1 00:00:04,120 --> 00:00:07,160 Speaker 1: Get in touch with technology with tech Stuff from how 2 00:00:07,200 --> 00:00:14,080 Speaker 1: stuff works dot com. Hey there, and welcome to tech Stuff. 3 00:00:14,160 --> 00:00:17,159 Speaker 1: I'm your host, Jonathan Strickland. I just happened to be 4 00:00:17,200 --> 00:00:20,240 Speaker 1: an executive producer at a little place called hell Stuff Works, 5 00:00:20,760 --> 00:00:25,400 Speaker 1: and I love all things tech and listeners, Susanna, don't 6 00:00:25,440 --> 00:00:27,480 Speaker 1: you cry for me? Asked if I could do an 7 00:00:27,520 --> 00:00:31,880 Speaker 1: episode about a company called movie Pass, which has made 8 00:00:31,920 --> 00:00:35,159 Speaker 1: the headlines a few times over the last year. So 9 00:00:35,200 --> 00:00:37,559 Speaker 1: where did this company come from? What does it do, 10 00:00:37,880 --> 00:00:40,680 Speaker 1: how does it make money? Does it make money? And 11 00:00:40,760 --> 00:00:45,120 Speaker 1: what is its future? Does it have a future? Well, first, 12 00:00:45,560 --> 00:00:47,199 Speaker 1: before I go into the history, I think it's a 13 00:00:47,240 --> 00:00:50,640 Speaker 1: good idea to explain what movie passes. Value proposition is 14 00:00:50,880 --> 00:00:54,600 Speaker 1: what it's all about. But things do change. It's it's 15 00:00:54,840 --> 00:00:58,520 Speaker 1: method and business plan has changed dramatically several times, especially 16 00:00:58,560 --> 00:01:01,160 Speaker 1: in the last year. But here's is a general overview. 17 00:01:01,880 --> 00:01:05,600 Speaker 1: More or less. The company offers up a subscription based 18 00:01:05,800 --> 00:01:10,640 Speaker 1: service for going to the movies to see movies in 19 00:01:10,760 --> 00:01:15,520 Speaker 1: movie theaters for a recurring regular fee. Subscribers get to 20 00:01:15,560 --> 00:01:18,639 Speaker 1: go to the movie theaters and watch movies a certain 21 00:01:18,720 --> 00:01:22,800 Speaker 1: number of times per month. That number changes depending upon 22 00:01:22,959 --> 00:01:26,240 Speaker 1: what era of movie passes history we're talking about. So 23 00:01:26,360 --> 00:01:28,480 Speaker 1: rather than buying a ticket every time you go to 24 00:01:28,520 --> 00:01:31,960 Speaker 1: the movie theater, you would subscribe to this service, and 25 00:01:32,160 --> 00:01:37,040 Speaker 1: at a participating theater you would be able to activate it. 26 00:01:37,240 --> 00:01:40,000 Speaker 1: And a lot of theaters did not want to participate, 27 00:01:40,040 --> 00:01:42,560 Speaker 1: but didn't have much choice in the matter. The business 28 00:01:42,560 --> 00:01:45,279 Speaker 1: plan left a lot of people wondering how the heck 29 00:01:45,520 --> 00:01:49,120 Speaker 1: movie pass was going to make money because someone still 30 00:01:49,160 --> 00:01:52,080 Speaker 1: has to pay for those movie tickets, and movie tickets 31 00:01:52,120 --> 00:01:57,560 Speaker 1: aren't necessarily cheap. So unless movie Pass is charging an 32 00:01:57,720 --> 00:02:02,440 Speaker 1: enormous subscription fee and as get incredible deals on movie 33 00:02:02,440 --> 00:02:05,440 Speaker 1: ticket prices with these movie theaters, they're going to start 34 00:02:05,480 --> 00:02:09,519 Speaker 1: losing money pretty fast. Well. According to the National Association 35 00:02:09,600 --> 00:02:13,080 Speaker 1: of Theater Owners, the average movie ticket price in the 36 00:02:13,160 --> 00:02:17,520 Speaker 1: United States hit eight dollars ninety seven cents in two 37 00:02:17,560 --> 00:02:20,160 Speaker 1: thousand seventeen, which is the most recent year they have 38 00:02:20,280 --> 00:02:24,560 Speaker 1: information available. That same page mentions that if you took 39 00:02:24,560 --> 00:02:28,840 Speaker 1: a the average price in nineteen seventy seven, that was 40 00:02:28,919 --> 00:02:31,799 Speaker 1: when it was a two dollars twenty three cents per ticket, 41 00:02:32,320 --> 00:02:35,480 Speaker 1: and then you adjusted that amount for inflation, it would 42 00:02:35,480 --> 00:02:38,480 Speaker 1: be the same as nine dollars and forty cents in 43 00:02:38,520 --> 00:02:41,959 