Oh, boy, here we go! This is a MoviePass story, so you know it’ll be good. Just over a year ago, the sky seemed to be the limit for subscription service. It had just switched over to a brand-new price point, promising audiences unlimited movies a month for $9.95, and its user base grew incredibly fast. After having already been around for years and only garnering around 20,000 users, its growth to over a million users in a year was astounding.
But, of course, economics was always bound to bite it in the butt, and the service pretty much lost money from every member that actually used it. While it could have eventually used its data to sell to studios or utilize in its own moviemaking enterprise, it would need to survive long enough to have relevant data. You all know how it turned out. Its service has since become a shadow of its former self, and members seem eager to cancel.
Apparently, that’s not rock bottom enough for them. CNBC is reporting that New York Attorney General Barbara Underwood has opened up an investigation on MoviePass. More specifically, they’re looking into whether or not they misled investors about their financial situation.
“We are aware of the New York Attorney General’s inquiry and are fully cooperating,” MoviePass parent company Helios and Matheson said in a statement to CNBC. “We believe our public disclosures have been complete, timely and truthful and we have not misled investors. We look forward to the opportunity to demonstrate that to the New York Attorney General.”
Helios and Matheson themselves have reported a loss of $100 million in the second quarter of the year, and according to the outlet, they’re on pace to burn through its remaining assets over the coming months.
If MoviePass hopes to survive, something big will need to change.
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