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MoviePass Introduces Surge Pricing

MoviePass Introduces Surge Pricing

Excerpts from an article by Jill Disis on CNN

MoviePass subscribers might have to spend a little more money on their next trip to the theater.
The service, which lets customers see one movie a day for $10 a month, began rolling out surge pricing Thursday.

MoviePass told customers that its Peak Pricing model will trigger whenever there is a lot of demand for a movie or showtime. For example, a subscriber who wants to see a popular evening showing of the latest "Avengers" movie might be warned by the MoviePass app that he or she will have to pay a few extra dollars to book a ticket.

Moviegoers will also be told when a particular showtime does not yet have an added fee, but is growing in demand and could have one soon, according to an email sent to customers.

The popular movie service began telling customers last month that surge pricing was coming. It's the latest tweak to a business model that Wall Street has been scrutinizing as one that's too good to be true.

MoviePass pays theaters for the tickets its customers use. Because its monthly rate is priced so low, the company loses money when its customers use a pass.

Parent company Helios and Matheson (HMNY) is now running out of money. The firm recently revealed in government filings that it blew through $40 million operating MoviePass in May. By the end of that month, the company had only $18.5 million in cash on hand, plus $30.3 million in accounts receivable.

Earlier this week, Helios and Matheson told government regulators that it wants to sell $1.2 billion in stock and debt securities as a way to raise money. The company's stock closed at 19 cents a share Thursday.

MoviePass recently passed 3 million subscribers, and is trying to draw in more as part of its plan to stay afloat. Executives want to reach 5 million members by the end of the year, a number they say should help make the business profitable.

In a statement Thursday, MoviePass said that it is still in a testing period with surge pricing, which will roll out to all subscribers over the next few weeks. To start, it said members can expect a fee of between $2 and $6. Members on an annual or quarterly plan won't have to pay surge pricing until they renew their subscription.

In a post on its website, MoviePass painted the new model as one that would allow it to "continue offering our low monthly rate for a movie a day."

The company also took a jab at competitors like AMC Theaters, which recently revealed a $20 a month movie ticket service plan. By keeping the $10-a-month plan as its base offering, MoviePass said its customers "still get the best deal possible."

The company added that it will soon allow all of its users to waive a peak fee once each month.

 

Why subscription sports sites have scored early wins

Excerpts from the article by Max Willens on Digiday

As publishers cast about for reader revenue in a tough digital ad market, many are finding that local sports coverage, which attracts especially passionate, engaged readers, is a good game to be in. For that reason, sports has emerged as a critical test case for the proposition the future of digital news lies in reader revenue rather than advertising.

The most prominent player in the space is $48-a-year subscription-based outlet The Athletic, which claims 100,000 subscribers and just closed a $20 million funding round led by Evolution Media, bringing the total amount of capital it’s raised to $30 million. Elsewhere, there’s DK Pittsburgh Sports and the 7-month-old Boston Sports Journal, which charge up to $35 for a year’s subscription. Hook ‘Em, a paywalled sports product that the Austin American-Statesman launched in 2015, claimed 16,000 digital subscribers in the third quarter of last year, costing $3.99 a week in a bundle with its parent paper.

Their growth is also an encouraging sign for publishers who hope to focus on consumer revenue rather than advertising.

“One thing that’s abundantly clear in our industry is that free is not a business model,” said Todd Dybas, one of the co-founders of The Sports Capitol, a Washington, D.C.-focused subscription site that launched this March.

Read the full article on Digiday

NY Times beats forecasts, thanks to digital subscription growth

Experts from the article by Reuters on New York Post.

The New York Times Co. pleased investors with market-beating profit and revenue as digital subscriptions surged, underscoring the turnaround in its fortunes that had wavered as fewer people bought newspapers.

The publisher’s shares jumped as much as 13.8 percent, to $25.20, their highest since July 2007.

New York Times has been discounting heavily to lure more paid subscribers to its online content and is packaging its subscriptions more attractively, with access to sought-after daily crossword puzzles and cooking recipes.

The company added 157,000 digital subscribers in the quarter ended Dec. 31, taking its total subscriber count to above 2.5 million. Revenue from its digital-only subscription products, including news as well as crossword and NYT Cooking Recipes, increased 51.2 percent, to $96.3 million.

Read the full article on the New York Post

MoviePass Surpasses 600,000 Subscribers

Excerpts from an article by Elizabeth Balboa on Benzinga

MoviePass, in which Helios and Matheson recently agreed to buy a majority stake, surpassed 600,000 paying monthly subscribers last week against mid-August figures of 20,000. The increase is a boon to the trending Helios and Matheson as it begins analysis of MoviePass data to identify trends in the film-exhibition industry.

“More subscribers mean more data,” Helios and Matheson CEO Ted Farnsworth said in a press release. “Together, I believe HMNY and MoviePass can offer important analytics to movie studios and exhibitors while serving the interests of moviegoers in the process.”

The accelerated growth exceeded initial projections and coincided with a decline in churn rate. MoviePass saw 4.2-percent churn in the first month after introducing the new pricing model and 2.4 percent in the second. The rates reflect 96-percent monthly retention and a nearly four-year average subscriber “life expectancy.”

Read the full article on Benzinga