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MoviePass Having Outage Issues Because It Couldn't Pay Its Bills (cnet.com) 100

Posted by msmash from the well-that's-embarrassing dept.
Popular movie-ticked subscription service MoviePass experienced an outage on Thursday, still ongoing for some, which the company attributed to "technical issues with our card-based check-in process," on its Twitter feed. But its SEC filing Thursday indicated that the problem was really cash flow. From a report: The filing by its parent company, Helios and Matheson Analytics, explained an emergency loan the company had taken out: The $5.0 million cash proceeds received from the Demand Note will be used by the Company to pay the Company's merchant and fulfillment processors. If the Company is unable to make required payments to its merchant and fulfillment processors, the merchant and fulfillment processors may cease processing payments for MoviePass. ("MoviePass"), which would cause a MoviePass service interruption. Such a service interruption occurred on July 26, 2018. Such service interruptions could have a material adverse effect on MoviePass' ability to retain its subscribers.
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MoviePass Having Outage Issues Because It Couldn't Pay Its Bills More

MoviePass Having Outage Issues Because It Couldn't Pay Its Bills

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  • I think I have seen this movie before. (Score:5, Funny)

    by sinij ( 911942 ) on Friday July 27, 2018 @12:31PM (#57019810)
    I think I have seen this movie before.
  • I suspect that

    Popular movie-ticked subscription service

    Should be

    Popular movie-ticket subscription service

    Unless MoviePass has been causing such commotion that the movies themselves are now angry at the service.

    • Unless MoviePass has been causing such commotion that the movies themselves are now angry at the service.

      Moves, no. Theaters, yes. I joined the AMC program to see up to three movies per week in any format (i.e., 2D, Real3D, IMAX and Dolby) and other features for $20 per month. I got a postcard for the Cinemark program with one free movie and other features for $10 per month. The theaters have one advantage that MoviePass doesn't have: they make more money from concession sales than ticket sales.

  • Math is hard (Score:5, Funny)

    by Drunkulus ( 920976 ) on Friday July 27, 2018 @12:36PM (#57019852)
    They charge people 10 bucks a month, then buy those people as many movie tickets as they want. How can this possibly lead to financial problems?

    • Re: (Score:3)

      by mysidia ( 191772 )

      They charge people 10 bucks a month, then buy those people as many movie tickets as they want.

      "But we'll make it up in volume," right?

      Not exactly... they have added more restrictions and cost for the subscriber a few times, and certain early releases may require the customer pay something. I think their end goal is to be something most people subscribe to and forget to unsubscribe from, but their fees do have to be high enough to coverage the costs of the average person.

      If they want to survive --- Movi

      • Re: (Score:1)

        by Anonymous Coward

        MoviePass also sells advertisements and attempts to track their users.

        I suspect that they were also hoping to work out a discount from the larger movie theaters in exchange for incentives for MoviePass users to buy concessions.

        What really happened is that a lot of MoviePass users -- like my friends and I -- just went to more movies, with no discount, and the movie theaters did not see a significant increase in secondary purchases (e.g., popcorn). Even worse for MoviePass, I got an annual pass for less than

        • It wasn't just to prevent people selling the tickets. I heard reports that some people were using MoviePass to buy tickets for movies they had no intention of watching just to get the loyalty points from the theater. If it was an urban theater near your place of work that was rather painless to do.

    • Re: (Score:1)

      by Anonymous Coward

      My guess is that the theaters imagined it would mean more revenue in the form of snacks, since ticket sales are already eaten by the cost of getting a copy of the film. Then again, if someone is cheap enough to use the app rather than buy movie tickets, they're also probably not buying snacks/probably sneaking them in.

      I'm also guessing that the data they were mining with the app wasn't valuable enough to recoup the losses.

      • Re: (Score:2)

        by GTRacer ( 234395 )
        Actually, because we're paying maybe half what we were before for movie tickets, we are buying drinks or popcorn more regularly. We still bring our own sometimes but will often add on a concession item.

      • Re: (Score:1)

        by Anonymous Coward

        My guess is that the theaters imagined it would mean more revenue in the form of snacks, since ticket sales are already eaten by the cost of getting a copy of the film. Then again, if someone is cheap enough to use the app rather than buy movie tickets, they're also probably not buying snacks/probably sneaking them in.

