If Only MoviePass's Investors Were This Happy

Mitch Lowe’s subscription service for film junkies is losing money on many of its members. Roll the end credits?

- James E. Ellis And David Rocks

Since Hannah Wolfe signed up for MoviePass Inc.’s $9.95-a-month, film-a-day subscription service in January, the Brooklyn production assistant has seen Black Panther and many of March’s Oscar nominees. Twelve movies in all, at no additional cost. “It seemed a little too good to be true, especially in New York, where movies cost, like, $16 each,” she says. “It feels like I haven’t paid for the ticket.”

In a way, she hasn’t. Wolfe has paid MoviePass about $50, and in turn it has likely shelled out almost $200 to theaters to cover the tickets. Moreover, she’s been recruiting everyone she knows—and some are getting even more out of their subscriptions. Her roommate, who rarely went to movies before, recently saw five in a week. Her father, a retired teacher, is on pace to see 40 this year.

Nine months after slashing its price and sending membership spiking to 2.7 million users, MoviePass is at severe risk of going bust. A U.S. Securities and Exchange Commission filing in April by its parent, Helios & Matheson Analytics Inc., which owns 92 percent of the service, disclosed the company’s auditor has “substantial doubt” about its ability to stay solvent. Helios & Matheson reported on May 15 that it lost more than $30 million a month in the first quarter of 2018. More worrisome, it had $43.4 million in cash at the end of April—enough to cover just a few months at its recent cash-burn rate. Michael Pachter, an analyst at Wedbush Securities Inc., warns that MoviePass may not survive the summertime run of blockbusters.