Since movie pass launched, it has quickly become a popular service among movie fans. For just $10 a month you can see a movie a day. Now though CNN is reporting that MoviePass is running out of money.
According to CNN MoviePass has $15.5 million in cash and an additional $27.9 million in accounts receivable. Sounds good but MoviePass is spending $21.7 million every month to keep the service running.
According to Michael Pachter, an analyst for Wedbush Securities MoviePass is in trouble. “They appear to have enough cash to last two months. Sounds like a terrible business model to me, and I can’t imagine that any sophisticated investors will view it differently.” Michael Pachter said.
So what can save MoviePass?
MoviePass is trying to build a base of customers to cover costs. Look for MoviePass to try and close a deal for additional funding to help keep the service running as they acquire more subscribers.
MoviePass is also expanding with a recent purchase of Moviefone in an effort to expand their service into new areas to help cover their costs.
So how does MoviePass work?
First, sign up for MoviePass. In two to three weeks you will receive a debit card in the mail that only works at movie theaters. From there, you pick what movie you want to see from the MoviePass app and use your MoviePass card to get your tickets at the box office or kiosk.
Now there are a few catches. You can only buy a single ticket a day with each MoviePass debit card, and it has to be the day of the movie. So you can’t use it to preorder tickets days out. You also must be within 100 yards of the movie theater when you select the movie you want to see. (Effectively it wants you to be at the movie theater when you get your tickets.)
Not all movie theaters accept the card, but over 4,000 theaters around the United States work with MoviePass, including several major movie chains such as Regal and Cinemark.
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