MoviePass has less than 1 month of cash on hand. Not looking good for the future of the company.
MoviePass Owner's Cash Runs Low With $9.95 Monthly Deal Taking Toll
The clock may be ticking for MoviePass Inc. and owner Helios & Matheson Analytics Inc.
Helios & Matheson said in a filing Tuesday that it had just $15.5 million in cash at the end of April, and the firm has been going through about $21.7 million a month. It also has $27.9 million on deposit with merchant processors.
The revelation sent shares of the technology company down 32 percent -- and sparked fresh concern about whether its MoviePass business can survive.
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Since MoviePass doesn’t have its own supply of movie tickets, it has to buy them from the theaters. That’s expensive, and there’s no easy way to recoup the costs.
The biggest movie-theater chain in the U.S. provided a glimpse this week at just how tough that proposition is. AMC Entertainment Holdings Inc. said on a conference call that
MoviePass has been buying hundreds of thousands of tickets from the chain at about $12 apiece on average. And the subscribers are attending nearly three movies each month: They went 2.62 times in March and 2.75 times in April.
That implies a loss of over $20 per customer each month. To be sure, not all members are using AMC theaters -- and in many parts of the country, it’s cheaper to see a movie. The average U.S. ticket price is just over $9.
Even so, AMC Chief Executive Officer Adam Aron thinks MoviePass is unsustainable.