You can pretty much rest assured these days that whenever you see the word “MoviePass” in a headline, the outlook probably isn’t very good. The “unlimited theater admissions” service has been sailing upon rocky seas, and now its owner is defending the service from accusations of a cash shortage, among other financial woes.
“There’s been a feeding frenzy of negativity, but it’s not going to slow us down,” said Ted Farnsworth, the head of MoviePass’ parent company Helios & Matheson Analytics. “I’m not worried at all. You’re going to see. We’re doing more acquisitions of movies and companies.”
Farnsworth made those statements while in the south of France, attending the premiere of Gotti, the John Travolta-starring film that MoviePass is releasing as a money-making endeavor. The company has recently turned to film production, acquisition and releasing as a means of making ends meet.
The most recent round of headlines and doubters were generated by a public filing from MoviePass last week, wherein the company disclosed it had $15.5 million in available cash—a pittance compared with what it spends to finance ticket buying for its service each month. Investors panicked, and shared of Helios & Matheson Analytics fell 22 percent in a day, closing at its lowest level since 1997. Farnsworth, however, says there’s absolutely no shortage of cash. In fact, he claims “we’ve got 17 months’ worth of cash without further raises of capital,” according to Variety.
Farnsworth has become the prickly figure who represents the public face of MoviePass, which saw its subscriber numbers explode last year after it started offering “a movie per day” in theaters for only $9.95. Theater chain representatives such as AMC Theaters head Adam Aron have called that model unsustainable, as it operates on the assumption that attendee moviegoing will eventually decrease and make the service profitable. Farnsworth, meanwhile, has reacted in ways that … well, don’t entirely make sense. After AMC Theaters criticized MoviePass, Farnsworth said the following: “They’re trying to put us out of business. We’ve become a serious threat.”
Excuse me, Mr. Farnsworth—are you aware of how your own company operates? MoviePass is not meant to be “a serious threat” to theater chains. In fact, the service is meant to benefit theater chains by selling more movie tickets. The only reason that chains are skeptical of the service is that they’re afraid you won’t have the money to pay them back for tickets. This isn’t complicated, Mr. Farnsworth.
Nevertheless, the increasingly desperate-sounding owner hinted as “a major acquisition” that would be announced by MoviePass at the Cannes Film Festival. Presumably, this will be yet another initiative that promises to perk up the bottom line.
“It’s going to be substantial,” Farnsworth said. “People are going to go, ‘Hmm how did they pull it off?’”