If MoviePass’ saga was a film, this would be the point in the picture where there’d be overt Biblical comparisons made to the moviegoing service’s trials and tribulations. For like Moses, MoviePass might just lead us to the Promised Land of 21st century moveigoing, but at this point it is an open question whether MoviePass itself will live to see it. Indeed, the bad news for the tech company that seemed poise to revolutionize movie attendance keeps on raining buckets this month.
Following a spate of bad headlines, beginning with the service crashing prior to the opening weekend of Mission: Impossible – Fallout to several additional blackouts, price hikes, and limitations on services, MoviePass’ parent company Helios and Matheson posted a quarterly loss of $126.6 million for Q2 2018 (which ended on June 30). Yet that might be the least of it since a class action lawsuit was made public Monday by shareholder Jeffrey Braxton, who filed in New York’s federal district court on behalf of hundreds of other shareholders seeking damages for being misled about the company’s prospects and sustainability. Via Deadline, the lawsuit has Braxton’s legal representation arguing that if MoviePass had been honest, it would have been apparent “there was no reasonable basis to believe MoviePass could monetize the model to a degree that could be maintained before being too buried in debt to survive.”
The news marks what has been a series of debilitating revelations about MoviePass, which seemed to offer customers at least a pleasant alternative to paying upwards of $15 or $20 per movie ticket. For an affordable subscription of less than $10, moviegoers could see as many films as they wished in a given month. However, keeping the service at that price has proven to be untenable, especially now that competitors like AMC theater chain’s AMC Stubs A-List have entered the market with a $20-priced subscription alternative to MoviePass.
After breaking down on the eve of Mission: Impossible – Fallout’s release, MoviePass began a new policy of restricting subscribers’ choices from new popular wide releases in their opening weekend, as well as Helios and Matheson taking out a $5 million loan to stay afloat. Soon thereafter MoviePass limited the number of movies one could see each month with MoviePass to three. And at a price of of now $14.99 a month, as opposed to $6.95 or even $9.99.
Since the fallout began on July 27, Helios and Matheson has seen their stock value plummet 96 percent with shares being currently less than $1. It would seem, in the end, launching such a service at such a low price without limitations proved…. mission: impossible.
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