MoviePass Film Releases Stumble

By Robert Marich
   June 16, 2018—The first two litmus-test cases have arrived to demonstrate the ability of MoviePass to lift boxoffice for specific films as an adjunct to its core cinema ticketing.
   The result? Both the John Travolta-starring Gotti and film festival pickup American Animals generated lackluster boxoffice for
MoviePass subscription ticket service seems to be run simply to generate a large subscriber base, not long-term economic viability.

the three-day weekend June 15-17. In 503 theaters in its premiere weekend, gangster drama Gotti took in $1.67 million to rank as the 11th highest grosser; its Sunday trend was downward indicating a lack of momentum and a so-so per-screen average of just over $3,320. That per-screen average can be deemed okay, but I think it is weak for a first weekend when the biggest burst is expected.
   Meanwhile, American Animals, which opened on four screens June 1, went wider to 79 screens June 15 and now has $760,545 in 17 days of release. The museum-heist drama ranked a lowly 23 for this weekend; further, its box office technical indicators are weak, which doesn't bode well for its future.
   I am surprised at the lackluster showing. You’d think MoviePass could generate more attendance by clever marketing to its subscriber base of 3 million. I don’t view leveraging MoviePass subscriber base as a long-term business when, in the case of Gotti anyway, the film involved got terrible reviews from professional critics and a low ratings from moviegoers. If bad movies are served up constantly, MoviePass subscribers would become wise to a racket of promotions for lousy films.
   The Gotti film is a $10 million production that sat on the shelf unreleased for years. MoviePass swooped in to buy a half stake with another company in April with the intention of distributing the Travolta movie, which it now has done. MoviePass took a half stake in American Animals after winning an auction at a film festival.
   It’s fascinating to see the parent of MoviePass, Helios Matheson Analytics (owns 92%), embraced by unsophisticated retail investors who on investor chat boards praise MoviePass as innovative, disruptive and The Next Big Thing. As I’ve commented previously, price cutting with a $9.95 monthly cinema pass (good for one-a-day admission) is not innovative. What if it was priced at two cents a month…would that be even more innovative? There is no barrier for entry to offer cinema tickets on a rock-bottom-priced subcription basis, other than no one else wants to endure the MoviePass' nose-bleed-level red ink. The inability to get impressive premiere-week audiences for its two films punctures a MoviePass claim that it would create a revenue-generating business helping Hollywood promote films.
   From my view, MoviePass is not being managed for long-term viability, but rather impressive subscriber count (the 3 million). The jacking up the subscriber count with an unbelievably-low monthly subscription rate excites unsophisticated investors who shrug off the MoviePass $20 million+ cash burn per month, with no end in sight.
   The parent company is issuing new stock (currently at 35 cents a share) to fund losses; the same shares traded above $30 each last autumn. Indeed, if Gotti and American Animal were a big hit with the MoviePass subscribers, it would create even more red ink because those tickets would be subsidized at a loss to MoviePass.
For full text, click links below; this website’s text is searchable via searchboxes on top of webpages.