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Ted Farnsworth

CNN Media: MoviePass continues its rapid rise as it surpasses two million subscribers

MoviePass is not slowing down.

The $10 a month unlimited movie service just crossed two million subscribers less than one month after passing 1.5 million users, the company announced on Thursday. 

"We're giving people a reason to go back to the movie theaters and they're going in droves," CEO Mitch Lowe said in statement. "With awards season here, we hope we can make Hollywood and exhibitors very happy by filling seats with eager audiences." 

Thursday's announcement did not include any information on how many subscribers are actually using the service to watch movies. CNN has reached out to MoviePass for further details. 

Ted Farnsworth, the chairman and CEO of MoviePass' majority owner and analytics firm Helios and Matheson, said that the service is bringing people back to theaters by "lowering their cost," which the company believes is "transformational for the industry." 

The data the company collects from these two million movie-goers "will become an important asset to our partners and the future of the movie industry," Farnsworth said. 

MoviePass has been the talk of Hollywood and movie-goers since it lowered its subscription fee to $9.95 a month in August, setting off its tremendous growth rate. 

Lowe told CNN last month that the company is buying one in every 35 tickets sold in the country. He also said that the company is playing catch up to its own growth by investing in areas like its unstable MoviePass app and its unreliable customer service. 

Related: MoviePass CEO: $10 unlimited movie service is playing catch up to its own growth

Despite its successful rise, the service has found itself in a contentious relationship with mega movie chains like AMC while also answering questions about just how viable its business plan is. MoviePass sells its user data to third parties to make money. 

"Our service is really low because we are going to use our understanding of you as a customer to be able to give you relevant suggestions that you might find valuable in your life," Lowe told CNN last month. "We might say there's a great restaurant across the street from the movie. If you go over there and show them your card, you're going to get a free appetizer."

Wired: HOW DOES MOVIEPASS MAKE MONEY? WE'RE STARTING TO FIND OUT

MoviePass has pulled support from some AMC theaters, just one of many signs it's finally serious about making money.  PATRICK T. FALLON/BLOOMBERG/GETTY IMAGES

MoviePass has pulled support from some AMC theaters, just one of many signs it's finally serious about making money.

PATRICK T. FALLON/BLOOMBERG/GETTY IMAGES

WHEN MOVIEPASS LAUNCHED last summer, it introduced a seemingly impossible offer: See a movie every single day in theaters, paying only a monthly fee that, in most markets, amounts to less than a single ticket. It worked. Earlier this month, MoviePass hit 1.5 million subscribers, growing much faster than anyone expected, including MoviePass.

But amassing customers was never going to be the hard part. MoviePass now has to show that it can actually, you know, make money. A little less than six months in, it looks as though it just might have an answer—although a fresh spat with AMC shows that not everyone will like it.

Giving It Away

To be absolutely clear: The more subscribers MoviePass signs up, the more money it loses. It pays theaters full price for each ticket, whether a member visits once or 31 times a month. It has to provide for customer service to support those 1.5 million people, many of whom have lobbed valid complaints—MoviePass issues debit cards to each of its members, and initially couldn't keep up with demand—as the service struggled with its rapid expansion. And that’s on top of the usual, unglamorous costs of running any business. (Backends don’t maintain themselves.) If it seems like MoviePass is too good to be true, that’s because right now, it is.

Which is also why its explosive growth hasn’t been an unvarnished good, at least in the short term. “It’s harder in some respects and easier in others,” says MoviePass CEO Mitch Lowe, who cites the company’s customer service falterings as a primary drawback. There’s also the matter of all the cash the company must have run through by now; Helios and Matheson, an analytics company which has a majority stake in MoviePass, continues to put millions toward keeping the company afloat through the outflow. Analyst Brian Kintsligner of Maxim Group recently wrotethat the company had "an estimated seven months of cash" to cover losses incurred by heavy-usage members.

The question, then, might not be whether MoviePass has a long-term plan for success—it's if the company can stick around long enough to see it through.

