TechStuff Gets a MoviePass

how does it make money? Does it make money? And what is its future? Does it have a future? Well, first, before I go into the history, I think it's a good idea to explain what movie passes. Value proposition is what it's all about. But things do change. It's it's method and business plan has changed dramatically several times, especially in the last year. But here's is a general overview. More or less. The company offers up a subscription based service for going to the movies to see movies in

movie theaters for a recurring regular fee. Subscribers get to go to the movie theaters and watch movies a certain number of times per month. That number changes depending upon what era of movie passes history we're talking about. So rather than buying a ticket every time you go to the movie theater, you would subscribe to this service, and at a participating theater you would be able to activate it. And a lot of theaters did not want to participate,

but didn't have much choice in the matter. The business plan left a lot of people wondering how the heck movie pass was going to make money because someone still has to pay for those movie tickets, and movie tickets aren't necessarily cheap. So unless movie Pass is charging an enormous subscription fee and as get incredible deals on movie ticket prices with these movie theaters, they're going to start

losing money pretty fast. Well. According to the National Association of Theater Owners, the average movie ticket price in the United States hit eight dollars ninety seven cents in two thousand seventeen, which is the most recent year they have

information available. That same page mentions that if you took a the average price in nineteen seventy seven, that was when it was a two dollars twenty three cents per ticket, and then you adjusted that amount for inflation, it would be the same as nine dollars and forty cents in

two thousand seventeen. So the point the Theater Association is trying to make is well, sure, it costs more dollars now than it did in nineteen seventy seven, but in actuality, from a purchasing price standpoint, it's cheaper than it was in nineteen seventy seven. So going to the movies as

a bargain now, that's just the national average. I would not be surprised to hear from you guys in the United States in various places that the ticket prices are much different from eight dollars and ninety seven cents per ticket. I can tell you right now, if movie ticket prices were eight dollars in ninety seven cents here in Atlanta,

I'd go to the movies way more frequently. According to a site called ex pattistan, which is a site that helps determine the difference in cost of living in various cities, so if you wanted to relocate somewhere, you could find out how much money you would need to have your your you know, quality of life in that new place. The cost for two movie tickets in Atlanta, Georgia, that's where I live, is twenty five dollars, which means if you break that down by half, it's about twelve dollars

fifty cents per ticket. That is way higher than that supposed national average of eight dollars and ninety seven cents, and in other cities it's way more and so of then twelve dollars fifty cents, especially once you start looking at special screenings, like screenings where you can reserve a seat or three D or imax, that kind of stuff. So if you subscribed to movie Pass, and if the subscription fee was something like ten bucks a month and you saw more than one movie, then you would be

saving a huge amount of money. And how the heck was the company supposed to make money that way? How was it going to make money? If it's spending more on tickets, then it's getting in subscription fees. That's part of what we'll look into. So now let's take a look at the birth of movie Pass and how it all got started. This goes back to two thousand eleven and a couple of co founders. So one of our key players in this story is a guy named Stacy Spikes,

and Spikes got started in the nineteen eighties. He started as a project manager for Motown Records, which is pretty darn cool. He worked for folks like Spike Lee and Queen Latifa, pretty awesome. He then went on to go work with Sony and their music division before transitioning to the head of marketing for Miramax. Back in nine he founded a film festival in n in New York City, and he had a history in the entertainment business that dated a couple of decades, so he had been around

for a while before coming up with this idea. The other key player in the early days it is a guy named Hammett wat What had earned a degree from Florida Agricultural and Mechanical University back in nineteen four. His first job was with the New Africa Opportunity Fund, which is an investment company that focused on opportunities in Africa, and in two thousand he founded an advertising company called

