And so it all ends in disappointment, like the umpteenth installment of a Stallone or Schwarzenegger franchise.
For MoviePass and its parent company, filing Chapter 7 bankruptcy earlier this week means that what promised to disrupt an industry that has been around for more than a century – the movie business, of course – has itself been disrupted, and had been since the service was shut down in September. The filing means the companies will be sold, and the funds distributed to creditors.
Those creditors include a list of more than 12,000 subscribers, and as the math works out, each of them may get about $100 in liquidation – if they get paid at all. The final shuttering comes after at least some subscribers complained that their cards were still being charged, even when the MoviePass service had gone dormant.
Turns out the movie ticket subscription business has relatively low barriers to entry. MoviePass launched in 2011, was famed for its $10 monthly subscription service that allowed for unlimited visits to theaters, and movie chains (like AMC) started to offer (or counter-offer) their own subscriptions.
It’s never a good idea to lower prices and then lose money on subscribers, which is what MoviePass did when it dropped the service’s price from $50 to the famed $10. Net losses doubled in 2018 to about $329 million on sales of $232 million. Eventually, other tactics came and went. Uber-like surge pricing failed. A new attempt to raise capital failed. Even the service itself failed, where last year technical issues forced a period of suspension. Then there was the fraud issue, where customer records such as credit card data were left exposed.
Whatever could go wrong, did. And now subscribers wait for the final checks to (maybe) arrive.
As they say in the biz … fade to black.
Contactless Payments: Mastercard reports that 30 percent of all card-present transactions are done via tap to pay. And Visa says that one in every three card-present transactions on its network are tap to pay.
Cloud Computing: Microsoft’s results show that managing applications and services through the tech giant’s data centers is taking off in a big way, especially among corporate users. Fiscal second-quarter Azure sales were up 62 percent.
ePayments: PayPal reports that the firm added 9.3 million users in Q4, bringing its total active user base to 305 million. Management also noted that engagement among active users grew 10 percent during the quarter to reach 40.6 transactions per active account.
Bitcoin: Criminal activity using bitcoin is at an all-time high – drug sales through the Dark Web are up 60 percent and were worth more than $600 million, as measured from January to March of last year.
More Issues for Big Tech: The U.S. Department of Justice (DOJ) and U.S. state attorneys general may share information about the ongoing investigation into Google’s alleged antitrust violations. Elsewhere, the European Union (EU) wants to create a single market of data that will challenge the dominance of private companies like Amazon and Google.
IPO Valuations: They might be coming down to earth, at least where tech unicorns are concerned. Casper Sleep’s filings with the SEC to go public offer up a pricing range that values the company – at the midpoint – at roughly $700 million. That’s a far cry from the $1.1 billion valuation implied by a recent funding round.