Read more here

The Verge: MoviePass pulls support from popular AMC theaters

MoviePass and the AMC Theatres chain have never exactly enjoyed a rosy relationship, and the latest step in their conflict came today, as MoviePass pulled support from some of the chain’s most high-profile locations. Deadline reports that the service is no longer supporting ticket purchases at theaters like the AMC Empire 25 in New York, Universal City Walk near Los Angeles, and the AMC Loews Boston Common.

“As of today, you’ll find a small handful of theaters are no longer available on our platform,” MoviePass CEO Mitch Lowe said in a statement. “Our number one goal as a company is to provide an accessible price-point for people to enjoy films the way they’re meant to be seen: on the big screen. Many exhibitors have been receptive to this mission, and we’re excited to keep working with theater chains that are closely aligned with our customer service values.” The statement goes on to clarify that the list of participating theaters is subject to change, and MoviePass customers should consult the mobile app for updates to that list.

AMC and MoviePass have been publicly at odds since the subscription service drastically cut its monthly subscription price in August 2017. (The company previously relied on a tiered model that scaled monthly pricing from $15 to $50 based on region, much like movie ticket prices can vary from one locale to another.) AMC responded by threatening to drop out of MoviePass’ deal, and potentially even file a lawsuit. The chain’s logic has been straightforward, however: mass adoption of a subscription service like MoviePass could effectively change the perceived value of movies, resulting in a situation where theatrical exhibitors wouldn’t be able to charge enough to keep their own businesses afloat. 

“AMC also believes that promising essentially unlimited first-run movie content at a price below $10 per month over time will not provide sufficient revenue to operate quality theaters, nor will it produce enough income to provide filmmakers with sufficient incentive to make great new movies,” the company said in August.

What’s interesting about today’s development is that MoviePass reportedly didn’t notify AMC or its own customers ahead of time. In fact, AMC’s own support account on Twitter wrote earlier today that MoviePass still has not contacted the chain about the development. Given the public rancor between the two companies, it seems likely that MoviePass made the change quietly as a bit of hardball negotiation, hoping customers would become angry with the theater chain and blame it for the problem. On social media, that appears to be exactly what’s happened. But in reality, the tactic could easily backfire on MoviePass, as customers realize they can’t trust the company to consistently provide access to their favorite theaters. Presenting MoviePass access as arbitrary and subject to political maneuvering is hardly a consumer-friendly tactic.

It’s been clear for some time that MoviePass isn’t simply trying to find ways to bring more people into existing movie theaters. The subscription-price reduction came after MoviePass sold a majority stake to the data firm Helios and Matheson Analytics, Inc., and the change has allowed the company to jump from around 20,000 subscribers to 1.5 million subscribers as of January 2018. MoviePass’ ability to track what movies its customers are watching, and where they’re buying tickets, is valuable data for marketers, advertisers, and distributors. And Lowe has said that selling that data is a major way that MoviePass is going to make money. Not having access to AMC — the largest theater chain in both the United States and the entire world — could make achieving that goal more difficult, since it would be clear MoviePass’ data would be incomplete. There are good reasons AMC was the first chain MoviePass signed a deal with, and that importance is likely why MoviePass is being so aggressive around AMC now.

MoviePass is already trying to add revenue streams past its data-driven approach. The company has been heavily promoting movies like I, Tonya and Forever My Girl to its users, clearly as part of a paid promotional package. And before 2018’s Sundance Film Festival, the company announced it had spun up a division that will actually acquire movies, then use a traditional distribution company to get them into theaters. During Sundance, it partnered with distributor The Orchard to purchase North American distribution rights for Bart Layton’s American Animals for $3 million, giving the company the opportunity to create a closed loop with a captive audience: it can own part of a movie that it then promotes to its own customers, driving up the ticket sales that its own subscription service helps generate.

And like most entertainment companies, MoviePass is already looking beyond theatrical exhibition. In November, CEO Mitch Lowe said on CNBC that the company would eventually launch its own streaming service as well. But as MoviePass tries to hardball AMC into going along with its demands, and as it lures in millions of customers by offering increasingly lower ticket prices, it’s important to remember that when something seems too good to be true, it often is. 