Next Medium. He would serve as the CEO of that company until two thousand seven, then he would transition to Chairman of the board and then two years later he would step down. So for three years while he was also working at Next Medium, he also served as a consultant for Nielsen Media Research. Then in two thousand nine, he would become an entrepreneur in residence for True Ventures,

a venture capital firm. The two of them met and got to talking about entertainment and movies and decided to collaborate on a project with the goal of becoming the Netflix of the movie going experience. Which is funny to me because if you listen to my Netflix shows, you know that Netflix started off to try and become the Amazon of something. So movie Pass was trying to become the Netflix of going to the movies. Netflix was trying

to become the Amazon of something. They weren't sure what before they really got settled on the movie rental agency. But never mind all that. The plan was to create a service in which users would subscribe for a monthly fee of fifty dollars a princely some In return, they could see up to one movie per day every day for a month. Initially, the two co founders encountered a ton of resistance for an theater owners when they were approaching them regarding this plan, and so their first attempt

was not destined for greatness. Uh what and Spikes thought maybe what they could do is launch a pilot program a small version of their idea tested out, get some data and then use that to pitch to movie theater owners in the future and maybe get a better chance of it, and they decided they would use the San Francisco area as their test site. Their proposal got a

lot of interest from potential customers. Apparently about nineteen thousand people signed up on in one day to try and become part of this program, and Spikes and What had ideas of how their business could benefit movie theater owners. They had visions of using the data from their service to help theaters develop more effective marketing plans. Studios would find the data helpful too, and that access to this data could lead to increased patronage of theaters and even

increase the number of concessions purchases. And since concessions is where movie theaters really make a lot of their revenue, which is due to the complicated nature of box office sales and how much money goes to studios, this could actually be a strong motivator for theaters to play ball, but it did not work. Instead, it all fell apart. So, according to the stories that broke around this time, major theater chains were not told about this pilot program and

they objected to being included in it. They said they would not participate in the program, and this was just at you know, days before the program was supposed to launch over the course of a weekend. Now this is pretty interesting to me, since the theory movie Pass would be buying every ticket at full price from the theater, so people going to see movies would pay a flat monthly fee for the privilege to movie Pass, but the theaters themselves would still get the full price of a

movie ticket for every single screening. For the pilot program, a third party supplier was set to purchase these individual tickets on half of movie Pass. In order for this to work moving forward and to scale up beyond just being a San Francisco pilot program, the theaters were going to need to participate with movie Pass. There was gonna have to be some sort of partnership here and honor vouchers from that company to allow movie Pass customers inside

to watch a movie. Then, presumably the theaters would invoice movie Pass for each ticket. But two of those chains, AMC and Landmark, objected to this whole enterprise and said they would not participate. The initial beta test was to cover twenty one theaters and am C owned six of them, so because they said they would not participate, Spikes and What had to make the tough decision to step back

put this pilot program on pause. So they had to tell all their customers, I'm sorry, we're not actually going to do this after all and put their business on what they called a temporary hiatus. It was a bad enough start to lead some analysts to that the company

was done before it could even begin. It was difficult to imagine a scenario in which the business plan would work unless movie Pass could establish some sort of major discount ticket relationship with various movie theater owners and chains, and that just didn't seem likely. But the company wasn't down for the count yet. I'll explain more in a second, but first let's take a quick break to thank our sponsor.

Spikes and Watt tried again a few months after the abandoned pilot program, and this time the plan was slightly different. They were going to provide vouchers to customers. So a customer would sign up for the program, and when he or she wanted to see a movie, they would select the film and time that they wanted to see it. And this would trigger a voucher to be sent to them, which they would download and print. Each voucher print out included a single use credit card number that was good

for the purchase price of the movie ticket. But this approach didn't make customers or theater employees happy. It was a hassle to have to print a voucher at home and then bring it with you, and the transactions at the theaters took a lot of time to process because cashier's had to manually input the single use credit card numbers into a system, then they had to wait for

the system to validate the purchase. And then there were the allegations that movie chains were putting pressure on a company called Hollywood Movie Money that was the company that was actually in charge of producing the vouchers on behalf of movie Pass. And this Hollywood Movie Money under pressure pulls out of this agreement, and this attempt ends up fizzling out too. So this is the second attempt to get movie Pass going, and the second time it fails. However,

