MoviePass has had a tough time recently, between literally running out of money, suffering an effective 99.999% loss in adjusted stock value from last year's peak, and trying to cut member benefits even as it increases prices. But the company is still taking its future quite seriously. In an unexpected move, it has decided not to increase subscription prices. Instead, it'll be switching to a three movie per month maximum, with a $5 discount for any tickets beyond that. Peak Pricing and Ticket Verification—two common customer complaints—will also be axed.
This whole MoviePass story has a lot of ups and downs. Someone should write a movie about it and then not be able to use MoviePass to see it.
— 𝙰𝚊𝚛𝚘𝚗 𝚆𝚒𝚎𝚗𝚎𝚛 (@Wieneraaron) August 3, 2018
The near-unlimited movie binging days are over, but MoviePass doesn't think many of its customers will actually care too much. Apparently, only 15% of subscribers see four or more films with the pass per month, so most people with a MoviePass shouldn't even notice. Past that, the $5 discount is enough to typically cover between 1/2 to 1/4 of a standard ticket's price in most areas, so the price difference could still be worth it for those that spend a bit more time at the theater.
The new plan will also "include many major studio first-run films," and will suspend previous unpopular moves including Peak Pricing and Ticket Verification. Subscribers will transition to this new plan upon renewal, starting August 15th. Parts of MoviePass' associated press release make this sound like a mandatory move, but later the company also implies that customers will have a choice when the time comes. Annual subscribers will not be affected until their renewal dates land.
MoviePass and owners Helios and Matheson Analytics (Nasdaq: HMNY) believe that these changes, which only exclude a fraction of its most expensive customers, should benefit the company when it comes to long-term sustainability. Investors seem to agree at least in part, as prices are up 20% today, with an additional 8% in after-hours trading at the time of writing. Granted, 20% of $0.08 doesn't represent much of a change, and these gains don't make up for the company's incredible losses over the last week, month, or year.
If cutting that 15% fat doesn't balance the budget, MoviePass is in trouble once it finally burns through the $6.2 million in cash it borrowed.
MoviePass™ Launches New Pricing Plan Built for The Mass Consumer
New Subscription Offering Continues at a Monthly Price of $9.95, Includes New Releases, Suspends Peak Pricing and Ticket Verification and Introduces Boundaries to Ensure Long-Term Stability
MoviePass launches new pricing plan built for the mass consumer (Photo: Business Wire)
MoviePass launches new pricing plan built for the mass consumer (Photo: Business Wire)
August 06, 2018 09:15 AM Eastern Daylight Time
NEW YORK--(BUSINESS WIRE)--MoviePass™, the nation’s premier movie theater subscription service and a majority-owned subsidiary of Helios and Matheson Analytics Inc. (Nasdaq:HMNY) (“Helios”), announces its new subscription plan and business model effective August 15, 2018. MoviePass’ new subscription plan retains its industry-low monthly subscription rate of $9.95 and at the same time creates a long-term and sustainable business model. The new plan will include many major studio first-run films. For our subscribers who have migrated to the new subscription plan, we are suspending Peak Pricing and Ticket Verification. MoviePass continues to be the most widely enjoyed theatrical subscription service in the United States, available at 91% of the theaters.
“All along, we’ve known that we need to invest heavily to prove our business model and bring enough subscribers into the business to truly understand their usage patterns and allow us to leverage ancillary revenue opportunities”
We have heard – and we have listened to – our MoviePass Community and we will not be raising prices to $14.95 a month. The new plan is focused on usage by the bulk of our subscribers who have historically used MoviePass to attend three movies or fewer a month. Additionally, the new plan addresses past misuses which imposed undue costs on the system, including ticket scalping, unauthorized card usage and other activities, which in the past necessitated the use of certain remedial measures that have sometimes been inconvenient for our subscribers.
Beginning August 15, 2018, MoviePass subscribers will transition to the new plan upon their renewal, which gives subscribers up to three movies a month for $9.95, and up to a $5.00 discount for any additional movie tickets. Because only 15 percent of MoviePass members see four or more movies a month, we expect that the new subscription model will have no impact whatsoever on over 85 percent of our subscribers.