MoviePass isn’t trying to help movie theaters; it’s trying to use them to capture data it can sell. It isn’t trying to help people see more movies out of some altruistic bent; it’s hoping to spike attendance in the short term so it can expand the pool of people whose data it’s collecting. And when it doesn’t get the answers it likes from a chain like AMC, it’s willing to cut those theaters out completely, regardless of the harm that does to its customers or reputation. While a $9.95 subscription deal may sound great, it’s really only a good deal if it works consistently, at the theaters where customers want to use it. And as MoviePass’ CEO said, those theaters are subject to change.

The Washington Post: The MoviePass deal: For less than $120 a year, you can see 365 movies. Here’s the catch.

MoviePass is a film nerd’s dream. The subscription service allows users to see one movie a day at a theater for a single monthly cost. The service isn’t new, but it’s become popular among a lot more than movie buffs in the past few months.

During its first six years as a company, MoviePass relied on the idea that most of its 20,000 subscribers wouldn’t use the service. It’s the way many gyms make money: Convince users to sign a contract, then hope they’ll never actually show up to use a treadmill.

But when Mitch Lowe, a Netflix co-founder, took over MoviePass as CEO in June 2016, he opted to flip this revenue model on its head.

First, he teamed up with data firm Helios and Matheson Analytics Inc., which bought a controlling interest in the company. Then, in August, he announced a radical overhaul to the company’s pricing model, dropping the cost from around $50 to $9.95 per month.

Instead of hoping subscribers skip out on the movies, Lowe wants MoviePass customers to visit the theater as often as possible. Because the more movies its subscribers see, the more data the company rakes in. And that’s where the real dough is.

“The big money for us was always understanding the consumers habits and the data, because no one’s ever done that,” Ted Farnsworth, CEO of Helios and Matheson, told The Washington Post.

After the pricing change, the service exploded in popularity, adding 150,000 subscribers in two days, Lowe told The Post. Since then, its user base has grown to 1.5 million subscribers. It added 500,000 of those in last month alone. (For comparison’s sake, it took Netflix about four years to reach 1 million subscribers.)

MoviePass is trying to drive customers to movie theaters at a critical time. Movie attendance in 2017 dropped by more than 6 percent from the previous year, according to Box Office Mojo, which noted about 82 million more tickets were sold in 2016 than 2017.

The average movie in America costs $8.97, according to the National Association of Theatre Owners. In cities such as New York and Washington, tickets can run $15 to $20. MoviePass customers would only need to see one or two movies a month to get their money’s worth. According to the Motion Picture Association of America, 11 percent of American and Canadian moviegoers already do just that.

Since MoviePass pays the full price for each ticket, it quickly loses money on many customers.

“They definitely need to generate revenue from ancillary revenue sources,” Eric Wold, an analyst with B. Riley FBR, a financial services company, told The Post. He added that the company will probably raise its prices over time, much like Netflix did, but even then it will still require other income sources.

The company has spoken of seeking of concession revenue from the theaters to which it sends moviegoers, according to Fortune. During the weekend, the company announced that it will be investing in movies.

But Wold — echoing Farnsworth — said data is the key to the company’s potential success.

While most theater chains track its own customers’ habits, Wold said MoviePass is the first service that can track moviegoers across nearly all theaters in America. Those insights could be valuable to the restaurants, bars and even retail outlets situated around movie theaters, according to Wold.

“That data could help local restaurants, or local clothing stores, market to the moviegoers,” he said, pointing out that many theaters are in malls or strip malls. The other businesses occupying that space would probably pay to know when certain demographics will be visiting en masse.

The service also has a direct line to avid moviegoers, which could benefit the studios themselves.

Wold said while average moviegoers are willing to shell out upward of $15 for blockbusters such as “Star Wars,” they might often wait for smaller fare like “Lady Bird” to hit streaming services. Having MoviePass encourages users to see the smaller films that they wouldn’t normally shell the money out for.