Spikes still wasn't discouraged. He went back to the drawing board again and a few months later he returned with a new version of movie Pass. This one was a

little different from the earlier proposed one. The monthly fee you'd pay would be dependent upon where you lived, because, as I mentioned, movie tickets cost a different amount depending upon where you are, and so if you lived in a more expensive market where the average movie ticket price was higher, you'd have to pay a higher monthly fee to be a subscriber to movie Pass compared to someone

who lived in a lower cost market. So the subscription fees ranged from twenty nine dollars on the low end to thirty four dollars on the high end, which was still a huge bargain when you consider the pilot program was going to cost fifty bucks, and in general they were aiming at a price that would represent roughly three films a month. That was kind of how they came to the conclusion that this would be the right subscription price. Customers would download an app and they would get a

special debit card along with their subscription. The app depended upon a smartphone's geolocation capabilities, and here's how it worked. Let's say that I have subscribed to movie Pass. I'm a movie Pass customer. I have decided I am going to go and watch a film at my local cinema, Plextorium, and I've got my smartphone and I look to see which movies are playing. Let's say I'm in for a bad time. I want to watch the matrix reloaded, so I choose the matrix reloaded. I choose the time I'm

going to go see it. I get to the theater, I activate my app the UH the app shows my selection, It detects from my geolocation data that I am in fact at the theater and sends a message back to movie Pass headquarters. That message authorizes the debit card that is associated with my account to become active for thirty minutes, and the debit card works the same way as any other debit or credit card does. So in theory, at least, movie theaters that accepted that tip of card would have

nothing to complain about. They could process the payment just like any other ticket purchase, and they would get the full purchase price at that point, and I would get to go in and see the movie. Using this approach, movie Pass launched and invite only beta test, and immediately there were questions from the industry, like, how could such a business remain in operation long if people were you know,

using the service they were paying for. If you actually went and saw more than three movies in your region, then every single time you're going to see a movie, you're costing movie pass money. How could you possibly stay in business? I mean, if the average movie ticket in my city cost more than twelve dollars a pop, we're going to round it down to twelve dollars. Will say that my subscription is on the high end at thirty

four dollars per month. If I see more than two films, movie passes losing money on that deal, if they're having to pay full price for the tickets, and presumably least at first, I'm going to see as many movies as I possibly can. I mean, typically when people sign up to a news service like this, they binge initially. That might tail off after a while, but it means that the more customers you get, the more expensive it is to operate. You're not making more money, you're actually losing

more money in that case. So it did not take long for people to say, how can this service stick around? I mean, not only does it cost them to operate in this manner, they still have all the other expenses that any other company has. You know, to pay for the back end, to pay for office space, to pay salaries. All that stuff still exists for this company too, on top of the fact that their business plan means they

actually lose money the more people use their service. In an interview with The New York Times, Spikes said that his long term plans included revenue from several streams besides subscription fees. So he was pressed on this point. They were asked, you know, he was asked, rather, what exactly do you plan to do? What what are these other streams of revenue, and so he answered the question. He said, there are three big ones, and that would be advertising,

which is pretty straightforward. That means that he would allow other companies to advertise through the app, and movie Pass would be able to supplement the money coming in from subscriptions by the fact that people are viewing ads on the app itself. Then there was sell through. So what does that mean? What does sell through mean? What's sort of like up selling in the retail space or impulse shopping. It's taking the opportunity to sell stuff related to the

movies that customers are seeing. So movie Pass knows what movie I'm gonna go see. I have to select it, I select the title and the time, and it ends up sending me the um the authorization for me to purchase my movie ticket. But that means I'm I'm telling movie Pass each time I go to see a movie what it is I'm going to see and where I'm seeing it. Based on that, they can send me data about stuff that I might want to purchase that's related

to the film I'm seeing. If I've just gone to see the latest Star Wars film, movie Pass might present me with offers to purchase the earlier films in the Star Wars saga on Blu Ray, or it might have links to purchase merchandise related to Star Wars if I want to get, you know, a real geeky Star Wars T shirt or whatever, and and goodness knows I have plenty of those. So that was the second revenue source.

