential. I look forward to announcing some powerful additions to our management team to join with us in charging forward.”

Survey: Half of MoviePass Subs Likely to Cancel

Fiscally challenged MoviePass got more bad news Aug. 28 after a survey found nearly 50% of MoviePass respondents will likely cancel their membership.

In the August survey of 1,558 moviegoers — including 424 MoviePass subscribers — conducted by National Research Group for The Hollywood Reporter, just 48% of MoviePass respondents said they were satisfied with the service — which was down from 83% approval in a previous survey this spring.

Central to the service’s problems — beyond financial — are the ever-changing rules of engagement, according to the survey. A short-lived price hike from $9.95 to $14.95 was scuttled, with subscribers limited to three screenings per month. That change was followed by more restrictions on what titles subscribers could see and when.

“MoviePass’ innovation was offering the freedom and flexibility to see any movie, at any time, at almost any theater, for a low price,” NRG CEO Jon Penn told THR. “By constantly changing the terms of service — limiting which films subscribers could see and when they could see them — MoviePass has eroded brand trust and undermined their leadership position.”

Survey respondents appear in favor of ticket subscription services, with 23% interested in AMC Theatres’ A-List Stub platform. Another 39% said they would favor any service that could be sustainable.

“There remains immense opportunity and moviegoer appetite for innovation in movie ticket buying,” said Penn. “Future services that offer value, flexibility and convenience — in an economically viable way — will help drive moviegoing to new heights.”

 

Helios Touts One-Year Anniversary of MoviePass Acquisition Despite Mounting Losses

MoviePass owner Helios and Matheson Analytics Aug. 15 touted the one-year anniversary of its acquisition of the movie subscription service despite ongoing financial troubles.

“With only eight employees at the time, MoviePass was considered a fringe player supporting 720 partnered screens and having 15,000 subscribers,” read the press release from Helios. “When MoviePass lowered its subscription price from $20 per month to $9.95 per month, it created a movement bringing movie enthusiasts back to movie theaters and became a boon to a declining industry which, one year later, is showing signs of a financial rebound.

“Within the first several days, MoviePass grew 1,000%, from 15,000 subscribers to 150,000. MoviePass continued the quick growth trajectory, acquiring 1 million subscribers in just four months. This growth enabled MoviePass to close deals with CostcoiHeart Radio, and major Hollywood studios.”

MoviePass has more than 2,000 partner screens while also available for use at 91% of movie theaters nationwide, according to the release. MoviePass recently launched a new subscription model which is projected to reduce its cash deficit by approximately 60% or more, while allowing its subscribers to enjoy three movies per month for $9.95 per month and additional movies at a discounted price, a “win-win” for its subscribers and the industry, the release stated.

“We far exceeded our 2017 expectation for Helios and MoviePass,” said Ted Farnsworth, Helios chairman and CEO, in a statement. “In our agreement to acquire MoviePass in August 2017, MoviePass had a performance milestone to achieve 100,000 subscribers in one year. We were all surprised to see the subscriber growth surpass that milestone in one week. It is rare to see surprises of this magnitude. We’ve reached an important point in our company where, after a year of research and analysis, we believe we have fine-tuned the MoviePass business model to fit our unique growth rate. Under the new plan, we believe we are creating a more sustainable path for MoviePass and its loyal subscribers.”

“Measured by number of movie tickets sold, we are the fourth largest theater chain in the country without any brick and mortar locations, or screens,” said MoviePass CEO Mitch Lowe in a statement. “It’s an amazing milestone considering we feel like we’ve just begun.”

Still, the losses mounted during the past year. Helios Aug. 14 reported a second-quarter (ended June 30) net loss of $83.6 million on revenue of $74.1 million. The loss compared to a net loss of $5.2 million on revenue of $1.1 million during the previous-year period (before it acquired a 92% stake in MoviePass). MoviePass generated $72.4 million in subscription revenue but spent $178.7 million reimbursing exhibitors for tickets consumed by subscribers.

Helios, in its Aug. 15 release, noted the following highlights of the past year:

