As shareholders approve a new plan to revive its struggling stock, MoviePass and its parent company Helios & Matheson (HMNY) continued to make bold promises to disrupt the movie theater industry at an investor meeting in New York this week.
“Make no bones about it, it is a full blow war going on, especially with AMC,” said Helios & Matheson CEO Ted Farnsworth according to Business Insider, referencing MoviePass’ ongoing feud with AMC Theaters.
The CEO of the nationwide theater chain, Adam Aron, has repeatedly called MoviePass’ $9.95/month, ticket-per-day subscription plan “unsustainable” in interviews and earnings calls, as AMC has launched their own competing plan with a price point double that of MoviePass but with extra perks like premium format screenings at no extra charge.
MoviePass, meanwhile, has begun rolling out IMAX and 3D screenings at an extra charge on their service as well as other perks like advanced ticketing at partner chains. But it has also come with a new “peak pricing” model that charges users extra to attend screenings of high-demand films, particularly on their opening weekend.
But despite that new caveat, Farnsworth said that MoviePass — which he says is still on pace to reach five million subscribers by year’s end — is gaining a foothold with moviegoers and influencing where they go to watch movies.
“We know with all the independent research that’s out there, if we ask somebody to go to a Regal instead of an AMC, 50 percent of the time they’ll go to Regal,” said Farnsworth. “They realize that at the end of the day we’re gaining all this power with the consumer base. That was always the play, having leverage over the theaters.”
This confidence hasn’t wavered since MoviePass first rolled out their bargain price point a year ago. But on Wall Street, Helios & Matheson’s stock has collapsed from a high of $38.52 last fall to just nine cents on Tuesday, risking removal from the NASDAQ index. To prevent this, Helios & Matheson’s shareholders approved plans to increase the company’s stock shares tenfold from 500 million to five billion shares.
Shareholders also approved a proposal to grant the company the option to perform a “reverse stock split,” which would allow the company to consolidate shares at a ratio anywhere between 2-to-1 to 250-to-1. Both motions were approved by approximately 74 percent of the shareholders who participated in the vote on Monday.
Farnsworth insists that MoviePass would begin seeing profits on its own once it reaches the five million subscriber mark. He also pointed out that the company is developing other revenue streams like distribution wing MoviePass Ventures, which co-distributed the Sundance movie “American Animals” with The Orchard. The film has made $2.7 million from its limited theatrical run.
“We are obviously in a place where this company has grown so quick so fast that it continues to need money, especially for MoviePass.” Farnsworth said. “It’s a fastest-growing paid subscription ever in the history of the internet — period, so you’re not going to go through that without headaches.”