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MoviePass Price Change and Potential Buyout Offer

Recently Helios and Matheson Analytics Inc. (NASDAQ: HMNY) released a theatrical subscription service called MoviePass which allows users to pay a monthly fee in return for movie theater tickets.  The MoviePass has acutally seen some great success in terms of subscriptions since they changed their business model in 2017, reaching 1.5 million subscribers by March of 2018.  Just today a few key findings have unfolded with MoviePass: a change in pricing and a possible change in ownership.  The news, although both positive and negative, has led to gains of up to 30% today!

When they acquired MoviePass, Helios and Matheson believed that consumers do in fact want to go to the movies more often, but are often deterred by constantly rising ticket prices.  To disrupt the market MoviePass set out to provide a service for all who want to go to the movies a few times a month without breaking the bank.

The original concept called for a $9.95 per user monthly subscription, which allowed them to see one movie a day at theaters nation wide.  Unfortunately, upon launch it seems that the $9.95 per user unlimited model was not quite workable financially and in the long term.  Upon some brainstorming, MoviePass released its plans to bump the price up about $5 and keep the viewings as unlimited.

This decision was not taken kindly by the consumers and subscribers, which caused MoviePass to reevaluate its new pricing structure.  Due to potential backlash and also to ultimately create a stable model for growth, MoviePass took back it’s $5 raise idea, kept the price the same, and now limits the number of movies one can see a month to 3 total.

As all of this is unfolding, Triton Funds LLC, a student-run fund out of UC San Diego, announced they are finalizing their evaluation and plan to make a proposal for MoviePass as they see a future in subscription based theatrical services.

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