  • Helios acquired MovieFone which will be integrated with MoviePass.
  • Helios launched MoviePass Ventures at Sundance Film Festival 2018.
  • Helios launched MoviePass Films with Emmett Furla Oasis Films and veteran Hollywood producers Randall Emmett and George Furla.
  • MoviePass Films signed Bruce Willis for its first production, 10 Minutes Gone.
  • MoviePass E-Ticketing partners have seen a 38% growth in just the last few weeks.
  • MoviePass now accounts for approximately 6% of all movie tickets sold in the U.S. in any given week.
  • MoviePass has purchased over $450 million worth of tickets in the last 12 months.
  • 49% of MoviePass subscribers are seeing movies they wouldn’t normally see in theaters.
  • MoviePass has partnered with two major studios and more than 10 independent distributors and was engaged to promote their films, showing efficacy in marketing and buying a greater percentage of their box office, showing it can persuade subscribers to see particular titles over others.
  • MoviePass parent Helios established MoviePass Ventures in January 2018, and co-acquired rights to two movie titles, American Animalsand Gotti, and brought its subscriber base a series of MoviePass subscriber-only events. It has begun to monetize the titles downstream, beyond the theatrical window.
  • MoviePass conducted a series of sweepstakes and offers, showing the responsiveness and receptiveness of its subscriber base, including a 1.5% conversion rate for a financial services company (compared to an average 0.025% conversion rate) and over 120,000 opt-ins in a 24-hour period for a movie-related sweepstakes.
  • MoviePass is one of the most widely read business stories of 2018.
  • 47% of MoviePass subscribers are recommending more movies to friends.
  • 70% of MoviePass subscribers state that they somewhat or strongly agree that they are still more likely to see a film despite a low Rotten Tomatoes score.
  • For Beast, a Roadside Attractions’/30West’s production, MoviePass-supported and e-ticketing screens grossed 54.7% higher than theaters that MoviePass does not support.
  • MoviePass ticket purchases represented 16.8% of Thursday night previews for Paramount’s Book Club.
  • During the July 4 holiday week, MoviePass accounted for more than 5% of Universal Pictures’ First Purge, a 3,000-plus screen, wide release.
  • For Sundance-lauded Hearts Beat Loud, MoviePass represented 40% of the film’s box office take in its first full week of theatrical release in New York and Los Angeles.
  • For Tag, which MoviePass promoted in-app, the service’s revenue represented 13% of the film’s opening weekend domestic box office.
  • For A Miseducation of Cameron Post: MoviePass represented 57% of the film’s opening weekend New York City release.
  • For Blindspotting, MoviePass contributed 22.7% of its opening weekend domestic box office, and 24.7% through the first Tuesday following its release (37.6% domestic box office contribution on Monday, 30.8% domestic box office contribution on Tuesday) that included advance member screenings.

Comcast, Fandango Partner to Sell Movie Tickets on the TV

In a unique inter-corporate marketing move, Comcast Cable and Fandango May 30 announced that Xfinity subscribers can now for the first time purchase movie tickets via the X1 set-top and voice remote on their television.

Fandango, which includes transactional platform Fandango Now, is part of the Universal Filmed Entertainment Group, which is a unit of NBC Universal and owned by Comcast.

Xfinity X1 customers can say “Get tickets” into their X1 voice remote while watching trailers to more than 30,000 theatrical screens in the U.S., including Universal Pictures’ Jurassic World: Fallen Kingdom,which debuts June 22. The companies expect to extend this feature to additional new releases throughout the year.

“Xfinity X1 enables us to continually explore one-of-a-kind experiences that complement the TV viewing experience, allowing viewers to interact with content where and when it is convenient for them,” Nancy Spears, VP, strategy and execution, Comcast Cable, said in a statement.

X1 customers who watch the Jurassic World: Fallen Kingdom trailer on Xfinity On Demand will receive an on-screen notification prompting them to say “Get tickets” into their voice remote (or press the info button on the remote) to initiate the online ticket-buying process. From there, they’ll be able to review a list of showtimes at nearby theaters. Customers can opt to send the local showtimes to their mobile phone to complete the purchase via Fandango’s mobile app or website.

Prior to the launch of Fallen Kingdom and to celebrate the 25th anniversary of Jurassic Park, Xfinity TV customers can watch the entire Jurassic franchise through a new curated destination on X1 — accessible via the movies section on Xfinity On Demand or by saying “Jurassic World” into the voice remote.

Subs can rent or purchase any of the previous films, pre-order Fallen Kingdomhome entertainment release and access clips, trailers and other special content related to the film franchise.

“At Fandango, we are always looking for innovative ways to super serve movie fans, when they are engaging with movie content so that they can easily act on their interest and purchase a ticket to the theater on the platforms and devices they use,” said Mark Young, SVP, head of business development and strategy at Fandango.

 

 

 

MoviePass Running Out of Money. Who Knew?

NEWS ANALYSIS — The rollercoaster existence of movie ticket subscription service MoviePass took another precipitous plunge May 8, with shares of parent Helios and Matheson Analytics (HMNY) closing down more than 31% at $1.45 per share.

To the absolute shock of no one paying attention.

The company, in a regulatory filing, disclosed it had $15.5 million in cash left in the coffer, while operating a business model that burns through $21.7 million monthly offering subscribers daily access to a theatrical screening for a $9.95 monthly fee.

To be sure, HMNY said it has another $29.7 million in deposits from associated merchants and annual subscribers; but doing the math doesn’t give that fiscal tally much of a lifespan.