“They’ve already shown results from the non-blockbuster films getting an increase in traffic from MoviePass subscribers,” he said. For example, the service accounted for 1.7 percent of ticket purchases on the opening weekend for the comic book blockbuster “Justice League.” But it accounted for 10 percent of ticket sales of the independent film “Three Billboards Outside Ebbing, Missouri,” according to a news release.

Studios have noticed.

“In the short term, we’re already using the data to promote titles on behalf of the studios. Studios are paying us around two dollars per ticket we buy in exchange for us marketing their film,” Lowe said.

But while studios might be pleased, not all the movie theater companies are.

Cinemark, which owns more than 500 theaters nationwide, launched its own truncated version of MoviePass, called Movie Club, in December. For $8.99, moviegoers can see one movie each month at a Cinemark theater and receive a 20 percent discount on concessions, according to a news release. Like MoviePass, Cinemark’s version doesn’t apply to 3-D movies.

AMC Theatres, which has more than 650 locations in the United States that serve around 200 million moviegoers every year, loudly voiced its opposition to MoviePass in August. The company said the service “is not in the best interest of moviegoers, movie theaters and movie studios” in a harsh statement that said it was consulting with attorneys to determine “if or how” it could prevent MoviePass from being used in its theaters.

“From what we can tell, by definition and absent some other form of other compensation, MoviePass will be losing money on every subscriber seeing two movies or more in a month,” the release stated, cheekily adding, “AMC noted that it is not yet known how to turn lead into gold.”

AMC said it fears that MoviePass offers a price point that’s too good to be true and will eventually go belly-up, disappointing moviegoers who grew used to the cheaper pricing.

If MoviePass fails, “subscribers will have to return to paying between $10 to $15 for a single ticket. After three months with the service, I don’t think I could do that,” Nick Statt wrote in the Verge, adding, “once you’ve gotten something for what feels like free, it’s difficult to go back to paying for it.”

The explosive interest in MoviePass signal that moviegoers are seeking a change, and there’s no indication that it will slow any time soon — unless it proves to be an unsustainable model. AMC declined a request from The Post for comment, but recent remarks from the chain’s CEO Adam Aron hint that the company might be warming to the idea — but still has no plans to share its own revenue.

“We appreciate their business,” Aron said in a November conference call with analysts, according to the Hollywood Reporter. He added, “AMC has absolutely no intention — I repeat, no intention — of sharing any — I repeat, any — of our admissions revenue or our concessions revenue.”

Cheddar: MoviePass Plans To Grab Film Rights

MoviePass announced at Sundance that it will officially get into the film rights business. MoviePass Ventures will acquire film rights and build out their offerings, and they have started scouting at the festival.

Ted Farnsworth is the chairman and CEO of Helios and Matheson, the parent company of MoviePass. He joins Cheddar from Sundance to explain the new initiative.

Farnsworth says this has been the plan since day one. When the announcement was made at Sundance, it immediately became a big buzz. Farnsworth says MoviePass is, "totally disrupting the whole market." MoviePass has already started to bid on some products at Sundance.

When asked if MoviePass intends to increase the price above $10, Farnsworth says he is happy with where it is now. Growth has been strong and there is no advertising, so growth has been completed from word of mouth. Farnsworth explains that MoviePass may look into more premium membership plans, but are keeping the price where it is for now.

MoviePass' focus for now: continue to build their subscription base.

Observer: Indies to Benefit From MoviePass’s Plans to Bankroll Film Acquisitions

MoviePass wants a piece of the action. The subscription ticketing service, which charges a $9.95 monthly fee for unlimited theatrical moviegoing, announced at an industry panel on the opening day of the Sundance Film Festival that they are going to bankroll co-acquisitions with other film distributors.

Their new subsidiary, MoviePass Ventures, will be on the prowl at Sundance for product to parse and partners to piggyback. “We’re open for business,” said Ted Farnsworth, CEO of data analytics firm Helios and Matheson Analytics Inc (parent company of MoviePass). He described the strategy as a way to “put skin in the game” alongside established industry vets who know how to book movies into the right multiplexes and shepherd their theatrical runs.