Speaker 1: two thousand seventeen. So the point the Theater Association is 44 00:02:42,000 --> 00:02:46,040 Speaker 1: trying to make is well, sure, it costs more dollars 45 00:02:46,480 --> 00:02:50,519 Speaker 1: now than it did in nineteen seventy seven, but in actuality, 46 00:02:51,040 --> 00:02:54,840 Speaker 1: from a purchasing price standpoint, it's cheaper than it was 47 00:02:54,880 --> 00:02:57,240 Speaker 1: in nineteen seventy seven. So going to the movies as 48 00:02:57,240 --> 00:03:01,560 Speaker 1: a bargain now, that's just the national average. I would 49 00:03:01,600 --> 00:03:04,160 Speaker 1: not be surprised to hear from you guys in the 50 00:03:04,280 --> 00:03:08,639 Speaker 1: United States in various places that the ticket prices are 51 00:03:08,760 --> 00:03:12,000 Speaker 1: much different from eight dollars and ninety seven cents per ticket. 52 00:03:12,040 --> 00:03:14,760 Speaker 1: I can tell you right now, if movie ticket prices 53 00:03:15,120 --> 00:03:18,399 Speaker 1: were eight dollars in ninety seven cents here in Atlanta, 54 00:03:18,919 --> 00:03:23,320 Speaker 1: I'd go to the movies way more frequently. According to 55 00:03:23,800 --> 00:03:27,920 Speaker 1: a site called ex pattistan, which is a site that 56 00:03:27,919 --> 00:03:31,800 Speaker 1: helps determine the difference in cost of living in various cities, 57 00:03:31,919 --> 00:03:34,880 Speaker 1: so if you wanted to relocate somewhere, you could find 58 00:03:34,920 --> 00:03:37,720 Speaker 1: out how much money you would need to have your 59 00:03:37,800 --> 00:03:40,560 Speaker 1: your you know, quality of life in that new place. 60 00:03:41,000 --> 00:03:44,200 Speaker 1: The cost for two movie tickets in Atlanta, Georgia, that's 61 00:03:44,200 --> 00:03:47,920 Speaker 1: where I live, is twenty five dollars, which means if 62 00:03:47,920 --> 00:03:50,440 Speaker 1: you break that down by half, it's about twelve dollars 63 00:03:50,440 --> 00:03:54,040 Speaker 1: fifty cents per ticket. That is way higher than that 64 00:03:54,160 --> 00:03:57,360 Speaker 1: supposed national average of eight dollars and ninety seven cents, 65 00:03:57,960 --> 00:04:00,320 Speaker 1: and in other cities it's way more and so of 66 00:04:00,480 --> 00:04:03,200 Speaker 1: then twelve dollars fifty cents, especially once you start looking 67 00:04:03,240 --> 00:04:06,640 Speaker 1: at special screenings, like screenings where you can reserve a 68 00:04:06,720 --> 00:04:10,920 Speaker 1: seat or three D or imax, that kind of stuff. 69 00:04:10,960 --> 00:04:14,600 Speaker 1: So if you subscribed to movie Pass, and if the 70 00:04:14,640 --> 00:04:17,760 Speaker 1: subscription fee was something like ten bucks a month and 71 00:04:17,800 --> 00:04:21,000 Speaker 1: you saw more than one movie, then you would be 72 00:04:21,680 --> 00:04:23,560 Speaker 1: saving a huge amount of money. And how the heck 73 00:04:23,640 --> 00:04:26,800 Speaker 1: was the company supposed to make money that way? How 74 00:04:26,880 --> 00:04:29,119 Speaker 1: was it going to make money? If it's spending more 75 00:04:29,200 --> 00:04:32,000 Speaker 1: on tickets, then it's getting in subscription fees. That's part 76 00:04:32,040 --> 00:04:34,880 Speaker 1: of what we'll look into. So now let's take a 77 00:04:34,880 --> 00:04:36,839 Speaker 1: look at the birth of movie Pass and how it 78 00:04:36,880 --> 00:04:40,080 Speaker 1: all got started. This goes back to two thousand eleven 79 00:04:40,160 --> 00:04:42,280 Speaker 1: and a couple of co founders. So one of our 80 00:04:42,360 --> 00:04:45,960 Speaker 1: key players in this story is a guy named Stacy Spikes, 81 00:04:46,240 --> 00:04:48,880 Speaker 1: and Spikes got started in the nineteen eighties. He started 82 00:04:48,880 --> 00:04:52,320 Speaker 1: as a project manager for Motown Records, which is pretty 83 00:04:52,400 --> 00:04:55,280 Speaker 1: darn cool. He worked for folks like Spike Lee and 84 00:04:55,360 --> 00:04:58,600 Speaker 1: Queen Latifa, pretty awesome. He then went on to go 85 00:04:58,720 --> 00:05:02,400 Speaker 1: work with Sony and their music division before transitioning to 86 00:05:02,400 --> 00:05:06,279 