        Yes, but, the biggest problem with Movie Pass is the success of their business depends on people not using it.

        The only way they make money is if a large number of people pay the monthly subscription but then don't go to any movies. Which makes absolutely no sense. You don't sign up for a monthly movie ticket subscription unless you want to see a lot of movies.

        Movie Pass is still trying the Dotcom Bubble 1.0 scam

        Start a stupid business
        Take millions from investors
        Pay yourself a lot of money
        Fail
        Lather, Rinse

      • Re: (Score:2)

        by tlhIngan ( 30335 )

        My guess is that the theaters imagined it would mean more revenue in the form of snacks, since ticket sales are already eaten by the cost of getting a copy of the film. Then again, if someone is cheap enough to use the app rather than buy movie tickets, they're also probably not buying snacks/probably sneaking them in.

        That's only if MoviePass worked with theatres. Surprisingly, no theatre chain is working with them, and AMC blocked acceptance of MoviePass completely.

        The thing is, MoviePass just has the wron

        • Re: (Score:2)

          by sconeu ( 64226 )

          AMC blocked acceptance of MoviePass completely

          My MP app currently shows two AMCs on its list.

        • There's one huge problem with your theory: theaters already offer big discounts for particular days of the week. I can see a movie that's been out less than 2 weeks on a Tuesday for $5, if I see the same movie on a Saturday it's $12.75. If they can give people a 60% price cut because it's Tuesday, they could clearly give MoviePass a 60% price cut for similar draw reasons. If they're paying the studios $12.75 for the ticket I pay $5 for on a Tuesday, I would be rather shocked by that and I pity them their lo

        • There are a few theater chains that MoviePass is working with directly, mostly the ones with e-ticketing options. Landmark Theatres is one. But they don't have any special deals with the big players like AMC, Regal, and Cinemark.

      • Re: (Score:2)

        by Jaime2 ( 824950 )
        Nope. The theaters are against MoviePass and are refusing to enter into any types of arrangements. That's why MoviePass subscribers can't get reserved seats at most theaters. At first the theaters said it was because the whole concept of MoviePass was repugnant to them and devalued the service they provide. Now that both Regal and AMC have their own competing service, it's obvious that the theaters really don't want to help the competition. Either way, MoviePass isn't getting any special treatment and seems

      • Re: (Score:2)

        by Straif ( 172656 )

        From my understanding MoviePass isn't actually associated with the theaters themselves so they get no share in the concession sales. They wanted to be the defacto theater subscription service but the various chains figured they could skip the middle man and just offer their own services. The theaters have the advantage that they do make money on concessions so just getting a person in the door is a win for them.

        MoviePass wanted to be the Netflix of movie tickets but they were looking at the streaming mark

    • Being that especially for movies that have been out for a while. The theater is playing for a small crowd, they will even play the movie if no one is there.

      That is where everyone can make money.

    • Re:Math is hard (Score:5, Interesting)

      by Nidi62 ( 1525137 ) on Friday July 27, 2018 @12:56PM (#57020004)

      They charge people 10 bucks a month, then buy those people as many movie tickets as they want. How can this possibly lead to financial problems?

      They're owned by an analytics company. The goal wasn't to make money on the passes, it was to make money on the data. Where you go/what you do before/after a movie, broken down by age ranges, race, income level, location, all of that could potentially be sold to movie chains, restaurants, etc. MoviePass either underestimated how much money they would burn through until the data selling business became sustainable, or overestimated how quickly that would happen. Either way, no big loss. If the tech sector crashes, this will be why: data isn't worth as much (or as useful) as people think it is.

      • Re: (Score:1)

        by Anonymous Coward

        The goal wasn't to make money on the passes, it was to make money on the data

        Maybe when the analytics company became a majority owner in August 2017, but the company existed for six years before that. More to the point, you're selecting the wrong error- they underestimated the intransigence of the theater chains in working with them, and how easy it would be to co-opt the model.

