MoviePass Borrowed $5M to End Friday's Outage After Missing Bill Payment, Business Model May Not Be Sustainable [Blackouts, Restrictions to Increase]
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MoviePass investors and subscribers are concerned…
It turns out that their service outage last Friday was due to MoviePass missing a payment to a contractor. They had to borrow $5 million to get up and services running again. They say are currently at 100% again, but analysts say that the movie a day for $10 a month service model is not sustainable.
https://www.pcmag.com/news/362752/moviepass-forced-to-borrow-5m-to-pay-bills-end-outage
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It appears that MoviePass was unavailable to subscribers for most of yesterday so they couldn’t buy any tickets.
Also, when the service was working, many found they were blocked from getting tickets for “Mission: Impossible: Fallout.” In fact, the CEO, Mitch Lowe, announced that two other big new releases (“Christopher Robin” and “The Meg”) will also be blocked. It is expected that new releases of more major movie titles will be added to the blocked list.
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As predicted, MoviePass changed their terms: members can no longer views one movie a day and are now limited to a maximum of 3 movies per month. The change will go into effect on August 15th. The monthly fee will remain $9.95.
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The 3 movie a month limit doesn’t kick in until September so, until then, MoviePass seems to be doing everything it can to stop members from using the service. For example, the app crashed for hours for the 3rd Friday in a row, and yesterday (Friday) users were forced to choose between an awful movie (Slender Man) or 2 ridiculous movie times for Mission Impossible (2:30pm or 10:45pm)… Christopher Robin was briefly available but was pulled when the CEO was asked if the late movie time was appropriate for kids. They deny intentionally offering inconvenient movie times and plan to have that fixed over the next few weeks (Just in time for the new plan restrictions to kick in IMHO). The two movies members can choose from each day “may” change.
MoviePass back peddled on the blackouts and will not limit access to popular new releases when the new plan kicks in. I’m guessing this is because customers rejected their plans to increase the monthly fee to $14.95, and they have a growing number of competitors, such as Sinemia, Alamo Drafthouse, and CineMark Movie Club. One competitor, A*LIST, offers 3 free movies a week for $19.95 as month. MoviePass will offer a $2 to $5 discount off tickets above the 3 movie per month limit if purchased through their app.
In other news, the owners of MoviePass covered massive losses (share values shares fell 99.99% in recent months), by selling new shares, thus diluting the value of previous shares. Meanwhile, two investment banks made off with millions in fees by continuing to sell stocks for this floundering company, telling customers it was still a good buy. One guy who used their advice saw his $190,000 investment dwindle down to $240 (shares are currently trading around 9 cents per share).
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MoviePass abruptly changed their previously announced terms… again. It now appears that the 3 movie per month limit will come with more restrictions like a daily list of 6 - 7 permitted movies (that doesn’t change much week to week), limited showtimes based on popularity of film, blacked out first run new releases, and Uber-style surge pricing on (additional fees for hot movies). These changes seem temporary since they promise “exciting… additional features and service offerings — that will bring greater value.”
Meanwhile, shareholders just filed a class action lawsuit against MoviePass’ primary owner Helios and Matheson which introduced the original $9.95 movie-a-day plan.
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MoviePass has cancelled annual subscriptions. You can switch to a monthly subscription or cancel the service altogether.
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@fivetalents wow, what a mess. they’ll wind up finally for bankruptcy is my prediction.
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@mistercheap said in MoviePass Borrowed $5M to End Friday's Outage After Missing Bill Payment, Business Model May Not Be Sustainable [Blackouts, Restrictions to Increase]:
@fivetalents wow, what a mess. they’ll wind up finally for bankruptcy is my prediction.
Yeah, I can’t see how they haven’t already filed for bankruptcy. Their shares are selling around $0.05 each. Their investors must be floating them, but once the new terms take effect shortly, I can’t imaging many people keeping their accounts… especially with the measly 3 movies a month, blocking major releases, only allowing mostly un-popular show times, etc.
It’s a hot mess and it seems to get worse every time they announce a new development/change the membership terms again. I saw the owner doing an impromptu interview a couple of weeks and he seemed delusional about what consumers will tolerate and basic economic/business principles.