Why? In January, CEO Mitch Lowe boasted MoviePass was buying one of every 35 theatrical tickets used in the United States. It had more than 2 million subscribers, with 5 million projected by year’s end.

In April, the company — in a shrewd move — acquired ’80s leftover Moviefone from Verizon’s Oath portfolio, in a deal that gave Verizon a 9% stake in MoviePass.

Then it surprisingly announced it had bought a fiscal stake in John Travolta’s biopic Gotti — after Lionsgate dropped the movie from its release slate.

“This is an ambitious movie for which we’re thrilled to offer exclusive opportunities, such as exclusive tickets to the U.S. premiere event, word of mouth screenings and other related events to our nationwide subscriber base,” said Lowe.

Lofty measures that seemed to impress believers while confusing the media.

Unfortunately, to make a loss-leader business model work requires more than hype and marketing. For MoviePass, its millions of subs have to frequent the cineplex as often as they would the gym. Not often, or at least less than once a month.

AMC Theatres, the nation’s largest exhibitor, disclosed that in April the average MoviePass subscriber frequented its screens nearly three times (2.75), for which the service paid AMC $12.03 per visit.

“Now, I took the calculator out … and I got to a number that was considerably larger than $9.95,” Adam Aron, CEO of AMC Theatres, said on the chain’s fiscal call.

So too, apparently, did the HMNY brain trust, which began modifying user policy rules — seemingly by the week. Initially, MoviePass blocked admittance to select theaters (in pricier regions), and then limited access to select movies, i.e. blockbusters such as Black Panther and Avengers: Infinity War, to no more than one screening per subscriber.

“We hope this will encourage you to see new movies and enjoy something different!” the company wrote on its support page.

In reality, the move enabled HMNY to cut its cash deficit by more than 35% during the first week of May, according to the filing.

Wall Street had seen enough.

AMC CEO: MoviePass Paid Out Nearly Three Times Per Sub in April

A basic tenet of business is that if you spend more than you take in, you won’t be in business very long.

Late into AMC Theatres’ May 7 fiscal call, CEO Adam Aron was asked about movie ticket subscription service MoviePass and its ongoing impact on revenue.

“I have been waiting for that question the whole call,” Aron said giddily.

And with good reason. Aron has been a vocal critic of MoviePass, in large because he believes the service’s $9.95 monthly price point affording members access to one 2D screening per day is unsustainable. The executive said he supports the subscription ticket business model provided it is done “rationally” and “intelligibly.”

“We said that there’s nothing wrong with subscriptions programs. They can be quite positive … but they have to be done at a price that is [reasonable],” Aron said.

Indeed, MoviePass paid AMC $12.02 per ticket on “hundreds of thousands” of tickets, at a rate 2.75 times per subscriber, according to Aron.

“Now, I took the calculator out and I multiplied 2.75 times $12.02, and I got to a number that was considerably larger than $9.95,” he said.

Notably, AMC has been using a subscription service – dubbed “Limitless” in the United Kingdom within its Odeon theaters since 2016. The $24-$27 monthly fee enables users access to as many screenings per day as desired.

Unlike theatrical tickets in the United States, the average Odeon ticket costs $10.85 – almost a third of the subscription price. In addition, there are 121 Odeon theaters in the U.K. – a fraction of the 661 AMC theatres in the U.S.

Aron said he wasn’t sure if a similar subscription service would work domestically. He said company bean counters have dissected MoviePass subscriber activity since last September, coupled with Limitless subscriber activity over the past three years.

“This is still a small part of our business,” Aron said. “The subscription numbers are under 5% of our tickets sold, but the whole subject is intriguing one and it has our attention.”

 

Film Enthusiast’s Release Report Chronicles Two Decades of Disc, Home Entertainment Industry

It is a statistic perhaps only Ralph Tribbey might notice.

The theatrical-to-disc window of top films would break the 100-day mark for the first time in more than two decades this June.

“On June 12, the 52-week moving average of films grossing $25 million or more at the box office will pierce the 100-day mark for the first time in the 22-year history of the DVD format,” Tribbey wrote in a Special Report edition of the DVD & Blu-ray Release Report that he has been producing for more than two decades.

“That’s the first time that we’ve cracked it,” Tribbey said. “I think that by year-end we could be pushing 95 days.”

It’s a statistic that it particularly important to theatrical distributors that have been under siege from digital services such as Netflix, which has been releasing its films online at the same time they hit theaters. The faster films hit aftermarket distribution, the shorter the time theaters have to capitalize on content income.

“I think digital is driving the marketplace,” Tribbey said, noting there has been a “breakup of traditional distribution patterns.”

Beginning in 2016 the studios collectively began to move things through the pipeline much faster, Tribbey noted.

“They’re squeezing the theatrical to a point where theatrical will be squeezed to the point where it doesn’t make any sense anymore,” he opined.

