Moviepass is Killing its Service
First, it introduced surge pricing, forcing users to pay an extra price for popular movies such as Jurassic World: Fallen Kingdom and Incredibles 2. Then, it suffered from a service outage after not having enough cash to fund its "processors" or "merchants," enraging users who were unable to use its card to buy tickets for Mission Impossible: Fallout during the movie's previews. And these issues occurred several times throughout the same week. Then, it planned to increase the price of its service while restricting access to view certain movies.
Moviepass is approaching rock bottom. After persistently bleeding cash as it funds for users' tickets, the company is struggling to make fees, and its hopes for profitability have become more distant due to its depressing free cash flow. This has greatly affected its parent company Helios and Matheson Analytics and its stock HMNY as it is currently trading below a dollar, despite performing a 1-for-250 reverse stock split to avoid being delisted from the Nasdaq.
And so desperate times called for desperate measures. In July, Moviepass announced raising the price of its subscription service to $15 per month from its $10 fee that initiated nearly one year ago. As a result, buying one ticket probably wouldn't reimburse you fully since most movie tickets range from $11 to $13. This plan sounded great (at least for the company). This would help Moviepass to raise more money while possibly retaining its subscribers due to its still-effective deal, but soon after, it announced another change in the service's procedure that defeated the purpose of going to theaters. That change was restricting subscribers from viewing popular movies, such as ones released by Disney. This was a certain deal-breaker and would effectively make the service useless to many as they wouldn't be able to watch the movies that they wanted.
After much outrage, Moviepass recently announced another revision of its service. Revoking all of its prior changes, Moviepass will allow subscribers to watch any movie (no restrictions) without surge pricing, at a maintained $10 per month fee. However, users will now be limited to 3 movies per month, compared to the service's prior grant of 1 movie per day. While that might slow Moviepass's cash burn, it will continue to lose money as one ticket in a month will still place the company in loss. Additionally, this alteration is a huge injury to the company's brand. The "unlimited" feature is gone from the service. For enthusiastic movie-goers, AMC's Stubs-A-List may seem like the better alternative now, giving 3 movies per week for a $20 monthly charge.
Moviepass is far from its quest of becoming profitable. Its consistent changes to its service reveal the internal turmoil the company is experiencing as it spends an average $21 million per month funding the tickets. It formerly discussed its ambitions to earn more revenue by selling its big data obtained by its app to potential studios after hopefully attaining 5 million subscribers by the end of the year. But the service's modification may hinder that aspiration, threatening its future and growth rate.
What is your opinion? Do you think the company will survive, or be one of those ambitious startups that only die with their vision? Comment your answer below.
For more information about Moviepass, its plans for success, and its debt crisis, check out the video below.
Related articles:
Moviepass is approaching rock bottom. After persistently bleeding cash as it funds for users' tickets, the company is struggling to make fees, and its hopes for profitability have become more distant due to its depressing free cash flow. This has greatly affected its parent company Helios and Matheson Analytics and its stock HMNY as it is currently trading below a dollar, despite performing a 1-for-250 reverse stock split to avoid being delisted from the Nasdaq.
And so desperate times called for desperate measures. In July, Moviepass announced raising the price of its subscription service to $15 per month from its $10 fee that initiated nearly one year ago. As a result, buying one ticket probably wouldn't reimburse you fully since most movie tickets range from $11 to $13. This plan sounded great (at least for the company). This would help Moviepass to raise more money while possibly retaining its subscribers due to its still-effective deal, but soon after, it announced another change in the service's procedure that defeated the purpose of going to theaters. That change was restricting subscribers from viewing popular movies, such as ones released by Disney. This was a certain deal-breaker and would effectively make the service useless to many as they wouldn't be able to watch the movies that they wanted.
After much outrage, Moviepass recently announced another revision of its service. Revoking all of its prior changes, Moviepass will allow subscribers to watch any movie (no restrictions) without surge pricing, at a maintained $10 per month fee. However, users will now be limited to 3 movies per month, compared to the service's prior grant of 1 movie per day. While that might slow Moviepass's cash burn, it will continue to lose money as one ticket in a month will still place the company in loss. Additionally, this alteration is a huge injury to the company's brand. The "unlimited" feature is gone from the service. For enthusiastic movie-goers, AMC's Stubs-A-List may seem like the better alternative now, giving 3 movies per week for a $20 monthly charge.
Moviepass is far from its quest of becoming profitable. Its consistent changes to its service reveal the internal turmoil the company is experiencing as it spends an average $21 million per month funding the tickets. It formerly discussed its ambitions to earn more revenue by selling its big data obtained by its app to potential studios after hopefully attaining 5 million subscribers by the end of the year. But the service's modification may hinder that aspiration, threatening its future and growth rate.
What is your opinion? Do you think the company will survive, or be one of those ambitious startups that only die with their vision? Comment your answer below.
For more information about Moviepass, its plans for success, and its debt crisis, check out the video below.
Related articles:
- Moviepass Runs out of Cash
- The Dramatic Fall of MoviePass: Debt and AMC Stubs A-List
- The Better Deal: MoviePass vs. AMC Stubs A-List
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