MoviePass announced Wednesday that it has reached the 3 million subscriber mark and unveiled further ambitions in 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 City-based firm Helios and Matheson — says 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.”
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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 prices have 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 Exchanges 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 …read more
Source:: The Mercury News – Business