No companies have been announced yet as candidates for the joint releases, but the toe-dipping into distribution is reminiscent of Amazon Studios, which launched in 2015 with strong assurances that the e-commerce giant and streaming powerhouse would partner with established distributors to assure the sanctity of theatrical windows.

Late last year, though, Amazon Studios announced that they were dropping the partnerships and will handle all their own theatrical distribution going forward. Will MoviePass eventually do the same? It’s anybody’s guess, since so much has changed since the service was founded in 2011. Initially, subscriptions were $50. But at that price point, their consumer base hovered around 20,000. Since dropping the price to $9.95 in 2016, subscriptions have exploded to more than 1.5 million.

The company is burning through money, since they guarantee payment of the full ticket price every time one of their subscribers goes to the movies. Now that so many people have been using MoviePass over the past six months, though, the company can honestly lay claim to significant granular data about their customers’ specific viewing habits—a potential gold mine for film distributors.

MoviePass is currently paying for 3 percent of the U.S. box office. Yet they claim to have boosted 10 percent of the indie film theatrical bookings, which explains their pivot to help distribute movies that debut at festivals like Sundance. They’re goosing attendance for the specialty market—why shouldn’t they angle to get a slice of that revenue? Then again, filmgoing audiences has been slowly eroding for years. It’d be great if MoviePass can disrupt the decline. But expect further tweaking on their business model.

L.A. BIZ: MoviePass to invest in movies before it sells cheap tickets to them

MoviePass arrived at the Sundance Film Festival this week not just as seller of cheap movie tickets but as a buyer of the movies themselves.

The New York-based movie theater subscription service has launched MoviePass Ventures, a wholly owned subsidiary that will co-acquire films with distributors.

Although details are scarce, and no distributor partnerships or film acquisitions have been announced, the move provides more insight into how the company plans to make money.

MoviePass relaunched in August with an all-you-can-watch movie subscription plan for just $10 per month. Subscribers can go to one movie per day, every day, with no blackout dates (excluding Imax and 3-D showings) for one flat monthly rate that’s about a buck more than the cost of one average movie ticket — and a lot less for many moviegoers.

Earlier this month, the company announced it had surpassed 1.5 million subscribers.

Screen Shot 2018-01-20 at 1.03.49 PM.png

Meanwhile, MoviePass, which is majority owned by Helios and Matheson Analytics Inc. (NASDAQ: HMNY), reimburses movie theaters for the full price of those tickets and is operating at a loss as it attempts to convince the industry that its service increases moviegoing.

The company said that it accounts for about 3 percent of domestic ticket sales, but that figure goes up to more than 10 percent of a particular title’s domestic box office when MoviePass promotes the movie to its subscribers. The company said it has boosted its share of domestic box office to 10 percent for such films as “The Post,” “Three Billboards Outside of Ebbing, Missouri,” “Call Me by Your Name” and “The Shape of Water.”

And such increases in the theatrical window pay dividends downstream on platforms such as DVD/Blu-ray, digital, streaming, pay TV, network television, airlines and hotels, and foreign sales.

MoviePass will apply these marketing strategies to the films it co-acquires.

“Given the successes we have demonstrated for our distributor partners in ensuring strong box office in the theatrical window, it’s only natural for us to double down and want to play alongside them — and share in the upside,” said CEO Mitch Lowe in a statement.

“We aren’t here at Sundance to compete with distributors, but rather to put skin in the game alongside them and to bring great films to the big screen across the country for our subscribers,” added Helios and Matheson Analytics CEO Ted Farnsworth.

TechCrunch: MoviePass says it will start acquiring movies, too

On the heels of hitting a 1.5 million subscriber milestone and bringing on a new marketing chief, the subscription service for watching movies in theaters, MoviePass, today announced it’s going to start buying movies, too. The company says it will begin to invest in films so it can share in their success beyond the box office, including on other platforms like streaming, DVD, and on-demand.

