Blockbuster deal! MoviePass buys Moviefone from Verizon

Hello! And welcome to Movie...Pass?MoviePass, the ticket subscription company, is buying Moviefone, the 29-yea...

Posted: Apr 5, 2018 10:53 PM
Updated: Apr 5, 2018 10:53 PM

Hello! And welcome to Movie...Pass?

MoviePass, the ticket subscription company, is buying Moviefone, the 29-year old movie directory service.

A lot has changed since Moviefone first started. It's hard to imagine now, but people used to call a number for movie times. Moviefone became so popular that its famous "Welcome to Moviefone" greeting was parodied in a famous "Seinfeld" episode.

Moviefone still has a website and app, but it retired the 777-FILM phone service in 2014. (Seinfeld's Kramer must be pleased. "Why don't you just tell me the name of the movie you've selected?")

AOL, now part of Verizon, bought Moviefone in 1999 for $388 million. But MoviePass isn't spending nearly as much to get Moviefone. MoviePass majority owner Helios and Matheson Analytics will pay Verizon only about $23 million for Moviefone -- $1 million in cash and a mix of HMNY stock and warrants worth about $22 million, according to a Securities and Exchange filing Thursday.

So why does MoviePass want Moviefone? MoviePass CEO Mitch Lowe told CNNMoney it wanted access to Moviefone's film and TV show content.

"Our subscribers want to connect with Hollywood and hear more about what's going on in the film industry," Lowe said. "They'd like to have MoviePass recommend movies to them and Moviefone is iconic."

Lowe, a co-founder of Netflix and former president of DVD rental kiosk service Redbox, added that he hopes the acquisition will be a "great funnel to attract new members" to MoviePass, which currently has more than 2 million subscribers.

Related: Can MoviePass be the Netflix of theaters?

Ted Farnsworth, CEO of Helios and Matheson Analytics, added that the marriage of MoviePass and Moviefone will hopefully lead to more advertising revenue.

"MoviePass is growing at warp speed. Put it and Moviefone together and it gives us more advertising opportunities," Farnsworth said in an interview with CNNMoney. "This is a great strategic move for us."

MoviePass arguably needs more ad sales to convince skeptical investors that its business model of buying tickets from theaters and then offering them to subscribers at a discount through monthly and annual subscription plans is viable for the long haul. MoviePass lets people see a movie a day for $7.95 a month -- it recently cut its price from $9.95.

Shares of Helio and Matheson Analytics have plunged nearly 55% this year. Investors are worried that MoviePass won't be profitable anytime soon.

Part of the problem? We live in an era of so-called peak TV. Netflix, other streaming services and big cable TV networks are churning out more and more quality shows that eat into the time people have to go to movies.

Investors also worry that the big chains that MoviePass currently buys tickets from -- AMC, Regal and Cinemark -- may eventually look to cut out MoviePass and launch their own subscription services or other lower-priced deals.

Regal, which is now owned by UK-based Cineworld, has experimented with charging more for tickets during peak movie times and less at times when attendance tends to be lighter. Think of it as Uber-style surge pricing, but for movies.

And Cinemark unveiled Movie Club, a monthly plan that lets people buy a movie ticket a month for a discounted price of $8.99, last year.

Related: MoviePass CEO says unlimited movie service is leading to huge growth

That deal obviously isn't as good as the one a day plan offered by MoviePass. But Cinemark will also allow Movie Club members to roll over unused tickets every month, bring friends at the lower price and offers bargains on concession stand items.

Lowe isn't too concerned about competition though. He said he's convinced that MoviePass will continue to work closely with the big chains -- even if Wall Street is nervous.

"We have to prove we are a driving force in getting more people into theaters. We have to try and put our money where our mouth is," he said.

West Lafayette
Clear
49° wxIcon
Hi: 70° Lo: 50°
Feels Like: °
Kokomo
Partly Cloudy
52° wxIcon
Hi: 69° Lo: 52°
Feels Like: 52°
Rensselaer
Partly Cloudy
50° wxIcon
Hi: 69° Lo: 50°
Feels Like: 50°
Fowler
Partly Cloudy
49° wxIcon
Hi: 69° Lo: 49°
Feels Like: °
Williamsport
Clear
50° wxIcon
Hi: 70° Lo: 49°
Feels Like: 50°
Crawfordsville
Clear
48° wxIcon
Hi: 69° Lo: 48°
Feels Like: 46°
Frankfort
Partly Cloudy
48° wxIcon
Hi: 69° Lo: 49°
Feels Like: 46°
Delphi
Clear
51° wxIcon
Hi: 71° Lo: 52°
Feels Like: 51°
Monticello
Partly Cloudy
50° wxIcon
Hi: 72° Lo: 53°
Feels Like: 48°
Logansport
Partly Cloudy
50° wxIcon
Hi: 69° Lo: 51°
Feels Like: 50°
Warming up with plenty of sunshine!
WLFI Temps
WLFI Planner

Indiana Coronavirus Cases

Data is updated nightly.

Cases: 947918

Reported Deaths: 15377
CountyCasesDeaths
Marion1291181990
Lake635721103
Allen53899761
Hamilton44082449
St. Joseph42122590
Elkhart33803491
Vanderburgh30574449
Tippecanoe26915251
Johnson23727418
Hendricks22410342
Porter21832347
Clark17562231
Madison17492385
Vigo16302285
Monroe14545191
LaPorte14389239
Delaware14183222
Howard13971273
Kosciusko11498135
Hancock10935166
Warrick10737178
Bartholomew10635170
Floyd10514208
Wayne10077226
Grant9213204
Morgan8928160
Boone8463111
Dubois7791123
Dearborn769490
Henry7691133
Noble7466101
Marshall7409128
Cass7219118
Lawrence7026153
Shelby6647111
Jackson661386
Gibson6190107
Harrison609386
Huntington604495
Montgomery5853105
DeKalb581091
Knox5535104
Miami548888
Putnam543268
Clinton537465
Whitley529354
Steuben501768
Wabash488692
Jasper483861
Jefferson474492
Ripley457777
Adams446068
Daviess4231108
Scott409165
Clay394957
White393858
Greene393392
Wells389884
Decatur388797
Fayette378578
Posey362341
Jennings356056
Washington334747
LaGrange325175
Spencer321136
Fountain318455
Randolph317190
Sullivan309449
Owen287064
Starke282864
Fulton280454
Orange277859
Jay257038
Perry254152
Carroll245229
Franklin242838
Rush237030
Vermillion235050
Parke221420
Tipton212055
Pike211740
Blackford170534
Pulaski168551
Crawford147318
Newton145845
Benton143916
Brown135846
Martin130217
Switzerland126910
Warren115616
Union98511
Ohio80511
Unassigned0482

COVID-19 Important links and resources

As the spread of COVID-19, or as it's more commonly known as the coronavirus continues, this page will serve as your one-stop for the resources you need to stay informed and to keep you and your family safe. CLICK HERE

Closings related to the prevention of the COVID-19 can be found on our Closings page.

Community Events