MoviePass‘ woes continue with their latest antics including a dramatic slashing of subscriber offerings in an effort to slow their cash-burn rate while also reportedly un-cancelling subscriptions, much to former users’ frustration. Yet the service still shows no signs of achieving sustainability no matter what, and the latest development involves MoviePass’ newly reported second-quarter loss that makes it difficult to believe recovery is possible.
CNBC reports that Helios and Matheson Analytics (the parent company of MoviePass) has posted a $104.6 million loss for the second quarter, which brings the subscription service’s total operational loss over $126 million. Here’s the damage:
Helios and Matheson doesn’t break out specific revenue for MoviePass, but said the decline in quarterly profit is “primarily due to operating expenses of MoviePass.”
MoviePass is contributing tens of millions in additional revenue for the Helios and Matheson — it’s just burning cash at a much faster rate. Total operating expenses for Helios and Matheson increased by 1,000 percent year over year during the second quarter, pushing total losses from operations past $126 million.
Deadline adds that angry shareholders have greeted this news by filing a simultaneous class-action lawsuit in an effort to recover their cash. Naturally, the suit’s language includes “unsustainable” and accuses the parent company of having “no reasonable basis to believe MoviePass could monetize the model” without “being too buried in debt to survive.” There’s no explanation of why anyone would purchase stock in a service that appears so messy on paper, but that’s probably beside the point by now.
And this has been your latest installment on how CEO Mitch Lowe has helmed a series of disastrous decisions including distributing Gotti, but on Wednesday morning, he told Fox Business that a million new subscribers have signed onto the service since the price hike and offering slash happened. Really?