At present, MoviePass is seeing rapid growth thanks to dramatic cuts to its subscription pricing, rolled out last year.

Essentially, the company is subsidizing the cost of its subscription with the capital it raised from data firm Helios and Matheson Analytics Inc. (HMNY), now its majority owner. The idea is that MoviePass will operate in the red while growing its subscriber base, and then hit some sort of break even point in terms of revenue before the funding runs out. (Or perhaps HMNY is willing to keep piling on more cash until that point arrives.)

HMNY believes it will eventually be able to sell the data and insights gained from a large subscriber base to studios, who could then do targeted marketing for their films to the most active movie-goers.

The model, of course, is risky. And theater owners like AMC have already lashed outagainst the service claiming its low-cost tickets are devaluing the movie-going experience.

But maybe MoviePass just found a sweet spot in terms of what a large number of consumers are willing to pay to actually go to the movies? After all, movie ticket prices have risen over the years, but attendance is hitting record lows. With all the other options to watch movies these days – not to mention the “peak TV” moment ushered in by the streaming era – these “in-the-theater-movies” face tough competition for consumers’ time and money.

Still, MoviePass believes it has the power to boost theater attendance, so it may as well share in the upside of the films to which it sends all of these customers; and that includes when those films start streaming across other platforms beyond the silver screen.

The company today claimed it can boost theater attendance on demand, in fact.

It says it currently buys about 3 percent of the domestic box office, but when it tweaked some things in its app – things it only described as “a series of levers within its app and marketing-based platform” (uh-huh) – it could move the needle even further. It said it did this for The Post, Three Billboards Outside of Ebbing, MissouriCall Me By Your Name and The Shape of Water. MoviePass says it impacted 10 percent of box office performance for these movies.

We should note the company didn’t share specific data that would allow these figures to be fact-checked more thoroughly.

MoviePass is now at Sundance making the pitch that it’s ready to invest in films itself.

It will do so via MoviePass Ventures, a wholly-owned subsidiary founded to co-acquire films with film distributors.

Basically, the idea here is that since it can (maybe!) boost the performance of a movie in the theatrical window, that will impact the movie’s ability to generate revenue downstream – like when the digital version goes on sale, or when it starts streaming.

And MoviePass wants a cut.

“We aren’t here at Sundance to compete with distributors, but rather to put skin in the game alongside them and to bring great films to the big screen across the country for our subscribers,” said Ted Farnsworth, CEO of Helios and Matheson Analytics Inc., in a statement. “We’re open for business. We’re here at Sundance – and SXSW is next.”

Yahoo Finance: Moviepass tops 1.5M subscribers

Moviepass - the subscription movie service - announced today that it has hit 1.5 million subscribers. Joining us now with more on Moviepass CEO, Mitch Lowe, and the CEO of its parent company, Helios and Matheson, Ted Farnsworth.

Finanzen.Net: MoviePass™ Surpasses 1.5 Million Subscribers

Less than 30 days after announcing its milestone of 1 million subscribers, MoviePass™, the nation’s premier movie theater subscription service and a majority-owned subsidiary of Helios and Matheson Analytics Inc. (Nasdaq:HMNY), announced today that MoviePass™ added another 500,000 new paying subscribers since December 12, 2017. MoviePass™ subscribers can see a movie every day of the month for a low monthly subscription fee of $9.95.

Mitch Lowe & Ted Farnsworth (Photo: Business Wire)

Mitch Lowe & Ted Farnsworth (Photo: Business Wire)

"MoviePass™ is attracting people back to the movie theaters by lowering their cost, which we believe is transformational for the industry,” said Ted Farnsworth, Chairman and Chief Executive Officer of HMNY. "We believe the data MoviePass™ collects from these million and a half movie-goers will become an important asset to our partners and the future of the movie industry,” Mr. Farnsworth continued.

 

Market Watch: How MoviePass plans to make money from its more than 1 million subscribers

MoviePass announced on Dec. 20 that it had surpassed 1 million subscribers 

Source: Getty Images

Source: Getty Images

MoviePass, the $10-a-month subscription service allowing moviegoers to see a film a day at cinemas, has been chewed over in Hollywood — seen as both friend and foe.

