Helio & Matheson Analytics inc., the owner of MoviePass is in trouble. MoviePass stock has dipped below 24.5 cents, which is a 15 percent tumble marking a new low for the stock. This is the third day of decline for the companies stock and highlights a business model which appears to be unsustainable.

MoviePass Stock

MoviePass is a subscription service where users pay a flat monthly fee to go to the cinema multiple times in that month. The unsustainable business model was simply too-good-to-be-true; until recently $9.95 a month would allow you unlimited cinema trips in a month. A deal of this type of savings is great for consumers but unfortunately, MoviePass was losing money on practically every ticket sold.

Now a $9.95 monthly subscription, allows you only 4 cinema trips in a month (a lot less than unlimited). But on top of that, there are annoying terms of use: You cannot see the same movie twice, moviegoers are expected to take pictures of their stubs and submit them to MoviePass, before being allowed see another movie. Also, the company has added $2-$5 surcharges if the movie is popular.

To add to the frustrations, MoviePass CEO Mitch Lowe has admitted that he doesn’t know if the original “unlimited” plan will ever return.

The Reddit AMA

Today, June 26, Mitch Lowe took to Reddit for an AMA (Ask-me-anything) session and shareholder frustration about falling MoviePass stock price and wavering service terms was clear to see;

“Frustration is putting it lightly. I understand that you can’t talk about HMNY stock price here, but the shareholders REALLY hope you all have an ace up your sleeve or a magic wand. Preferably a wand that isn’t of the Reverse Split™ brand. Good luck Mitch.” – Chillimatica

The very first question put to Mitch, deals with the core issue that concerns so many as StarDestinyGuy asks: “What would you say to people who are concerned about the long-term viability of MoviePass, people who believe that the business model is not financially sustainable?”

CinnamonSwisher also got to the real crux of the problem:

“You can only see one [movie] per day…you can’t see the same movie twice, you can only get tickets same day, you have to take a picture of your ticket stub and submit before you can see your next movie, and pay a $2-5 charge if the movie is popular (obviously people are going to see popular movies so this one is just obnoxious nickel and dime tactics)With how annoying MoviePass is becoming I’m debating switching to AMC despite it being twice as much because it is simpler. Just allowing us to see the same movie more than once and nixing the peak pricing would go a long way in users eyes, and I think most people would be willing to pay $5-10 more a month”

>>Global Eagle Entertainment Business Transformation

The Falling MoviePass Stock is a Problem

Now MoviePass faces competition from AMC Entertainment and Alamo Drafthouse Cinema, two theatre groups that have launched services which rival MoviePass. Add to that, with HMNY stock trading well below $1, Helios & Matheson now has until December to regain compliance as the company stock no longer meets listing requirements.

What can the company do to turn this around? Or is this where the competition swoop in and steal the ball?

Featured Image: DepositPhotos.com/Pazhyna