MoviePass describes itself as “America’s Largest Theater Network” while owning no theaters, much in the way OpenTable could be described as America’s largest restaurant network despite owning no restaurants or Uber could be the world’s largest taxi company without employing drivers or owning cars. The company has attracted significant attention with its meteoric rise in subscribers over the past few months. After announcing in August 2017 a drop in its movie-a-day subscription price from $40 per month to under $10 per month, subscriptions skyrocketed from just 20,000 to over 2 million by February 2018.
But is MoviePass a platform business like Uber and OpenTable? Uber matches transportation supply and demand, taking a cut from drivers for each ride, and OpenTable lowers search costs and provides better information transparency on restaurant reservations, charging restaurants a fee for each reservation it facilitates. While those business models have potential to be profitable on a per-transaction basis, MoviePass loses money for every transaction it facilitates. With a $7.95 monthly subscription fee and the average movie ticket costing $8.60 in 2017, MoviePass loses money the first time a subscriber sees a movie (for which it pays the theater full price) and the losses add up with subsequent viewings.
The service creates enormous value for moviegoers, but that value is mostly in the direct price savings. The MoviePass app is not reputed to be particularly user friendly, so it’s likely that customers are doing much of their searching with other sources, and only using MoviePass for the final transaction. For movie theaters, the service also creates significant value by driving more customers to the theater—its revolutionary lower cost will certainly boost demand. But again, MoviePass is paying directly for that value, rather than adding value by facilitating a transaction, matching supply and demand, or adding new information into the system.
So what value do MoviePass and its majority owners, Helios & Matheson, get? The market doesn’t seem to believe it’s much. The company’s stock spiked to a high of $32.90 in early October 2017, but is currently trading under $5. The CEO, meanwhile, articulates a vision of “transforming the movie industry” by driving “more people to the movies, while reinvigorating the entire ecosystem that includes theaters, studios and distributors.” He argues that “when we get to 10 million subscribers… we’ll be able to generate $7 million in additional box office for an independent film. At that point it makes sense for us to get into the distribution business.” But given the significant investment the company is making to subsidize such a large portion of moviegoers, a small position in distribution would not be enough to reap the benefits here—they would need to own a significant portion of the ecosystem. A public legal dispute with AMC Theatres has also highlighted an attempt at another potential revenue stream—taking a share of concessions from theaters. AMC’s CEO stated unequivocally that it would not share concession or ticket revenue with MoviePass, and MoviePass subsequently blocked 10 of the theater chain’s highest revenue theaters from its service. A third—and much more likely—source of potential revenue is data. Helios & Matheson pitches itself as a “Big Data company that helps global enterprises make informed decisions by providing insights into social phenomena.” While MoviePass is an exceptionally expensive way to acquire a dataset on customer preferences, it’s potentially a rich one—in addition to demographic data and movie preferences, the company can glean location data and information on buying habits and entertainment decision-making.
As a company connecting potential moviegoers on one side with theaters on the other at a revolutionary price, MoviePass is clearly a platform company adding value to its users on both sides. Unfortunately, it is likely that value is coming mainly from simply burning cash, and the limited benefits it provides beyond price will fail to create any lasting value (or even sustainability) for the company itself.
 Rob Cain, “MoviePass Is Now A Movement With 1.5 Million Moviegoing Members,” Forbes, Jan. 9, 2018, https://www.forbes.com/sites/robcain/2018/01/09/moviepass-is-now-a-movement-with-1-5-million-movie-going-members/#4dcb17111ad4
 Dave McNary, “MoviePass Hits 1.5 Million Subscribers,” Variety, Jan. 9, 2018, http://variety.com/2018/film/news/moviepass-subscribers-1-5-million-1202658167/
 Google Finance, accessed Mar. 5, 2018, https://www.google.com/search?q=NASDAQ:HMNY&tbm=fin#scso=uid_MN-dWpabN4PctQXqjrqoCA_5:0
 Anthony D’Alessandro, “MoviePass’ Parent Company Helios and Matheson Ups Stake In Monthly Movie Ticket Service,” Deadline, Feb. 16, 2018, http://deadline.com/2018/02/moviepass-parent-company-helios-and-matheson-ups-stake-in-monthly-movie-ticket-service-1202291584/
 Ryan Faughnder, “MoviePass escalates its battle with AMC Theatres by dropping 10 cinemas — and customers are not happy,” LA Times, Jan. 26, 2018, http://www.latimes.com/business/hollywood/la-fi-ct-moviepass-amc-battle-20180126-story.html
 Helios & Mather website, accessed Mar. 5, 2018 https://www.hmny.com/who-we-are/