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
77° wxIcon
Hi: 92° Lo: 70°
Feels Like: 79°
Kokomo
Overcast
74° wxIcon
Hi: 91° Lo: 69°
Feels Like: 74°
Rensselaer
Clear
70° wxIcon
Hi: 88° Lo: 67°
Feels Like: 70°
Fowler
Clear
70° wxIcon
Hi: 89° Lo: 68°
Feels Like: 70°
Williamsport
Clear
73° wxIcon
Hi: 90° Lo: 69°
Feels Like: 73°
Crawfordsville
Clear
74° wxIcon
Hi: 91° Lo: 69°
Feels Like: 74°
Frankfort
Broken Clouds
75° wxIcon
Hi: 89° Lo: 69°
Feels Like: 75°
Delphi
Clear
75° wxIcon
Hi: 91° Lo: 68°
Feels Like: 75°
Monticello
Clear
75° wxIcon
Hi: 93° Lo: 68°
Feels Like: 75°
Logansport
Scattered Clouds
72° wxIcon
Hi: 91° Lo: 68°
Feels Like: 72°
WLFI Radar
WLFI Temps
WLFI Planner

Indiana Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 46915

Reported Deaths: 2681
CountyConfirmedDeaths
Marion11499683
Lake5053242
Elkhart316443
Allen2717128
St. Joseph186366
Cass16369
Hamilton1518100
Hendricks1386100
Johnson1254118
Porter71237
Tippecanoe6778
Madison64864
Clark63844
Bartholomew58244
Howard56057
LaPorte55326
Kosciusko5124
Vanderburgh4806
Jackson4653
LaGrange4657
Noble45728
Hancock43735
Boone43443
Delaware42949
Marshall4273
Shelby42025
Floyd37144
Morgan32531
Montgomery29320
Grant29026
Clinton2852
Monroe26628
Dubois2646
White26010
Decatur24832
Henry24315
Lawrence23624
Vigo2288
Dearborn22723
Harrison21022
Warrick21029
Greene18432
Miami1812
Jennings17111
Putnam1688
Scott1607
DeKalb1594
Daviess14116
Orange13523
Wayne1346
Perry1279
Steuben1262
Franklin1248
Jasper1142
Ripley1147
Carroll1102
Wabash1102
Fayette987
Newton9710
Whitley884
Starke853
Randolph784
Huntington712
Wells711
Jefferson701
Fulton681
Jay680
Washington661
Knox630
Pulaski621
Clay604
Gibson592
Rush563
Adams481
Benton480
Owen471
Sullivan441
Brown381
Blackford372
Posey360
Spencer351
Fountain302
Tipton301
Crawford290
Switzerland260
Martin220
Parke220
Ohio140
Warren141
Union130
Vermillion130
Pike90
Unassigned0193

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