The MoviePass saga continues as an independent auditor’s bleak outlook on the company reports “substantial doubt” about its ability to continue.
The news comes off the heels of CEO Mitch Lowe’s walking back statements eluding to the company’s data collection capabilities and how MoviePass seeks to track consumer habits and movie-going preferences to “push” other services and user-specific features. The vision Lowe and MoviePass maintains, to “know where you’re going to go and know when the movie is going to start,” in order to provide customers “relevant recommendations,” might be short-lived as financial documents made public by its parent company, Helios & Matheson Analytics, reveal a need for additional funding and net losses for the foreseeable future.
Though Lowe has previously claimed MoviePass will reach profitability in 2019, the filing indicates that MoviePass “currently spends more to retain a subscriber than the revenue derived from that subscriber.” The service’s other sources of revenue are not enough to offset or “exceed the costs of subscriber retention.”
Helios & Matheson Analytics CEO Ted Farnsworth tells Business Insider that $110 million of the loss is non-cash, but it’s still a much higher loss than the $7.4 million that the company reported before its acquisition of MoviePass.
MoviePass has gained over 2 million subscribers since offering a monthly plan for $9.95 (although this monthly fee fluctuates regularly). Given recent insight into the company’s finances, it’s anyone’s guess as to whether MoviePass and Helios & Matheson Analytics, who recently plummeted more than 40% in the market trade since revealing its public share pricing, will be willing or able to continue offering low subscription prices for their movie ticketing service.
