MoviePass reaches 3 million subscribers
As subscriptions soar, company invests in films and advertising
MoviePass announced Wednesday that it has reached the 3 million subscriber mark and unveiled further ambitions in the face of declining stock prices and growing criticism that the one-movie-a-day subscription plan is financially unsustainable.
In its announcement, MoviePass said that more than 5 percent of all U.S. movie receipts were purchased through its services — and as much as 8 percent in its peak weeks. When MoviePass targeted advertisements toward its subscribers for select movies, the company said its box office receipts for the movies jumped to 30 percent.
MoviePass — and its parent company, the New York Citybased firm Helios and Matheson — said it expects to reach 5 million subscribers by the end of 2018.
“MoviePass is moving quickly and decisively on a course to continue innovating the film industry from the ground up and
delivering audiences for films and films for audiences,” said MoviePass CEO Mitch Lowe in a statement. “We are witnessing the dawn of a new Golden Age, where audiences, studios and exhibitors are all connected, from top to bottom — all in the interest of diversifying the movie-going palate and demonstrating the success of smaller, independent titles.”
MoviePass started its new subscription model in August and currently offers subscribers one movie ticket per day for $9.95 a month. The company’s rate of growth has slowed down, according to Business Insider; it took seven weeks for MoviePass to hit 2 million subscribers from 1 million, but it took 18 weeks to reach 3 million subscribers from 2 million.
Despite MoviePass’ growth, Wall Street has not been kind. After hitting its peak share price of $38.86 in October, Helios and Matheson’s share price has slipped nearly 99 percent, sitting at 37 cents per share Wednesday.
Helios and Matheson reportedly lost $150 million in 2017, mostly due to its acquisition of a majority stake in MoviePass in December, according to a 10-K annual report an independent auditor filed to the Securities and Exchange Commission in April.
In a statement Wednesday, Helios and Matheson CEO Ted Farnsworth said he expected to use MoviePass’ subscriber base to expand the business into other ventures, such as advertising and its acquisition of old and upcoming movies.
Helios and Matheson already has a subsidiary called MoviePass Ventures, which purchases stakes for upcoming movies. After the Sundance movie festival in January,
MoviePass and another entertainment company purchased “American Animals,” an art heist drama, for $3 million.
MoviePass Ventures also took a stake in the upcoming gangster movie “Gotti,” starring John Travolta, according to Deadline. Helios and Matheson also made a deal with Emmett Furla Oasis Films, which produced “Gotti,” to buy its film library and current production slate and launched MoviePass Films.
“With MoviePass Films and MoviePass Ventures under the Helios umbrella, we are continuously adding more perks and services for our MoviePass subscribers,” Farnsworth said in a statement. “Consistent growth in MoviePass subscribers means we can utilize our media companies in ways no one has seen before.”
“We are witnessing the dawn of a new Golden Age, where audiences, studios and exhibitors are all connected, from top to bottom — all in the interest of diversifying the movie-going palate and demonstrating the success of smaller, independent titles.” — Mitch Lowe, MoviePass CEO