Just when you think MoviePass could not have gone down in brighter flames, the parent company of the defunct subscription service has been forced to formally acknowledge all of the money they managed to lose, which is a bit higher than they initially let on.
The service’s owners Helios & Matheson originally reported net losses of $137.2 million for the quarter ending in September of 2018. After further scrutiny, that number was adjusted to $146.7 million. The company also had to revise the numbers from the previous three fiscal quarters, restating their originally reported deficit of $246.9 million to more accurately reflect the $256.4 million of actual losses - just a pesky $10 million difference.
The discrepancies don’t stop with the losses; the company failed to accurately report their revenues, as well. What was originally reported as $81.3 million in gains has since changed to $74.7 million. Helios & Matheson claim the glaring fallacies were due to an “erroneous recognition of up to approximately $5.9 million of revenue from certain MoviePass subscriptions that were in a suspended state due to changes made to the MoviePass subscription service that had not yet been consented to by the applicable subscribers.” The company also left out a significant amount of refunds that were issued after the service started to show signs of turmoil, such as the mass blackout last July.
MoviePass garnered mass appeal through an ultimately unsustainable business model that sold an unlimited movie-going experience at just $10 a month. When the company started to run out of money, they attempted to right the ship with price hikes and new services. But once your consumers get turned away at a matinee showing Incredibles 2, the damage is already done. This new development seems to nicely compliment the company’s currently ongoing investigation for fraud by the New York attorney general.