        Have you seen Cinemark's membership thing? Sure, it's not 'see a zillion movies for $10' but it is 'pay us for a great deal, and

      • Re:Math is hard (Score:4, Interesting)

        by Schnapple ( 262314 ) <tomkidd@gmail . c om> on Friday July 27, 2018 @03:19PM (#57020766) Homepage
        I agree that part of their plan was tracking their users, especially since the CEO bragged about it [slashdot.org], but then they had to shut down that part of it [variety.com] when people complained, later calling it a glitch or something.

        The other part of it, and I think this is the real key, is that MoviePass got tired of being a small fish in a nonexistent pond and decided to go huge in the hopes of being bought by someone else and having it be their problem. YouTube, for example, was hemorrhaging money because their bandwidth costs were doubling every single month. And then Google bought them and that became Google's problem (which wasn't a problem because Google has no problem getting the bandwidth it wants). I think MoviePass was hoping someone would buy them, either for the data part or to shut them down, and either way the founders cash out and leave.

        I do have to say that the thing I despised about MoviePass was that anyone with half a brain could see either they were up to something or they were going to go out of business fast. This would be like paying a $20/month fee and getting a card that will pay for all the gas your car ever needs. Something doesn't add up here. But whenever you'd tell anyone they'd treat you like you were some asshole who wanted to ruin everything. And reading all these people who experienced surge pricing or who couldn't get their app or card to work or who had to photograph ticket stubs like they were submitting some corporate expense report... I'm glad I never signed up or bothered with it. They're going to be dead by the end of the week at this rate.

        • This would be like paying a $20/month fee and getting a card that will pay for all the gas your car ever needs.

          For most people, gas for their car is a necessity. Going to the movies is not. Besides selling analytic data, I believe they hoped to make money like Netflix did back before they had streaming. I paid for Netflix monthly, and after I while I just couldn't be bothered to keep track of what DVDs I had and what was in my queue and keep circulating them fast enough. So I only ended up, on average over many months, viewing a few movies a month. It would have been cheaper for me to rent them locally.

          If every

    • Just like Amazon circa 1999, they will make it up on volume

    • They charge people 10 bucks a month, then buy those people as many movie tickets as they want. How can this possibly lead to financial problems?

      And which idiot funds the kind of business that god forbid doesn't want to have too many customers...

  • Facebook profits... (Score:4, Funny)

    by b0s0z0ku ( 752509 ) on Friday July 27, 2018 @12:37PM (#57019860)
    Facebook earnings miss, MoviePass failing, Twitter missing targets, looks like the tech chickens are flying home to roost. It's about time the ad-targeting, location-tracking, "tech" bubble goes "phut." Party like it's 2001?

    • Re:Facebook profits... (Score:5, Insightful)

      by Discgolferusa ( 711112 ) on Friday July 27, 2018 @12:50PM (#57019950)
      Makes me long for the good old days of Pets.com..... Man I miss that sock puppet!

      • Re: (Score:1)

        by Anonymous Coward

        I miss that sock puppet too, the one we have in the white house is annoying as hell!

      • Chewy.com, sure takes you back. Selling bags of dry dog food over the net again.

    • Re: (Score:1)

      by Anonymous Coward

      My thoughts exactly... too much stupid VC money being thrown around. Also, too many young'ns that don't remember the last used Aeron fire sale.

    • Hey... Where's my Aeron chair as severance?! my 2001 model finally gave out.

  • Cnet.com

    may cease processing payments for MoviePass, Inc. ("MoviePass"), which would cause a MoviePass service interruption.

    Slashdot

    may cease processing payments for MoviePass. ("MoviePass"), which would cause a MoviePass service interruption.

  • WHICH merchant service provider? (Score:3)

    by ScentCone ( 795499 ) on Friday July 27, 2018 @12:43PM (#57019912)
    Which foolish merchant service provider isn't taking their cut at the time they run the charge and/or prior to remitting the cash to the retailer? How can Movie Pass have to pay them after running transactions? Or maybe they struck some sort of deal that avoids a huge number of small transaction fees, replacing that with one big monthly bill for services. But that would be very unusual, especially when dealing with a young, financially questionable business model. Card processors take their cut up front for a reason - because otherwise they'd get burned all the time.