The haste with which the company hit the million subscriber milestone — announcing on Dec. 20 that it had done so, just four months after lowering the subscription cost to $10 from as much as $50 — suggests consumers see MoviePass’s value.

It took Netflix, of which MoviePass Chief Executive Mitch Lowe was a founding executive and which, of course, began life as a DVDs-by-mail service, more than three years to hit the 1 million subscriber mark.

MoviePass had roughly 20,000 subscribers before the price cut, but demand for the service since has been much higher than Chief Executive Mitch Lowe expected.

Also see: MoviePass has struggled to meet demand for its $10-a-month movie-ticket deal

Check out: MoviePass helped drive record attendance at Studio Movie Grill cinemas

However, those in the industry and others following the business are concerned that MoviePass’s model is unsustainable. The question is how a movie-theater subscription company subsidizing its members’ potentially expensive film-going habits can be profitable?

“It’s about the data,” said Ted Farnsworth, chief executive of Helios & Matheson Analytics Inc., which owns a majority stake in MoviePass.

Helios & Matheson shares HMNY, +1.11% have been on a tear since the company took its majority position in August. Shares are up about 102% since that time. The stock has been volatile, too, reaching an intraday high of $38.86 per share in October, but closing Thursday at $6.90 a share.

Read: Costco offering members MoviePass and streaming Fandor service for $89.99 a year

Short seller Andrew Left warned retail investors in October that Helios & Matheson shares would fall back to $20, and that MoviePass would never be a $1 billion company.

“I’m not worried about it,” Farnsworth told MarketWatch. “He’s a short seller, so he’s got to cover his squeeze. But the bottle will stand on its own.”

Some critics of the MoviePass business are concerned the company won’t be able to make money and will flame out, further hurting already troubled theater chains, or that it will have to raise subscription prices and drive users away

When Helios & Matheson acquired MoviePass, the company also cut the price from as much as $50 a month to $9.95. But it is still shelling out the full price of tickets to studios and movie theaters.

According to the National Association of Theater Owners, the average cost of a single movie ticket was $8.65 in 2016 — and double that figure in some major U.S. cities.

See: Former Netflix executive wants to shake up moviegoing with $10 MoviePass service

Also read: MoviePass has struggled to meet demand for its $10-a-month movie-ticket deal

“The deal from our side and why we’re excited is we still get paid the full price of admission. If this succeeds in driving attendance, it will pay for itself,” said Chris Aronson, head of distribution at 20th Century Fox FOXA, +3.65% . “And they’ve made no secret that their goal is to mine data from subscribers. We’d be very interested in that.”

That’s exactly what Farnsworth and MoviePass’s Lowe are banking on. 

“Making money putting people in the theater is fine, but also think about the advertising side,” Farnsworth said. “We’re the only company out there that can tell companies exactly who and when people are going to the movies.”

 

If MoviePass is able to prove that it can drive incremental box-office revenue to studios and cinemas, Lowe said, the company can strike deals to share in the revenue from those sales, as well as from concessions.

Read: Is MoviePass’s $10-a-month movie ticket deal really as epic as it seems?

That could then lead to studios paying MoviePass to promote films to its users. MoviePass has experimented with this already, and Farnsworth said 18% of users go to movies after prompting by the MoviePass app.

Farnsworth and Lowe said they want to partner with restaurants located near cinemas and possibly even with Uber to get users a ride to the theater. It’s all about capitalizing on a night out at the movies, Farnsworth said.

“It’s so much easier than people think,” Farnsworth said. “There are so many areas for revenue streams. Will we need to raise more capital in the future? Sure. But right now we’re focusing on growing the company and doing deals with companies already out there.”

Shares of Helios & Matheson have gained 109% in the year to date, while the S&P 500 indexSPX, +0.65% is up 20%, and the Dow Jones Industrial Average DJIA, +0.24% is up nearly 26%.

