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MoviePass' owner lost $130 million last quarter, as it saw a 'significant decline' in subscribers and 2 more board resignations (HMNY)
MoviePass' owner, Helios & Matheson, released its quarterly report and it wasn't pretty. Approximately $130 million loss and there was a "significant decline" in subscribers.
MoviePass' owner, Helios & Matheson Analytics (HMNY), released its third-quarter filing on Thursday, and it wasn't pretty.
The company reported that it lost approximately $129.6 million for the three months ending September 30 (the same time last year it had a loss of $43.5 million). The filing said the cause of the losses were HMNY's ownership of movie-ticket subscription service MoviePass and its assets MoviePass Ventures and MoviePass Films, which invest in movies.
HMNY also reported that MoviePass saw a "significant decline" in subscribers in the quarter. Though it did not release any specific subscription numbers, HMNY blamed the decline on "substantial changes" made to MoviePass' service. Those included the change at the end of the summer that limited customers to seeing only three movies per month (from its one per day), and the removal of certain movies and showtimes from the app. The service has also suffered numerous technical issues in the past few months. The company said this subscriber decline resulted in an "impairment charge" of $38 million.
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Also of significance in the filing was the announcement that two members resigned from MoviePass' board of directors in October. On October 24, Christopher Kelly and Maria Stipp handed in their resignations. Kelly had been the chairman of the board since 2014, while Stipp had been on the board since the beginning of this year. According to the filing, both expressed they felt they had not "received sufficient access to information regarding the Company’s preliminary approval of a plan to create MoviePass Entertainment and potential distribution of MoviePass Entertainment common stock to the Company’s stockholders."
Former board member Carl Schramm resigned in August and blasted HMNY in a letter on the way out.
HMNY said it expects to continue to incur net losses and have "significant cash outflows" for at least the next 12 months, according to the filing.
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