    • Re: (Score:1)

      by aix tom ( 902140 )

      I hear it's "PayPass", an aspiring new company which offers subscription bases payment processing based on the numbers of your customers and per month, not based on individual transactions. It will either be the Next Big Thing (TM) or a complete and utter failure.

  • Stock price says it all (Score:3)

    by Nidi62 ( 1525137 ) on Friday July 27, 2018 @12:51PM (#57019962)
    According to a CNN article about this, if MoviePass hadn't done a reverse stock split (ie, merged stock shares), it's current value would be roughly 1.5 cents (at the time that article was published, the share was at $3.50, it's now dropped to $2.50). MoviePass is a penny stock.

  • Wow (Score:5, Funny)

    by 93 Escort Wagon ( 326346 ) on Friday July 27, 2018 @12:56PM (#57020000)

    Glad I was sitting down before I saw this. The shock is overwhelming - news like this coming completely out of the blue.

    If MoviePass can fail... how can I have confidence in *anything*?

    • how can I have confidence in *anything*?

      Well, sir, your post ID ends with 20000, making you unique to the degree of one in ten thousand. I guess there's that.

  • Every time I see a story about them I tell myself, "Hey, self, you've got to remember to sign up for this! It sounds like a great deal." Looks like this may be my last chance to sign up.

  • 5 million? (Score:3)

    by sqorbit ( 3387991 ) on Friday July 27, 2018 @01:20PM (#57020122)
    According to sources from other articles MoviePass loses (or could lose) an estimated 21-45 million per month. The range seems to vary depending on source, but even at the low end that's a lot of money bleeding out of that company. What is 5 Million going to do that to stop that amount of bleeding? Why would a fund lend that amount to a company they know will blow through it in a matter of days with no real plan for income? MoviePass will go down as just another disaster.

  • Not a long term loan (Score:5, Informative)

    by uncqual ( 836337 ) on Friday July 27, 2018 @01:28PM (#57020176)

    Per Bloomberg, the the terms of the loan are pretty aggressive.

    The lender can demand more than $3M be repaid on August 1 and the remainder on August 5. Also, MoviePass has a planned stock sale and proceeds from that must be used to repay the loan. If MoviePass is 48 hours late in paying, the debt will increase to 130%. If they pay late, they will pay a 15% annualized late fee as well.

    • Just moviepass giving the finger to their other creditors.

      At this point, they're likely trying to payoff things like back payroll taxes. Where if they don't, they personally go to jail for theft, having withheld the taxes from employee checks.

      The bigger the number this last creditor builds up, the higher % of the liquidated assets it gets...but I doubt there is anywhere near 3 million in value there. What are they going to do? Go for one more month of subscriptions, and hope there are enough lazy peopl

  • I bought in to a yearly subscription MoviePass in March for $8/month ($100 total). I figure I needed to see 9 movies to break even. So far I've seen 15 movies. A lot of them weren't stuff I would have seen otherwise, but still enjoyed (Equalizer 2 was good, for example).

    I don't imagine they'll be around much longer. My wife wants to go see Mission Impossible this weekend, but as of now the app is reporting "a problem with our payment processing" and recommends e-tickets instead (no theaters I go to ha

  • Pivot! (Score:5, Funny)

    by edi_guy ( 2225738 ) on Friday July 27, 2018 @02:15PM (#57020444)
    Ok team, new plan. All you can watch television for one monthly rate.

  • I can't unsubscribe (Score:3)

    by Layth ( 1090489 ) on Friday July 27, 2018 @05:00PM (#57021232)

    The unsubscribe button literally does nothing in the app.
    Online it says there's a bug and to use the chat service...

    If you ask the chat service to unsubscribe it says "MoviePass is currently aware of an issue affecting check-ins to non-eticketing theaters. Our team is working hard to identify the issue and find a solution." and then i get a message stating that the conversation is closed.

    Now i've been charged for another month because I can't cancel the subscription.
    Looks like I'll have to go to the bank to cut them off o_0

    p.s. Back in the day after I signed up for movie pass they never sent me a card and I had to go to the better business bureau just to get a response from them and a card mailed out.

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