“We are well aware that during our journey to innovate moviegoing — a form of entertainment that over time has become unaffordable and broken — we’ve encountered many challenges. However, any industry-wide disruption like MoviePass requires a tremendous amount of testing, pivoting, and learning,“ said Mitch Lowe CEO of MoviePass. “We discovered over several months of research that our customers value a low monthly price above nearly everything else, so we came together to create a plan that delivers what most of our loyal MoviePass fans want, and one that, we believe, will also help to stabilize our business model. While most of our loyal subscribers shared the passion for this new accessible movie experience and experimented fairly, the fact is that a small number have used our business model to a point where it was compromising the business’ long-term stability. As is true with any new company, we’ve evolved to accommodate what has become an unprecedented phenomenon. We are now creating a framework to provide the vast majority of subscribers with what they want most – low cost, value, variety, and broad availability – and to bring some moderation to the small number of subscribers who imposed undue cost on the system by viewing a disproportionately large number of movies. We believe this new plan is a way for us to move forward with stability and continue to revitalize an entrenched industry and return moviegoing to everyone’s financial reach.”
Monthly subscribers will be given the opportunity to subscribe to the new plan when their current plan comes up for renewal beginning August 15, 2018. Annual subscribers will not be affected by this plan until their renewal dates. Any subscriber can still cancel anytime.
“All along, we’ve known that we need to invest heavily to prove our business model and bring enough subscribers into the business to truly understand their usage patterns and allow us to leverage ancillary revenue opportunities,” said Ted Farnsworth, Chairman and CEO of HMNY. “However, one year and 3 million plus members later, it has become clear that a small number — only 15 percent — of the subscriber base has been stressing the system. We believe this new business model will immediately reduce our burn so we can refocus our efforts where they belong: making a permanent and positive change in this industry by creating an amazing theater-going experience and building a company that continues to benefit our nationwide community.”
About Helios and Matheson Analytics
Helios and Matheson Analytics Inc. (Nasdaq:HMNY) (“Helios”) is a provider of information technology services and solutions, offering a range of technology platforms focusing on big data, artificial intelligence, business intelligence, social listening, and consumer-centric technology. Helios currently owns approximately 92% of the outstanding shares (excluding options and warrants) of MoviePass Inc., the nation's premier movie-theater subscription service. Helios' holdings include RedZone Map™, a safety and navigation app for iOS and Android users, and a community-based ecosystem that features a socially empowered safety map app that enhances mobile GPS navigation using advanced proprietary technology. Helios is headquartered in New York, NY and listed on the Nasdaq Capital Market under the symbol HMNY. For more information, visit us at www.hmny.com.
About MoviePass Inc.
MoviePass Inc. (“MoviePass”) is a marketing technology platform enhancing the exploration of film and the moviegoing experience. As the nation's premier movie-theater subscription service, MoviePass provides film enthusiasts the ability to attend select new movies in theaters. The service, now accepted at more than 91% of theaters across the United States, is the nation's largest theater network. Visit us at moviepass.com.
Cautionary Statement on Forward-looking Information
Certain statements in this communication contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 or under Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (collectively, “forward-looking statements”) that may not be based on historical fact, but instead relate to future events, including without limitation statements containing the words “believe”, “may”, “plan”, “will”, “estimate”, “continue”, “anticipate”, “intend”, “expect” and similar expressions. All statements other than statements of historical fact included in this communication are forward-looking statements.
Such forward-looking statements are based on a number of assumptions. Although Helios’ management believes that the assumptions made and expectations represented by such statements are reasonable, there can be no assurance that a forward-looking statement contained herein will prove to be accurate. Actual results and developments (including, without limitation, whether the new subscription plan will stabilize the MoviePass business model and lower the burn and the impact of the new model on MoviePass members) may differ significantly from those expressed or implied by the forward-looking statements contained herein and even if such actual results and developments are realized or substantially realized, there can be no assurance that they will have the expected consequences or effects. Some, but not all, of these risks include, among other things: our capital requirements and whether or not we will be able to raise capital as needed; whether our new subscription plan and business model will be successful; our ability to successfully develop the business model of MoviePass; our ability to retain our existing subscribers and market and sell our services to new subscribers following the change in the subscription plan and business model; our ability to integrate the operations of MoviePass and other acquired businesses into our operation; and the risk factors described in Helios’ Annual Report on Form 10-K for the fiscal year ended December 31, 2017, its quarterly report on Form 10-Q for the quarter ended March 31, 2018 and other filings, including subsequent current and periodic reports, information statements and registration statements filed with the U.S. Securities and Exchange Commission. You are cautioned to review such reports and other filings at www.sec.gov
Given these risks, uncertainties and factors, you are cautioned not to place undue reliance on such forward-looking statements and information, which are qualified in their entirety by this cautionary statement. All forward-looking statements and information made herein are based on Helios’ current expectations and Helios does not undertake an obligation to revise or update such forward-looking statements and information to reflect subsequent events or circumstances, except as required by law.
The Pollack PR Marketing Group
Stephanie Goldman/Mark Havenner, 310-556-4443
[email protected] / [email protected]
LaunchSquad for MoviePass
Gavin Skillman, 212-564-3665