MoviePass, a majority-owned subsidiary of Helios and Matheson Analytics, today announced the implementation of several new measures the company is using to try to get to profitability. Through these new steps, including a price increase, the company believes it will be able to compress its timeline to reach profitability. The MoviePass price increase will see the standard plan go to $14.95 per month within the next 30 days. Also, first run movies opening on more than 1,000 screens will be limited in their availability during the first two weeks, unless made available on a promotional basis.
Approaching the one-year anniversary of introducing its standard $9.95 price point, the MoviePass community has grown to more than 3 million members and in turn has contributed to box office growth, responsible for approximately 6 percent of the nation’s total box office sales in the first half of 2018, according to the company. In addition, MoviePass Ventures and MoviePass Films are contributing to the company’s ancillary revenue.
But members of MoviePass have also run into a lot of trouble trying to get tickets for new releases, such as Avengers: Infinity War and Mission: Impossible – Fallout, the latter because the company ran out of money it needed in order to pay theaters the price of the tickets.
In an effort to maintain the integrity of the MoviePass mission, to enhance discovery, and to drive attendance to smaller films and bolster the independent film community, the company says it will begin to limit ticket availability to blockbuster films. This change has already begun rolling out, with Mission: Impossible – Fallout being the first film included in the measure. This is a strategic move by the company to both limit cash burn and stay loyal to its mission to empower the smaller artistic film communities.
“Over the past year, we challenged an entrenched industry while maintaining the financially transparent records of a publicly traded company. We believe that the measures we began rolling out last week will immediately reduce cash burn by 60% and will continue to generate lower funding needs in the future,” said Ted Farnsworth, Chairman and CEO of Helios.
“These changes are meant to protect the longevity of our company and prevent abuse of the service. While no one likes change, these are essential steps to continue providing the most attractive subscription service in the industry. Our community has shown an immense amount of enthusiasm over the past year, and we trust that they will continue to share our vision to reinvigorate the movie industry,” said Mitch Lowe, MoviePass CEO.
As of Q3 and beyond, MoviePass is also generating incremental non-subscription revenue of approximately $4 to $6 per subscriber per quarter. Integration of MoviePass Ventures and MoviePass Films with the company’s own original content allows them to gain revenue by owning the films through box office, streaming, DVD, retail, and transactional sales.