Last week parent company Helios and Matheson hammered the final nails into the MoviePass coffin. For those who do not know, briefly - MoviePass was a monthly subscription plan that offered users to see one movie per day for approx. $10 per month. That means you could see up to 31 movies per month - for $10. Now, it was like a Mastercard backed debit card with MoviePass loading money onto your card in order to pay full price for your ticket. But since you’ve already paid the monthly or yearly subscription cost - you don’t owe any more money. You pay approx. $10 per month to see, let’s say - six movies. But MoviePass loaded FULL PRICE cost on your card to cover the ticket. So, while MoviePass paid approx. $70+ to cover the cost of your six movies, it only recouped $10 from you. Which, as we all like to say, “Sounds too good to be true.”
But, it wasn’t. It wasn’t sustainable … but it was true! I bought the yearly MoviePass subscription for about $85 plus a one time sign up free for $20. And in the year I used Movie Pass I saw forty two movies. Which means I paid about $2.5 per movie. So, I happen to know that MoviePass was legit.
That being said, the deal was too good to be sustainable without additional revenue support because, as you can see, MoviePass lost a lot of money on me alone. You multiply that by the 3 million subscribers they had and you can understand why MoviePass was posting $170 million losses per quarter.
But they had a plan to make money - try to get the theater chains to give them a very, very small percentage of the box office but mainly - the concessions. Theater chains make the majority of their money selling you popcorn and soda. MoviePass was trying to show the chains, “Look, about ten percent of moviegoers come to your theater chain and use MoviePass. Don’t you see how important that is? We could just tell them to take their business to another chain. Don’t you think you should give us say, 1% of your concession sales?”
It was a fine plan. But all the theater chains said, “Nope.”
But MoviePass had more plans. Produce their own movies and profit off them. But they disastrously chose Gotti, a John Travolta nightmare of a film which has, um - a 0% rating on rotten tomatoes. I’ve never seen a movie get worse ratings. MoviePass lost a ton of money on that film.
So that plan didn’t work for MoviePass either. But hey, they still had three million subscribers - they must be able to do something with them, right?
Well, MoviePass made wrong choice after wrong choice when, in an attempt to lower the amount of money they were burning each month put all sorts of minor restrictions on subscribers - restricting repeat views, ticket verification, blocking out some new blockbusters, then only offering a few movies to choose from each week. Then reverting all of those changes and going back to “See whatever movie you want whenever you want” but … we’re raising the price.
Basically, their subscribers lost all faith in MoviePass and bailed en’ mass. I stayed until the end of my one year contract but, to be honest, I was only able to see a single movie in the last two months of my subscription because of the restrictions MoviePass put on accounts.
So, I didn’t renew. And they didn’t ask me to. We parted company about six months ago. And now they’re gone. MoviePass certainly was a bold plan and people certainly liked their initial idea so much that lots of other folks noticed and now there are all sorts of rival plans out there, but they are usually restricted to a specific theater chain. So, for example: the AMC card only works at … well, AMC chains. And that’s what made MoviePass unique. It was a Mastercard that you could use anywhere that accepted Mastercard which means it was highly accessible.
In the end though, MoviePass was just managed poorly. Too many poor choices, too many subscription changes, too many partnerships with other companies that always felt more like a “get rich quick with this partnership” scheme and not an actual legitimate partnership that was going to help MoviePass in the long run. I’ve also recently found out that the guy who took over Helios and Matheson, and therefore MoviePass, was a man named Ted Farnsworth. And, Mr. Farnsworth has lawsuits and failed companies trailing behind him a mile long.
“Mr. Farnsworth … been sued numerous times, according to the Miami Herald, and he found his way into a chief executive role after years spent racking up legal disputes in Florida, related in some cases to real estate investments and other inscrutable financial dealings. The Herald reports that Farnsworth has registered more than 50 companies over the last 30 years, a majority of which have shuttered.”
MoviePass may have been doomed before it even had a chance to thrive. But still, it was a great nine month run for MoviePass ... and then it wasn't.