Moviepass is a subscription based company that allows users to see one movie a day in 91% of all theaters in America. It started out at a price point of $99, then dropping down to $30, and finally falling to $9.99, marking a significant turning point in the company’s history. With this low price point, there was an increased user base, after all, it made sense when you only have to ten dollars, and you can see 100s of dollars of movies per month. Some users even claimed that the service had saved them upwards of $1000 since its drop in price point. Moreover, if you think it sounds too good to be true, then you are probably correct.
Moviepass is not doing so well when it comes to financials. In fact, the company’s stock price dropped by more than 31 percent because the investors believe it will not be profitable. Every time Moviepass releases a new report on financials, it loses more and more investors and causes worries that the company will soon go under.
According to reports as early as April 30th, 2018, Moviepass loses on average $21 million per month in paying all the user’s tickets to its vendors and running the company. This figure was taken from an average of seven months. Moreover, right now it only has $15.5 million in reserve, meaning that theoretically, the company cannot survive until next month.
This largely explains all the restrictions that the company was putting out on its service, such as limiting the number of times a person could see a movie.
Right now its parent company, Helios & Matheson has acknowledged that Moviepass is bleeding cash and that they will need new investments to stay afloat.
If we are unable to obtain sufficient amounts of additional capital, we may be required to reduce the scope of our planned growth or otherwise alter our business model, objectives and operations.
from Helios & Matheson filing.