MoviePass Shutting Down, Parent Company ‘Unable To Predict If Or When…Service Will Continue’

exhibition. Where to begin to regale the tales of MoviePass? CEO Mitch Lowe (who had worked at Netflix) spearheaded a Netflix-esque all-you-can-eat pricing model for moviegoing, something that was commonplace in Europe but previously all but unknown to U.S. Created in 2011 by Stacy Spikes and Hamet Watt, the flat-price subscription movie ticket service looked to have a renaissance when tech company Helios and Matheson Analytics took a huge stake in the service in August 2017.
Helios and Matheson Analytics (HMNY), the parent company of MoviePass, announced today that they're pulling the plug on the famed monthly movie ticket subscription service which offered unlimited tickets for $9.95 a month. It's over.
HMNY today said that it formed a strategic review committee comprised of independent directors, to identify, review and explore all strategic and financial alternatives for the company. Options include a sale of the company in its entirety, a sale of company assets like MoviePass, Moviefone and MoviePass Films. Today, MoviePass notified its subscribers that it would be "interrupting the MoviePass service" effective September 14 because its efforts to recapitalize MoviePass have not been successful.
A month before the Fallout fallout that would sink the company, a MoviePass-backed film became of the worst-reviewed titles of 2018: the John Travolta mob biopic Gotti. In just the past year alone, it elicited a fraud investigation by the state of New York; restated its financial results due to accounting errors; parted ways with its CFO and top operational executive; executed unusual (and unsuccessful) reverse-splits of its stock; and doubled down on investments in film production and financing. Getting delisted — often a fatal setback for companies with HMNY's ambitions — was far from the only blemish in the checkered record of MoviePass, which became a real-time case study in mismanagement.
The theory was that the percentage of members actually going to the movies each month would be a minority, meaning the company would not have to fork over cash for tickets to fulfill orders. (Many compared this setup to the way many health clubs work.) How the company would become profitable was an immediate question in the distribution and exhibition sectors. For a time, the stock market agreed, and Helios stock traded at nearly $30 a share by late-2017. Lowe and HMNY boss Ted Farnsworth believed that rapid subscriber growth would deepen its data pool and give it leverage in Hollywood. Neither studios nor theaters wanted to give up any share of their box office to this third-party firm, which said it would ultimately profit through the use of data.
Finally, in July 2018, during the opening weekend of Mission: Impossible – Fallout, MoviePass officially blacked out. The once-high-flying HMNY stock took a swan dive and never recovered. Following the Mission: Impossible debacle, MoviePass decided it would no longer cover big studio tentpoles on their opening weekends, instead allowing only indies and holdovers. At one point MoviePass had bragged it had nearly 3M subscribers. That ratio of active users to total members didn't fall into place. Instead, the company found itself having to run up huge deficits because it had promised access to any movie and was on the hook to provide tickets and fulfill its promise. Subscriber levels dropped to 225K as of last April.
HMNY stock, which has traded over the counter since being delisted by the Nasdaq in February, closed Friday at .93 of a cent, essentially where it has been for the past few months.
"The company is unable to predict if or when the MoviePass service will continue," HMNY said in a press release. There can be no assurance that any such financing will be obtained or available on terms acceptable to the committee." "The company is continuing its efforts to seek financing to fund its operations.
Over time, each circuit started their own successful monthly subscription movie ticket programs, which were able to feed concession sales and enhance their existing data-mining operations. AMC's put a cap on the amount of tickets for $20 per month for any kind of film. Regal, like Cinemark, restricted theirs to 2-D films. As MoviePass peaked and blew up, AMC and Regal eyed it warily and, in the case of AMC's outspoken CEO, Adam Aron, took public shots at it.
I think it was largely a defensive move on their part.”” /> Despite its demise, MoviePass leaves a legacy, serving as a disruptive force that pushed entrenched theater circuits to change their ways. Imax CEO Rich Gelfond, speaking at an investor conference earlier this week, said AMC opted for the see-anything approach with its Stubs A-List subscription program “largely because MoviePass came on the landscape.
Netflix reached that milestone in 39 months. In late December 2017, MoviePass celebrated passing 1M subs in four months. To celebrate, Lowe and Farnsworth took a photo outside AMC's Empire 25 in New York, laughing at the No. Now, AMC has the last laugh. 1 chain in the world. AMC tried to sue the service and shut them down.
In July, the company had suspended the service to work on what it said were technical improvements as well as an effort to recapitalize the operation, which at its peak had burned through tens of millions of dollars a month.

