Movie subscription service MoviePass, which is controlled by Helios and Matheson Analytics Inc. (NASDAQ: HMNY), announced new pricing plans for its subscription service that the company hopes will save it from delisting and ultimate failure.
The new plans all offer three movies a month and prices vary by region of the country for each plan. Depending on a subscriber’s region, the basic Select plan does not include opening weekend viewing (that comes with the All Access plan) or an option to see one movie of the allotted three in large formats like IMAX or RealD 3D (the Red Carpet plan). Select plans are priced at $9.95, $12.95 and $14.95 a month in the company’s three regions. All Access plans cost $5 more per month, and Red Carpet plans cost either $9 or $10 more per month, depending on the region.
The fundamental flaw remains that MoviePass must pay the theater the full ticket price. On the lowest priced Select plan, a ticket price of $10 means the company loses money if the subscriber goes to even one movie a month. The loss mounts with each movie viewed.
Last summer, the company said that its business model all along was to sell the data it collects on subscribers to drive advertising sales and box-office sales. The model has not been working because studios aren’t interested in paying for the data.
Last July Wedbush Securities managing director of equity services told The Wall Street Journal:
This is a terrible business model. … The studios aren’t yet buyers, and if they ever become buyers, they’ll go to the exhibitors first.
Those exhibitors include AMC, which kicked off its own subscription service, Stubs A-List, last summer. Exhibitors can afford to make this offer because their payment to the film’s distributor is about half the ticket price and they can also make money on concession sales, something that MoviePass can’t match. AMC’s subscription service costs $20 a month and includes viewing three movies a week, an offer MoviePass can’t possibly match.
The new MoviePass plans are effective beginning January 1, and the company is also making limited-time holiday discount offers for subscribers willing to pay for 12 months in advance. The holiday offers begin today, December 6.
Helios and Matheson stock traded up as much as 16% this morning at $0.0192 per share.