The third was about data. The data side is one I find particularly interesting, especially since I've recently done so many episodes about privacy and security. Now, according to Spikes nineties, six percent of all movie tickets sold were from walk ups, meaning the vast majority of seats at movie theaters were being sold at the ticket counter, not in advance, and the challenge for theaters and for studios is that walk ups give very little information about the people coming to

see those individual films. You can see at a glance which movies are performing well, you can see in ticket sales which ones are doing well, but you don't know

very much about the individual audiences. Spikes argued that with a program like movie Pass, theaters and studios would learn a lot about the type of people who go to see specific kinds of films, and that this in turn could help guide marketing efforts to maximize the number of people to see those movies, and so movie Pass would end up making some of its money by selling information

about its customers to other companies. Spikes would say, quote our technology, lets us say this is the type of people who are going, this is when they went, this is what time of day it was. We can break it up by age, by race, sex. The only thing we can't tell you is what they ate for lunch and what their blood type is. End quote. Those probably sound like pretty cool concepts to companies, but it might come across as a little bit orwellian for your average

movie fan. In addition, I'm sure there was a hope that people would sign up for the service and then just you know, not use it that frequently. Kind of like how some people will sign up for a gym membership and then you know, they don't go to the gym. So the gym makes money whether you're there or not, and if you're not there, you're not causing wear and tear on equipment. So gems love it when you sign up and you don't go, And maybe that was what

movie Pass was kind of hoping for. Two and so movie Pass began normal operations by early two thousand thirteen. It had rolled out in many markets. At that time, the only app available was for the iPhone, though you could access the movie Pass system through a mobile website if you happen to have a smartphone using a diff front operating system than iOS, Every user or household member would have to have his or her own subscription and personal card. They didn't have an option for signing up

for like a family account or anything like that. The app would depend upon that geolocation data to confirm that you were actually at the theater to buy a ticket before you were allowed to use the associated cards. That way, you couldn't just claim that you're going to go see a movie and then use your activated debit card to buy something else like a cheeseburger. And after a one month trial period, users would be committed to a year long plan with cancelation fees that would range from twenty

dollars to seventy five dollars. The amount of the cancelation fee depended upon how long you had been a member. If you wanted to cancel right away, you're gonna have to pay pay pay. So I began to grow its customer base, and because it was using a Discover card methodology for payments originally anyway, later on they would change

that the master card. There wasn't a whole lot of movie theater chain could do besides protests the whole concept if in fact, they took Discover Card because the amount of the method of payment was pretty straightforward. Uh So things continued. The one thing they really could do, if they really wanted to, would be to put up a fuss and demand that Movie Pass not include their theaters

in the app. Since you had to use the app to pick the daytime and title that you plan to see and which movie theater you were going to, they could at least in theory demand that their locations be left off of Movie Passes service, but that was about it. Well, things would rapidly change for movie Pass over the next few years. I'll explain more in just a second, but first let's take another quick break to thank our sponsor.

In two thousand and fourteen, movie Passes experience as a company was starting to hit some bumps, and this would continue up till today. On the one hand, movie Pass was able to forge something of an uneasy alliance with the movie theater chain AMC, which had been a pretty reluctant participant up to this point and would continue to be actually, but this deal was sort of a pilot program for theaters in Boston, Massachusetts and Denver, Colorado. There

were two tiers of subscriptions that users could choose. For thirty five dollars a month, subscribers would be able to see films in standard two D format at AMC theaters, and for forty five dollars a month, they could see films in any format, including three D or IMAX. Now. According to Business Insider, at this point, movie pass had about thirty thousand subscribers, and the company began to consult with an expert in the field, and it's a guy

I talked about recently in the episodes about Netflix. So if you heard those episodes, you're gonna hear a name that's it was kind of familiar. That would be Mitch Low. Mitch Low was not only instrumental in getting Netflix up and running, but also after he left that company, he would go on to co found the company red Box. But on the other hand, two thousand fourteen was also a tough year for the movie theaters in general because from a box office standpoint, gross revenue was down more

than five percent compared to two thousand thirteen. That might have been one of the reasons AMC was actually willing to go through with this partnership, and that partnership would begin in early two thousand fifteen. A year later, at the end of the pilot program, the two companies participated in a data analysis study to see how it all shook out, and the white paper would come out in

the spring of two thousand fifteen. And the white paper which would come out that spring said that the average theater customer was going to a MC movie theaters about one and a half times per month on average. Before the pilot program. So you know, when you break out the average of all the people going who were not in this program, at first, it ended up being one

and a half times a month. Then once the pilot program began, AMC saw that number go up to three times per month, which was not surprising people went to the movies more after subscribing, but then it settled back down to about one and a half times a month

after that. That led AMC to argue that this partnership wasn't terribly valuable for the company, that they could actually make more money launching their own subscription service, because if they only experienced this rush of usage in the first month and then it tapered off again, it would make

