![]() For only a 20-dollar activation fee and $6.95 a month, someone can see as many films as they want as MoviePass picks up the tab. There are a lot of concerns over the sustainability of MoviePass, mainly due to its very low cost. However, this massive level of growth at all costs does not always correlate with shareholder value. With over 5 million people having a MoviePass, Helios and Matheson will have an immense amount of bargaining power over advertising agencies, movie production companies, and the theaters themselves. If this target is hit, then it is estimated that roughly 1 in 5 tickets in the country will be paid for by a MoviePass. ![]() By the end of the year, MoviePass has estimated that its total subscribers will surpass 5 million. The true number of users currently is unknown, but it is almost certain that MoviePass has only added users since January. Currently, we know that over two million people have signed up for MoviePass as of the start of February. Since August, the number of MoviePass users has increased at an exponential rate. To make things even better, the same data showed that simply having a MoviePass doubled the foot traffic in theaters. Research done by MoviePass itself showed that MoviePass users spent roughly 123 percent more than regular customers on concessions. ![]() If people do not spend money on the ticket then they should, in theory, be more likely to spend money on concessions. Concessions are the primary source of profits for a lot of movie theaters, and Helios wants to use its subscriber base as leverage. Not a bad idea, but it doesn't stop there. Helios thinks that the viewing habits of its customers is valuable information, and can be used by both production companies and theaters to maximize foot traffic. The plan that Helios has is interesting, it wants to harness the data from its user pool and sell it to movie theaters and producers. Right now, this business model is simply unsustainable from a cash flow perspective. There are only a few restrictions in place with using a MoviePass, with some notable ones being that you can only see movies in non-specialty formats and that you cannot purchase tickets in advance MoviePass is only accepted in roughly 91 percent of theaters too. For only $6.95 a month, users can see an unlimited amount of films in select theaters. It owns a majority stake in MoviePass, a private company which offers a subscription-based movie ticketing service. Although Helios and Matheson is just a data analytics company, it has a special weapon under its sleeve which differentiates it from other data companies. Helios and Matheson Analytics ( OTC:HMNY) is an interesting company, with an interesting idea to become the Netflix ( NFLX) of the movie industry. ![]()
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