MoviePass, the movie ticket subscription service, ran out of money last week and for a time its three million members were not able to avoid themselves of its service, leading to growing skepticism about its ability to stay in business.
In other words, it was not a good day. To get out of the mess, MoviePass had to borrow $5 million, and analysts say it won’t be the last money that MoviePass looks to borrow; the only question is whether anyone will lend it to the company.
The New York Times reports that “Helios and Matheson Analytics, its parent company, said in a regulatory filing on Friday that MoviePass had experienced a ‘service interruption’ the day before because it could not make ‘required payments to its merchant and fulfillment processors’.
“In a message to subscribers on Friday, the company’s chief executive, Mitch Lowe, apologized for the outage, during which some of its three million subscribers could not check in to see movies, and said the service was ‘up-and-running with stability at 100%’.”
MoviePass charges its members $10 a month, which gives them the ability to see one movie a day at participating theaters. The Times notes that “a movie ticket costs roughly $10, so if a subscriber saw more than one movie per month, the company would likely lose money, he said. In April, the company disclosed to regulators that it was losing roughly $20 million per month since September, and that auditors, citing ‘significant net losses’ and problems with capital, doubted its ability to continue.”
In other words, it was not a good day. To get out of the mess, MoviePass had to borrow $5 million, and analysts say it won’t be the last money that MoviePass looks to borrow; the only question is whether anyone will lend it to the company.
The New York Times reports that “Helios and Matheson Analytics, its parent company, said in a regulatory filing on Friday that MoviePass had experienced a ‘service interruption’ the day before because it could not make ‘required payments to its merchant and fulfillment processors’.
“In a message to subscribers on Friday, the company’s chief executive, Mitch Lowe, apologized for the outage, during which some of its three million subscribers could not check in to see movies, and said the service was ‘up-and-running with stability at 100%’.”
MoviePass charges its members $10 a month, which gives them the ability to see one movie a day at participating theaters. The Times notes that “a movie ticket costs roughly $10, so if a subscriber saw more than one movie per month, the company would likely lose money, he said. In April, the company disclosed to regulators that it was losing roughly $20 million per month since September, and that auditors, citing ‘significant net losses’ and problems with capital, doubted its ability to continue.”
- KC's View:
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One analyst is quoted in the story as saying that “the $5 million was that last breath of oxygen. And now we’re deciding if we’re going to cut off their oxygen.”
Yikes.
I’m all in favor of disruptive business models, but the model has to include actually staying in business and delivering on promises. Shutting down on a Thursday night when Mission: Impossible - Fallout is just opening in theaters is not my idea of good timing.