more sense if they could just keep all the money. So, uh, you know, if you're if you're paying a premium price to go to the movie theater and you only go one and a half times a month on average, then chances are you're paying more for the subscription than you would if you went to the theater and just bought individual tickets. So AMC would win out if it were in charge of the whole show. So they kind of

canceled or concluded this whole partnership. In two thousand sixteen, Mitch Lowe would go from being a consultant to movie Pass to becoming the CEO of movie Pass. Spikes, who had been CEO, would become co chairman alongside fellow co founder Hammett Watt. The following year, in data company Helios and Matheson Analytics announced it would acquire a majority stake in movie Pass for a reported twenty seven million dollars.

And while that was big news, the first move out the gate really made headlines, at least among movie Pass fans. The company would offer a brand new plan for nine dollars per month. You could see quote unlimited movies in theaters with no blackout dates, no contracts end quote. That announcement was crazy. I mean, there's barely more than a single ticket at the the average price in the US, right like nine a month. That's like one dollar more

than what the average ticket cost was. Going to the movies just two times for any person in the United States would mean that Movie Best would be paying more than what it was getting in subscription fees. Here in Atlanta, going just once would mean that the full ticket price was more than what you were paying in a subscription fee. By this point, Movie Bass had established discount ticket rates with some movie theater chains, but not all of them.

I bet you can guess the identity of one movie theater chain that continued to refuse to have discount rates

with movie Pass If you can't guess, it's AMC. But even so, even with discount ticket prices, even if they're not paying full ticket cost, that's still a super low subscription fee, and unsurprisingly people began to jump on board because at that price, how could you not more than a fift people would attempt to sign up to the service in the forty eight hours following their announcement, and that puts such a load on the company's servers that they started to crash, and the app and the website

was unavailable quite a few times in that period. AMC's reaction was negative, to say the least. The theater chain said it was going to look into the possibility of shutting out movie Pass from its chain entirely. In early movie Pass would remove ten AMC theaters off its app in various cities, and that appeared to be in response to this problem of not getting those reduced ticket prices. By the end of two thousand seventeen, movie Pass had

accumulated a million news subscribers. Usually you'd say that's a good thing. The plan at this point was still to make most of the revenue by selling data about customer behaviors to various partners, and since of the users were class to fight as millennials, young people who are presumably going to potentially be a customer for a really long time,

it seemed like that would be particularly valuable information. In two thousand eighteen, movie Pass announced a new division called movie Pass Ventures, which would do film acquisition and distribution. That led to some controversy later on. The first film the division would acquire was called American Animals, and the second was the film Gaudy Geo t t I with John Travolta. It received the rare zero percent rating on

Rotten Tomatoes. Now, Rotten Tomatoes aggregates reviews from critics and then assigns a rating based on that aggregation, so zero percent doesn't automatically mean the movie is worse than say a twenty film. It just means more critics gave it a negative review. But the controversy came when the audience

score was much much higher than the critics score. Some analysts suspected that there was manipulation at play, that maybe Movie Pass customers were given an incentive to give a good review to these films, and a few people pointed out that some of the user reviews that were being left on Rotten Tomatoes had only ever reviewed one other film in their history, and that other film was American Animals, the other movie Pass ventures picture, which does look a

little suspicious. In the spring of a movie Pass presentation revealed that the app wasn't just using your location data to make certain you were at the theater to buy tickets when you said you were. It wasn't just an activation methodology. It was also tracking you. It was including information from before you arrive at the theater and after you visited the theater, So, in other words, they were watching where customers were going, where they were coming from,

where they were going to. Spikes had originally said that they wouldn't be able to tell you what you had for lunch, but based on this data, they might have been able to give a pretty darn good guess, and a lot of people argued that the company had not clearly disclosed to people when they signed up to the service that their location could be tracked. Subscription numbers dropped.

