MoviePass has always seemed like it’s too good to be true, partly because paying the flat rate to see as many movies as you want is a surprisingly good deal and partly because the companies that make movies and run theaters absolutely hate it, but a Variety report suggests that MoviePass might not have much time left anyway. Apparently, “an independent auditor” has raised “substantial doubt” about the future of MoviePass, with its parent company, Helios & Matheson Analytics, admitting that it lost over $150 million in 2017 after it acquired MoviePass. (The company lost $7.4 million before MoviePass came along, so the implication is clear.)
MoviePass CEO Mitch Lowe has claimed in the past that his company will become profitable in 2019, but it also loses money every time someone uses the service because it tends to pay full price for the subsidized tickets its subscribers are getting through their app. MoviePass has more than 2 million users, most of whom presumably like to use their MoviePass cards to see movies, which means the company needs to find a serious way to bolster the “other sources of revenue” it has.
The Variety story notably doesn’t say what those other sources are, but at least we can be reasonably sure that MoviePass isn’t pulling a Facebook and selling user data to the highest bidder. It would probably be a little more profitable if it did do that, since Russian operatives and online retailers would pay a lot of money for the phone numbers and shopping habits of 2 million people, but it would probably start losing some of those subscribers if it did that.