No news tends to be good news when it comes to MoviePass, but the quiet couldn’t last forever. Variety reports that Helios & Matheson, the movie-ticket app’s parent company, lost $137 million in the third quarter of 2018 — once again raising doubts about MoviePass’ future. Helios & Matheson earned $81.3 million in revenue during Q3, nearly all of which came from MoviePass, but its cost of revenue was $109.6 million and it had an interest of expense of $95.6 million.
The filing in question includes a troubling note: “Our cash and cash equivalents may not be sufficient to fund our operations for the near future and we may not be able to obtain additional financing.” Many have questioned the continuing viability of MoviePass, but such doubts have usually been brushed aside by the company itself.
“During this transitional period for Helios and MoviePass, we have been focused on reducing our burn rate and striving to improve our business model, and we are very encouraged by our Q3 financial results,” Ted Farnsworth, Helios’ chairman and CEO, said in an announcement of the company’s latest financial report. Helios & Matheson is currently being sued by several investors, with one claiming that the company made “materially false or misleading” statements.
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It’s been a rollercoaster of a year for the company, which in August of 2017 reduced the monthly cost of its service to just $9.95. This led to an explosion of new subscribers, essentially making MoviePass a victim of its own success: So many people began using it that it was no longer profitable. The terms of that subscription eventually changed, with customers going from having the ability to see one movie per day to just three per month.