They dropped again a little bit later when movie passed, in an effort to stop hemorrhaging so much money, remove the ability to see a film a day on that nine dollars per month plan. Instead, now people could see up to four movies a month. And this initial change. Part of this was because so many new people were subscribing and going to the movies, so movie Pass was losing more money more rapidly because they were so popular,

making it up in volume was not an option. In addition, users would be prevented from buying tickets to select movies more than once, so in other words, if you were going to go see a really popular film, you were limited to seeing that film just one time in the movie theater during its run, rather than being able to see it multiple times using your passes. That was one way movie Pass was trying to limit the number of

times people were going to the theater. In April two eighteen, it became clear that the parent company for movie Pass had been losing twenty million dollars every month since September of two thousand seventeen, and an auditor expressed concern that Movie Pass would not be able to continue for very

much longer. The company would reintroduce the one ticket per day plan a little bit later, because subscribers were still dropping off dramatically, and now the company was saying, well, it hurts us financially to have too many subscribers, but then we won't have a company if everybody leaves the service.

But then, in order to balance out the fact that now you could go see a movie a day again, they introduced the concept of peak pricing, in which customers discover they would face additional fees to see certain popular movies at busier times of day. So if you had no job and you could go to the movie theater in the middle of a work day, you probably weren't too bothered by this because you could just see the

film whenever you wanted to. But if you had normal working hours, you were likely to run into peak pricing because that happened to be the same time when you would have availability to go see a movie in the first place. Later, still, the company suffered a massive service outage, and they had tomorrow five million dollars because they admitted they did not have enough money to stay in operation. Without taking out a five million dollar loan. It increased

the subscription fee of fourteen dollars cents per month. Keep in mind, this is still a point where you would agree to like a year long plan, so while it would be broken out to fourteen dollars per month, you're actually paying for a full years service, so they subscription

fee goes up to month. And it also limited the number of times UH subscribers could watch new popular movies and reduced which screenings you could go to, so for brand new movies that were like tent pole films, you would only be able to see it maybe once, and you couldn't go see it at the most popular times.

In early August two eighteen, the stock price for movie Passes parent company dropped fifty six percent and movie pass would again remove the movie a day option for users, going down to three films per month, so once again, you can no longer go see a new movie every

single day. You can only see three a month. According to Mitch Lowe, this was okay because the average person would only go see three movies or fewer a month anyway, so it wouldn't really impact most users, except it does impact customer approval and the company did reduce the price back down to nine dollars cents had been known for previously,

so at least that changed. It was no longer and they said that they were going to nix the surge pricing feature as well, but just a couple of weeks later, in mid August, and yeah, we're getting real close to when I'm recording this episode. But this is how quickly things have been changing. Movie Pass would change yet again

mid August. Now users could only choose from between six movies each day, with limited showtimes, so there was no guarantee that the movie you wanted to see would even be listed on the day you could go see it, or it might be listed, but it might be only available at an inconvenient time because of the movie Pass availability, no matter how many times it might be showing at

the actual theaters near you. On August two thousand eighteen, a board member of Helios and Matheson named Carl Schram would resign, and as part of an open letter he issued during his resignation, he alleged that movie Pass per basfully withheld information and made critical decisions without informing the board, let alone getting bored approval for them, and analytics company called Sensor Tower Store Intelligence stated that the first time

downloads of movie Passes app have dropped by seventy six percent over the past three months. I'm recording this at the end of September two eighteen, uh in fact September two eighteen, and that report published yesterday September. So as I record this, there are tons of analysts who are predicting the demise of movie Pass. Heck, by the time this episode publishes one week after I have recorded it, that company might not exist anymore. It's been losing money,

it's been losing subscribers. Who was playing a really dangerous waiting game to try and get enough users and to be seen as valuable in order to make a profit from all the data it was gathering. But that was a pretty expensive thing to wait out, and the controversies have hurt the company's credibley with its user base. So

will movie Pass survive? That's possible, but with competing services coming out, some of which are coming out from the very movie chains that have been resisting movie Past this whole time, and with flagging user confidence and approval in the service itself, it's gonna be a long shot. Doesn't mean it's impossible, but it's gonna be super challenging for movie Pass to make it through UM and survive to two thousand nineteen. I would not be surprised to see

it go away. UM. It would be kind of a shame. Like, I still am not quite sure how the company could make enough money, even with those additional streams of revenue, to make it a truly profitable experience without it being something launched by the actual theater chain itself. It's tough, UM, and I don't know how I feel. Actually, I do know how I feel about making money through selling data.

