MoviePass Owner Sued by Shareholders as Business Model Falters

MoviePass (incorrectly) assumed it would be able to strike sweetheart deals with all theater chains, thus drastically reducing overall costs. It even sounds good in theory - why wouldn't the theater want to get paid for seats that would have otherwise gone empty and have more people inside buying concessions?

It could even have worked - maybe five or ten years ago. Now the theaters themselves quickly realized the value of such a subscription model, and made the logical decision to cut out MoviePass entirely and just offer it themselves.

It's similar to how Netflix would never exist had it started out today, because no studio would surrender their back-catalogs to them for pennies.

> MoviePass parent Helios & Matheson Analytics Inc. omitted and misstated its financial prospects in press releases when it touted a "sustainable" business model, the shareholders claim in lawsuits filed in Manhattan federal court.

Is this for real? Any outsider could have seen that this model was unsustainable from the start, with the business buying tickets at full price and then selling them at an unlimited rate for $9.99. To claim ignorance here as an investor just seems negligent.

In the end a service like MoviePass will be needed, noone wants one just tied to one theater chain most likely though it will be that way for a while if not indefinitely. It looks like this iteration of a movie service independent of movie theaters just won't be it.

As it has been said, theaters are empty much of the time and they make major margins from their concessions. You'd think more of them would have gone for it. Maybe somehow they tie it to concessions sales in that you can get 19.99 a month or something if you aren't buying concessions but 14.99 or 9.99 with limited movies if you are buying concessions and that is tracked through the card. At that point it is a loyalty/rewards program and you could go to the theaters with ROI in that the customers you bring in are x% concessions buyers for x amount. Seems like an easier sell hooked to concessions sales.

Theaters pay between 5-20k per film per week and make almost nothing from ticket sales, if not lose some depending on the distributor and if they are first run theaters. Theaters NEED concession sales more than ticket sales.

It seems a service that allows free movies that ties pricing to concessions would do better. Or, we'll just be stuck with theater bound movie services which is essentially a local theater only rewards program.

I think MoviePass has been successful in showing that the industry needs a shakeup. I dont know what their monetization model was, I dont think they knew what it was.

A better business model:

$19.99 per month. $2/matinee | $3/non-matinee. $1 in 'movie cash' for every $5 spent on concessions. spend 15 -- get $3...meaning the $3 is basically waived for a non-matinee.

Edit to clarify: This would then be more friendly towards theaters, encourage more $$ in concessions, and make them possibly give more deals/lower costs to moviepass... I think it would be more sustainable.

Damn. Been rooting for them. Theaters are practically vacant most of the time, so I'd think it would be a win-win. But the chains can't stomach sharing the power. Sounds like Movie Pass is all but done at this point.

They sent a confirmation mail saying that "I am in" as soon as I cancelled their subscription! Pretty lame they can't identify difference between an entry event and an exit event

Why does this resemble a bailout?