Turner Offers Voluntary Buyouts To Long-Tenured Employees, Following HBO

Here is the full text of Santone's internal memo:
The makeover began in earnest once the federal government lost its appeal of a lawsuit challenging AT&T's $81 billion takeover of Time Warner. While the deal was permitted to officially close last June by a federal judge, who rejected the Department of Justice lawsuit, the appeals process restrained the company from operating as a fully merged entity. Turner is undergoing significant changes under a reshuffling announced last month by CEO John Stankey.
If you have any questions, please don’t hesitate to contact your HR Representative. We know this is an important decision for those who are eligible to participate.
In recent weeks, Turner boss David Levy, a 32-year company veteran, said he was stepping down, and the company put CNN chief Jeff Zucker in charge of Turner as well as CNN. That eight-month delay created a bottleneck, a series of announcements has been flooding out almost daily about comings and goings. Under the terms of a settlement with the DOJ, Turner remained in a silo pending the outcome of the appeal. Richard Plepler and two senior executives have left the fold at HBO, and those exits are unlikely to be the last as changes continue to take full effect.
Today, employees meeting these eligibility requirements will receive a confidential, personalized email detailing the program, its benefits, and deadlines for acceptance, which is strictly voluntary.
As WarnerMedia continues to implement its restructuring plan, select Turner employees have been offered voluntary buyouts, following the same model of the plan introduced last month by HBO.
As part of these efforts, we have decided to offer a Voluntary Separation Program to regular status U.S. Turner employees who are at least age 55 and have 10 or more years of service as of December 31, 2019, excluding on-air talent and union employees.
WarnerMedia declined to comment when contacted by Deadline.
Part of the Turner network portfolio, including Cartoon Network and Adult Swim, shifted to Warner Bros. control in the reorg., putting a greater emphasis on CNN, TNT and TBS as Turner's main profit centers. Many operations in areas like distribution and marketing at Turner and HBO have been consolidated. John Stephens, CFO of AT&T, told a Wall Street investor conference last month that the parent company would seek to shield WarnerMedia from "a finance bean-counter from a telephone company." At the same time, AT&T still has billions in debt from the Time Warner deal it is looking to pay down, as it also looks to hit announced targets of $1.5 billion in cost savings and $1 billion in synergies.
The Wall Street Journal had the first report on the Turner buyouts.
Angela Santone, EVP and head of HR for Turner, sent a memo today to employees, according to a Turner insider. Workers who accept the voluntary offer will receive four weeks' pay for every year of service, up to a limit of two years' pay. The memo outlined the opportunity for workers 55 years old and older with 10 or more years of service as of the end of 2019.
This is a very important and historic time for our company. As the industry evolves, our focus is to ensure we continue to be as successful in the future as we have been in the past. Recently, John Stankey shared his new organizational structure and strategic priorities for WarnerMedia. Across the company, we are identifying opportunities for savings to drive growth and profitability.
Angela” />

AT&T Sale Of Hulu Stake Could Net It Nearly $1B After Two Years Of Gains

Hulu, a streaming-video pioneer that has grown considerably despite an unwieldy ownership structure, is about to undergo significant change once Disney takes majority control of it in the new year.
But such a sale wouldn't dramatically reshape the ownership structure: Disney will continue to own a controlling interest in Hulu, once it completes its $71.3 billion acquisition of 21st Century Fox's film and television assets. The other joint venture partner, Comcast's NBCUniversal, will hold a minority interest. It makes sense that AT&T would look to shed WarnerMedia's minority stake in Hulu as it looks to buy down debt.
During the analyst meeting, the sale of the Hulu stake came up in passing, but WarnerMedia chief John Stankey also described an effort to thin the herd after Time Warner had rolled out a large portfolio of streaming services.” />
Based on recent valuations, that stake is worth in the range of $930 million — not a life-changing figure for a company as large as AT&T but a worthwhile boost given the stake has never had much strategic purpose. It's also been a profitable ride, given what Time Warner paid ($583 million) when it took the stake in 2016.
The decision to sell its ownership stake in Hulu might not necessarily impact WarnerMedia relationship on the content side.
In a meeting with Wall Street analysts on Thursday, AT&T revealed even more change is coming. John Stephens, CFO of AT&T, said the company was considering letting go of its 10% stake in the streaming giant as part of an overall effort to reduce its massive debt load.
It also carries offers programming via Hulu's on-demand service, much of which is monetized through advertising. Hulu has agreements to carry WarnerMedia's networks — including CNN, TBS, TNT and Turner Classics — on its live TV service.
Hulu generates both licensing and advertising revenue for WarnerMedia that it might not be eager to shrug off. So, WarnerMedia content isn't disappearing from Hulu anytime soon — if they go away at all. These carriage agreements extend beyond next year.