Cheddar: MoviePass Lets You Go to Theaters For Less than $7 a Month

 
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National movie ticket prices are at an all-time high, but one company wants to tempt Americans with a $6.95 monthly subscription service, which allows moviegoers to hit the cinema once a day, for as many days as they'd like.

That service, Movie Pass, charges about $1.70 less for a full monthly subscription than the national average cost of a single movie ticket in the U.S.

Ted Farnsworth is the CEO at Helios and Matheson, the majority owner of MoviePass. He says the company is leaning towards a data-driven business model.

“That’s really where you make your money --on the data side,” Farnsworth said.

Helios and Matheson recently doubled down on its investment in MoviePass, where Netflix co-founder Mitch Lowe is at the helm, by funneling $100 million into the company. Lowe said that MoviePass will use this funding to expand its data science program.

"This latest round of investment will allow MoviePass to continue to deliver on its mission of staying the number one movie theater subscription service in the country," he said. "As demand for our service continues to accelerate among consumers, the early data we are seeing on movie-going behavior can be tremendously valuable to both the studios and theaters.”

But is this a risky investment? Data suggests that people prefer to watch movies at home. According to a Statista report, a cool 52 percent of Americans who watch movies prefer to stay home, while only 12 percent would actually go to a theater. Still, the same firm projects that the movie industry will hit $50 billion by 2020. As of 2016, it was worth $38 billion.

MoviePass is riling up some industry leaders, however. Movie giant AMC Theaters released a statement this summer calling the company a “small fringe player,” and stated that AMC is working with its lawyers to see if it can prevent MoviePass tickets from being used at its theaters.

“MoviePass announced a change to its ‘subscription model’ that would allow consumers to see up to 365 movies a year for a monthly fee of $9.95. MoviePass envisions paying AMC its full ticket price without discount. The AMC average ticket price for watching a movie at AMC Theatres in the most recent financial quarter was $9.33,” the statement said.

“From what we can tell, by definition and absent some other form of other compensation, MoviePass will be losing money on every subscriber seeing two movies or more in a month.”

This week, MoviePass launched a limited-time holiday sale that allows subscribers to sign up for under $7, although it usually costs 9.95 per month.

Farnsworth says that lowering the cost has brought in an influx of new customers. He also says that the company is partnering with tech companies like Uber and Lyft to offer “movie night” promotions, and similarly with movie studios.

“We are the only company that understands every move you make, what movies you go see,” he said. “It’s a very sustainable model, that’s not our issue at all, that’s why we lowered the price.”

CEO Money: Ted Farnsworth CEO of Helios and Matheson Analytics on CEO Money

As an expert in strategic development, marketing and consumer relations; Mr. Farnsworth has utilized these assets and skills building companies throughout his 30-year career. He has owned and operated numerous companies with proprietary products with recognized brand names that he actively helped to develop like Purple. Many of these companies ultimately became publicly held.

Helios & Matheson is a Big Data company that helps global enterprises make informed decisions by providing insights into social phenomena. Their extensive domain expertise empowers their clients to unlock the value of data to make better decisions. They deliver integrated services in Big Data technology and Advanced Analytics that include engaging in Data Visualization.

Helios and Matheson recently announced that is entered into a definitive agreement to acquire a majority stake of movie subscription technology company MoviePass Inc. HMNY’s innovative growth strategy through the expansion into industries with opportunities for big data and artificial intelligence innovations seeks to increase shareholder value.

Texomas: What the tech: Moviepass App

Today, a single movie ticket is as high as $20 in some cities.

That's too much to see more than 2-3 movies in a month. Not to mention the popcorn and drink and a night out at the movies for me and a date can easily hit $35 and more if you choose to see a film in IMAX or 3D!

Read more here

Bloomberg Markets: MoviePass Is Overwhelmed With Orders After Slashing Prices

MoviePass Chief Executive Officer Mitch Lowe, a co-founder of Netflix Inc., admits he “totally underestimated demand.” With a staff of just nine people, the company “was nowhere near prepared,” he said in an interview. It has since boosted the team to 35 to deal with the backlog.