News

Biggest Digital-Media Mktg Bust Sells At Huge Loss

By Robert Marich
  April 6, 2018-The biggest digital-media bust in movie marketing services was just sold at a huge loss, though little noticed. High-flying subscription movie ticket service MoviePass bought Moviefone, the telephone-centric cinema ticket outfit, for $1 million in cash and $8 million in stock. That stockis in MoviePass’ majority owner Helios and Matheson Analytics that is publicly-traded.
   The “biggest bust” is this. Back in 1999, AOL (that is now the Oath division of Verizon) bought the same Moviefone for a whopping
$388 million. The current sale price is $9 million in stock and cash. Be aware that the buyer MoviePass is probably paying a fair price because the loss of value in Moviefone occurred in the past.
   I remember the 2000 tech crash. The big problems were lack of broadband—consumers were mostly on narrow-band dial-up connections that limited consumption of online content—and a gold-rush mentality that drove up prices of mediocre assets like Moviefone.
   Moviefone was conceived as a telephone-centric service at a time when business hadn’t yet grasped the potential of rich-media websites and smart phones hadn't yet been invented. I remember in the 1990s Moviefone rolled out city by city providing voice-by-phone information for theaters in a city backed up by clunky online.
   Regarding the recent sale, “This natural alignment between MoviePass and Moviefone will help us grow our subscriber base significantly and expand our marketing and advertising platform for our studio and brand partners,” Mitch Lowe, CEO of MoviePass, said in a statement.
   Says the third edition of book Marketing To Moviegoers: “A unique characteristic [of digital media] is the ability for movie marketers to establish a direct connection to moviegoers when they click links in web ads or sign up for e-mail mailing lists.” Moviefone’s basic service was surpassed by high levels of interactivity with consumers.

For full text, click links below; this website’s text is searchable via searchboxes on top of webpages:

https://nypost.com/2018/04/05/all-you-can-watch-moviepass-snaps-up-moviefone/

https://www.businesswire.com/news/home/20180405005624/en

http://marketingmovies.net/news/moviepass-economics-dissected/

http://marketingmovies.net/chapters/chapter-4-digital-media/