I feel schivy about it. It's a skive thing. It's one thing to say, oh, well, here's a way you can send Jonathan a message saying, oh, this new movie is coming out, and you like this other movie that was like it, so maybe you'll like this one too. That I don't object to so much. But there's no telling what sort of companies movie Pass might start selling data to. It might be totally different companies that have completely different business models, And I'm not terribly comfortable with that.

This happens all the time. You know, your information is sold to tons of different actors out there, and by actors, I mean agents, you know, companies, that sort of thing. But I don't want to invite more of that necessarily into my life. That's just me. It's my own personal reflection text stuff. Listeners. We have some breaking news. Right after I recorded this episode, some news broke that I

felt I had to include before we published. So I'm recording this attendom the day before the show goes live. I'm so sorry. Sorry, but anyway, some crazy stuff happened that I think we need to address. Movie Past did something I think is pretty insane. Several customers who had canceled their subscriptions after the service had gone through multiple changes in two thousand eighteen ended up receiving emails that said they would have to quote unquote opt out of

enrollment into a new subscription service. The email said that these lucky individuals and I am using air quotes for that had been selected to be automatically enrolled in this new service that would return to unlimited movies per month. In reality, it would be unlimited movies within movie Pass inventory, meaning you know movies that Movie Pass had access to.

That actually means that things like blockbusters on opening weekend would be off limits, so not really unlimited movies, but anyway, it meant that unless you went to the proper settings in your account and you opted out of this service that you did not ask to be in, you would

start getting charged by movie Pass for this service. So imagine that you are upset at movie Pass because the service changes have been going back and forth and it's not the service that you originally signed up for, so you decide it's not worth this hassle and you cancel your subscription. And then, uh, as of like the end of September, you get an email that says, surprise, your service has been re enacted without your permission and that if you don't do anything about it, you're going to

get charged for it. I think it's safe to say this is banana. You should not have to deal with that sort of thing. I think it's ridiculous for any company to enroll a former customer into a new subscription service without their permission and then say it's on you to opt out of it. That to me is absolutely crazy. It doesn't sound ethical to me. Now that's my personal opinion,

but I think it's a reasonable one. And then just hours before I was to come into this studio to record this update, more news broke the CEO of Helios and Mathison Analytics, Ted Farnsworth. Helios and Mathison Analytics is, of course, the parent company of movie Pass. Has said that they raised sixty five million dollars in new funding in September. But that being said, Helios and Mathison Analytics is still having some major problems. As of this recording.

Their stock price for that company is at a single penny per stock one cent stocks, and it is in danger of being delisted from the Nasdaq Stock Exchange. On October eighth, the company is going to hold a stockholder meeting to discuss the possibility of a reverse stock split. Now I've talked about stock splits in the past. To stock split is when you take the number of stocks and you increase that number, really the number of shares in stock. You increase the number of shares, and then

you decrease the individual share price. That way, the company's value is preserved as a whole, but you can increase the number of shares. So you might typically hear of a two for one stock split, which means that if the company has a thousand stocks now it has two thousand stocks, but there are two thousand stocks where each share is worth half of what they used to be worth. This helps improve liquidity and trading, but it doesn't change

the value of the company. This is going to be a reverse stock split, so instead of a stock splitting, it's shares the stocks merging together. So this would be a five hundred shares of stock merging to form one share. So for every five hundred shares now there would just be one share that would be five hundred times the price of the original yaars, so instead of all one cent share, it would be five dollars essentially. Yikes. Anyway, those are the breaking news points that I wanted to

include in this episode. Uh decided to add it on here at the end, and I'm sure by the time this publishes, they'll be yet more news about movie Pass. Probably not good, but I only have so much time and we have to publish at some point, so fingers crossed, it won't be catastrophic huge news. I'm sure we will be talking about movie Pass, perhaps in the past, tense again in the future. All Right, Susannah, that was our

episode about movie Pass. If any of you out there have suggestions for topics I should cover in future episodes of tech Stuff, whether it's a technology, a person in tech, a company, a concept, anything like that. Maybe there's someone you want me to interview or have on as a guest, let me know, send me an email. The address for the show is text stuff at how stuff works dot com or drop me a line on Facebook or Twitter.

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