MoviePass, the beleaguered theater subscription service, lauded its achievements Wednesday even as shares of its parent company plumbed fresh lows.
After reporting ballooning losses Tuesday, parent Helios & Matheson Analytics Inc. issued a celebratory statement marking the year since it bought MoviePass. Despite financial troubles, the service has attracted millions of subscribers with the promise of seeing movies in theaters for $9.95 a month.
“Measured by number of movie tickets sold, we are the fourth-largest theater chain in the country without any brick-and-mortar locations or screens,” said Mitch Lowe, chief executive of MoviePass. “It’s an amazing milestone considering we feel like we’ve just begun.”
The long-term viability of MoviePass is still unclear. In a filing, auditors questioned its ability to keep operating over the next year.
The company’s aggressive pursuit of new subscribers — they now exceed 3 million — led to a huge cash drain, but its existence led theater chains to offer their own subscription plans. Some analysts now wonder if the possible demise of MoviePass will lead to lower ticket sales for theaters.
Helios & Matheson shares slipped 4% on Wednesday to less than 5 cents. The stock has lost almost all of its value this year.
To stem the cash drain, MoviePass rolled out a new model Wednesday that limits subscribers to three movies a month, less than what major exhibitors now offer. The change will cut the cash deficit by about 60%, the company said.
In its announcement, MoviePass said it accounts for 6% of all movie tickets sold in the United States in any week and has bought more than $450 million worth of tickets in the last year. It said it has partnered with two major studios and 10 distributors, without naming them.
A critical issue for MoviePass is that it continues to sell subscriptions at a loss, paying theaters full price for tickets while offering customers the opportunity to see three films a month for less than $10 total. Subscription sales totaled $72.4 million last quarter. Its other revenue sources — the hoped-for share of ticket sales and concessions from theater owners or advertising revenue — came to less than $2 million.
Overall, Helios & Matheson reported a second-quarter operating loss of $126.6 million, compared with a $2.74-million deficit in the year-earlier period.