Dr. Brian Blank Weighs In on the Spectacular Rise and Fall of MoviePass on MarketWatch
7-26-18 - Dr. Brian Blank, Assistant Professor of Finance, is featured in a recent article on MarketWatch, which examines the spectacular rise and fall of MoviePass. Below is an excerpt of the article.
"MoviePass majority shareholder Helios and Matheson Analytics Inc. was on top of the world last October, its share price shooting up to $32.90 from $2.50 in less than a month. The company had just amassed a large stake in the MoviePass service, which, under the Helios umbrella, was rapidly adding new members and winning praise from investors who saw the service as the next big thing in film viewing.
Under the MoviePass model, members pay $9.95 a month to enjoy up to one movie a day. The company pays full price for each ticket that a subscriber orders, which means it’s almost impossible for MoviePass to make a profit from the subscription service itself. The more subscribers go to the movies, the more money the company loses.
But MoviePass has made it clear it isn’t banking on subscriber revenue to make itself profitable. Its hopes are pinned on the potential of user data. The company believes its rapidly-growing subscriber base will provide a trove of data that can be used to sell advertisements and help drive box-office revenue, allowing the company to strike revenue-sharing and bulk-ticket deals with studios and cinemas."
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