Home Tech MoviePass, the endless fall of the "Netflix of cinemas"

MoviePass, the endless fall of the "Netflix of cinemas"

$ 0.0093. This is the share price of the American company Helios and Matheson, owner of the MoviePass application that tried to "Uberise" theaters in 2017 in the United States by launching an unlimited pass sold from 9, $ 95 a month.

Result, Helios and Matheson no longer has the right to quote on the stock market and will be ejected from Nasdaq on Wednesday, according to a document from the SEC (Securities and Exchange Commission), the US stock policeman. The reason ? The stock is worth less than $ 1 for months and is therefore below the minimum threshold required to be listed.

Since last summer, the title of Helios and Matheson is indeed a "penny stock". In 15 months, the stock plunged 94%, raising the market capitalization from $ 316.4 million to $ 18.6 million.

(C) Bloomberg screenshot
(C) Bloomberg screenshot

More than 3 million subscribers

Created in 2011, MoviePass had a very positive buzz at the launch of its offer a year and a half ago and was perceived as the "Netflix of the cinema". Between December 2017 and August 2018, the group saw its number of subscribers increase from 1 million people to 3.2 million.

But the application is always looking for a viable economic model; the company buys cinema tickets at the normal price and sells its subscriptions at a loss. A situation that has significantly degraded the finances of its parent company Helios and Matheson, initially positioned in the analysis of data, and became the majority shareholder of MoviePass in 2017.

The group burns a considerable cash. " Cash used in operating activities was $ 219.2 million over the six months of 2018 ending at the end of June, compared to $ 4.9 million […] over the six months of 2017 ending end of June 2017 ", It is mentioned in the last half-yearly results of the group.

Revision of the offer

By mid-2018, Helios and Matheson had seen its revenues jump to $ 124 million (of which $ 120 million from MoviePass subscriptions) in the first half of the year, up from $ 1.1 million a year earlier. But for a net loss of nearly 110 million, against 12 million in 2017 over the same period …

Since then, the group has revised its offer by limiting in particular to three per month the number of films that subscribers paying $ 10 monthly, (which constitutes nearly 85% of its user base), can go to see the dark rooms. A measure that has not reassured Wall Street.

To top it off, New York State opened an investigation into Helios and Matheson in October, suspecting the company of misleading investors on its financial results. Hard to imagine that the story ends in "happy end".

Nicolas Richaud


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