MoviePass, the subscription-based movie ticket service, was forced last week to borrow $5 million after the idea reported the idea could not pay its bills, raising brand new questions about the embattled company’s viability.
Helios along with Matheson Analytics, its parent company, said in a regulatory filing on Friday that will MoviePass had experienced a ”service interruption” the day before because the idea could not make ”required payments to its merchant along with fulfillment processors.”
In a message to subscribers on Friday, the company’s chief executive, Mitch Lowe, apologized for the outage, during which some of its three million subscribers could not check in to see movies, along with said the service was ”up-along with-running with stability at 100%.”
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the idea’s far by the 1st time MoviePass has dealt with technical glitches along with unexpected shifts in service. yet after the outage, observers on Sunday sharpened their criticism of the company, which in 2011 set out to transform the industry amid rising theater ticket prices along with increased competition by movie streaming services.
Michael Pachter, a research analyst at Wedbush Securities, is usually one of the critics who has said the $10 MoviePass charges its subscribers per month, for which they can see one movie at a participating theater per day, does not come close to covering its costs.
A movie ticket costs roughly $10, so if a subscriber saw more than one movie per month, the company could likely lose money, he said.
In April, the company disclosed to regulators that will the idea was losing roughly $20 million per month since September, along with that will auditors, citing ”significant net losses” along with problems with capital, doubted its ability to continue.
Movie theater companies are introducing their own subscription plans. In June, AMC began offering a plan called AMC Stubs A-list that will will allow subscribers to see three movies a week for a monthly fee of $19.95.
Mr. Pachter predicted last week’s outage will not be the last to affect MoviePass.
”The $5 million was that will last breath of oxygen,” Mr. Pachter said on Sunday. ”along with currently we’re deciding if we’re going to cut off their oxygen.”
Neither MoviePass nor Helios along with Matheson responded to requests for comment on Sunday.
In previous interviews with The brand new York Times, Helios along with MoviePass executives said they had access to financing that will could keep the company afloat.
The company has grown since last year to three million subscribers by 20,000 after the idea slashed its monthly cost, though a consulting firm estimated that will nearly one-third of MoviePass subscribers believed the service could not last.
”We love the idea that will everybody thinks that will we’re going to fail,” Mr. Lowe told The Times in April. ”the idea’s exactly what people told us at Netflix along with Redbox. along with then suddenly they all turned around along with realized we were too big to stop.”
Mr. Lowe was an executive at Netflix by 1998 to 2003 along with served as president of Redbox, the DVD rental company, by 2009 to 2011.
Mr. Lowe thinks MoviePass’s increased subscriber base can help buoy the company along with that will the idea will eventually make money by striking bulk ticket pricing partnerships with theaters along with charging studios fees to promote brand new films to members, among some other strategies.
The same optimism rippled through Mr. Lowe’s message on Friday to MoviePass subscribers, though he declined to share the reasons behind the outage.
He wrote that will the company’s mission was to make ”moviegoing accessible to everyone along with to enhance the power of discovery — yet we need your support as we refine our design for the long-haul.”
Eddie Yoon, founder of EddieWouldGrow, a think tank along with advisory firm on growth strategy, said MoviePass is usually on a ”razor’s edge.”
Mr. Yoon, who has written about MoviePass for the Harvard Business Review, said the outage last week should prompt the ticket service to change its strategy, possibly by cutting costs along with culling some of its users.
”I almost believe that will they’re going to have to do something rash or significant,” Mr. Yoon said.
Mr. Pachter, however, believed the outage signified the ”end of the end.” He pointed to a troubling line in Mr. Lowe’s message that will said ”certain movies may not always be available in every theater on our platform.”
On Saturday, the company said on Twitter that will customers continued to have problems checking into movies, one day after Mr. Lowe indicated the service was stable.
”We are very sorry to users having issues checking-in This particular evening,” the company said.