Tribbey is in a unique position to observe these changes. A native of Los Angeles, after studying economics, he took a job offer as a business analyst for Dun and Bradstreet in San Diego, but soon realized his passion was theatrical exhibition and changed careers. During the early 1970s he worked for Loews Theatres, General Cinema, National Cinema and Great Western Theatres. By 1975 he was running a six-theater chain in partnership with future film producer Steve Lane (The Howling, Lawnmower Man) in San Diego and Orange Counties, which included the arthouse venues, The Strand in Ocean Beach and The Balboa in Newport Beach. During that time, he brought The Rocky Horror Picture Show midnight screenings to San Diego and Orange counties. The chain also operated two first run theaters in Escondido, which Tribbey said proved to be too successful for the larger chains to ignore, as they began building larger theaters and squeezed his independent chain out.

During the period, he opened the second video rental store — after Barry Rosenblat’s Video Library — in the city of San Diego (in a small outlet adjacent to The Strand). This small video retail outlet introduced him to local distributor Herb Fischer and a life-long personal and business relationship followed.

The transition from theatrical exhibition to home entertainment included VP of operations for Jim Lahm’s Orange County-based Video Crossroads, the publishing of close to 100,000 poster-sized newsletters for independent video rental outlets each month, a year and a half as managing editor of American Video Monthly Magazine, the designer and publisher of Coast Video Distribution’s monthly mailer, and marketing for Key Video, a subsidiary of 20th Century-Fox, with Herb Fischer as the president.

As entrepreneur with many hats, he jumped at the chance to take over marketing for Metro-Goldwyn-Mayer’s MGM/UA Home Video label in 1987.  He worked alongside former Sony Pictures Home Entertainment president David Bishop at MGM (1987-1990); he was VP of marketing while Bishop was VP of sales. He left MGM when Kirk Kerkorian sold the company to Giancarlo Parretti.

Following his stint at MGM, he served as SVP of marketing for replicator MediaCopy for three years, followed by marketing consulting positions simultaneously with Cabin Fever Entertainment and Orion Pictures. It was during this period that the DVD format was being developed and Tribbey said it then occurred to him that there might be a business in tracking and reporting on DVD releases and patterns.

Tribbey thought, “Why not track DVD from day one and see how it develops?”

He made up his mind to follow the data when Cabin Fever and Orion were both sold within a 48-hour period. Thus, in 1997 he launched the DVD Release Report (later called the DVD & Blu-ray Release Report to accommodate a new disc format). For 22 years, Tribbey has tracked box office take, disc release dates, retail prices and other data for the home entertainment business.

In the process, he’s noted various changes.

“There was the huge rush from 2000 to 2006 where the format took off,” he said. “Everybody was on board. Everybody was converting their libraries to DVD.”

Then he found that Blu-ray Disc peeked as digital delivery exploded.

Now, manufactured-on-demand discs are beginning to dominate.

“I think this year, we will have more MOD SKUs released than manufactured SKUs,” he said, adding MOD dominates “deep catalog, special interest, foreign-language and obscure titles.”

In his spare time, Tribbey is working on books, including one on the chronological theatrical release history of horror, sci-fi and fantasy films of the 1950s, ‘60s and ‘70s.

“It’s fun,” he said.

But he’s still a big proponent of disc.

“For things that you want to keep, I think hard copy is the way to go,” he said.

Fandango Inks Deal with National Amusements

Fandango has made its first-ever agreement with theatrical exhibition company National Amusements for ticketing at nearly 400 screens throughout the Northeast.

In addition to adding National Amusements’ Showcase Cinemas, Fandango has added more than 1,500 new screens from more than a dozen exhibitors across the country over the past year, bringing Fandango’s worldwide screen count to more than 40,000 screens.

“Fandango is proud to represent National Amusements’ Showcase Cinemas and further serve moviegoers throughout the Northeast with our leading-edge movie discovery and ticketing innovations,” said Fandango SVP and chief commerce officer Kevin Shepela. “By enabling Showcase Cinemas customers to quickly and easily discover movies and buy tickets on the latest online, mobile, social, AI bot and voice assistant platforms, we believe we can help drive even more moviegoers into their theaters for many years to come.”

Showcase Cinemas amenities include reserved seating, power-operated recliners, lobby bars that allow guests to take a drink to their seat, full-service restaurants, and the premium formats XPlus, MX4D and IMAX available at many locations.

“We look forward to working with Fandango to bring our superior entertainment experience, showtimes, and tickets to millions of additional moviegoers across Fandango’s digital platforms,” said Mark Malinowski, VP of marketing, National Amusements. “With the continued rise of advance ticketing and reserved seating, we know many of our customers want to use Fandango as part of their movie-going planning process.  Through this new partnership with the industry leader in both innovation and customer service, we are excited to now offer our customers the option to seamlessly purchase Showcase tickets through Fandango.”