Speaker 1: the head of marketing for Miramax. Back in nine he 87 00:05:06,360 --> 00:05:09,800 Speaker 1: founded a film festival in n in New York City, 88 00:05:10,120 --> 00:05:12,599 Speaker 1: and he had a history in the entertainment business that 89 00:05:12,720 --> 00:05:15,800 Speaker 1: dated a couple of decades, so he had been around 90 00:05:16,120 --> 00:05:19,480 Speaker 1: for a while before coming up with this idea. The 91 00:05:19,560 --> 00:05:22,280 Speaker 1: other key player in the early days it is a 92 00:05:22,320 --> 00:05:25,680 Speaker 1: guy named Hammett wat What had earned a degree from 93 00:05:25,760 --> 00:05:30,760 Speaker 1: Florida Agricultural and Mechanical University back in nineteen four. His 94 00:05:30,800 --> 00:05:34,200 Speaker 1: first job was with the New Africa Opportunity Fund, which 95 00:05:34,240 --> 00:05:37,520 Speaker 1: is an investment company that focused on opportunities in Africa, 96 00:05:37,760 --> 00:05:41,640 Speaker 1: and in two thousand he founded an advertising company called 97 00:05:41,760 --> 00:05:45,000 Speaker 1: Next Medium. He would serve as the CEO of that 98 00:05:45,040 --> 00:05:47,680 Speaker 1: company until two thousand seven, then he would transition to 99 00:05:47,880 --> 00:05:50,560 Speaker 1: Chairman of the board and then two years later he 100 00:05:50,600 --> 00:05:54,000 Speaker 1: would step down. So for three years while he was 101 00:05:54,120 --> 00:05:57,279 Speaker 1: also working at Next Medium, he also served as a 102 00:05:57,279 --> 00:06:01,599 Speaker 1: consultant for Nielsen Media Research. Then in two thousand nine, 103 00:06:01,680 --> 00:06:05,120 Speaker 1: he would become an entrepreneur in residence for True Ventures, 104 00:06:05,200 --> 00:06:09,400 Speaker 1: a venture capital firm. The two of them met and 105 00:06:09,760 --> 00:06:13,360 Speaker 1: got to talking about entertainment and movies and decided to 106 00:06:13,400 --> 00:06:16,200 Speaker 1: collaborate on a project with the goal of becoming the 107 00:06:16,320 --> 00:06:20,039 Speaker 1: Netflix of the movie going experience. Which is funny to 108 00:06:20,080 --> 00:06:22,680 Speaker 1: me because if you listen to my Netflix shows, you 109 00:06:22,680 --> 00:06:25,320 Speaker 1: know that Netflix started off to try and become the 110 00:06:25,400 --> 00:06:29,800 Speaker 1: Amazon of something. So movie Pass was trying to become 111 00:06:29,800 --> 00:06:32,320 Speaker 1: the Netflix of going to the movies. Netflix was trying 112 00:06:32,320 --> 00:06:36,599 Speaker 1: to become the Amazon of something. They weren't sure what 113 00:06:36,880 --> 00:06:40,800 Speaker 1: before they really got settled on the movie rental agency. 114 00:06:40,960 --> 00:06:43,599 Speaker 1: But never mind all that. The plan was to create 115 00:06:43,640 --> 00:06:46,679 Speaker 1: a service in which users would subscribe for a monthly 116 00:06:46,760 --> 00:06:51,520 Speaker 1: fee of fifty dollars a princely some In return, they 117 00:06:51,520 --> 00:06:54,839 Speaker 1: could see up to one movie per day every day 118 00:06:54,880 --> 00:06:58,520 Speaker 1: for a month. Initially, the two co founders encountered a 119 00:06:58,680 --> 00:07:01,200 Speaker 1: ton of resistance for an theater owners when they were 120 00:07:01,200 --> 00:07:04,800 Speaker 1: approaching them regarding this plan, and so their first attempt 121 00:07:05,360 --> 00:07:12,360 Speaker 1: was not destined for greatness. Uh what and Spikes thought 122 00:07:12,560 --> 00:07:15,440 Speaker 1: maybe what they could do is launch a pilot program 123 00:07:15,480 --> 00:07:19,320 Speaker 1: a small version of their idea tested out, get some 124 00:07:19,440 --> 00:07:22,640 Speaker 1: data and then use that to pitch to movie theater 125 00:07:22,720 --> 00:07:25,120 Speaker 1: owners in the future and maybe get a better chance 126 00:07:25,120 --> 00:07:26,920 Speaker 1: of it, and they decided they would use the San 127 00:07:26,960 --> 00:07:30,840 Speaker 1: Francisco area as their test site. Their proposal got a 128 00:07:30,880 --> 00:07:35,280 Speaker 1: lot of interest from potential customers. Apparently about nineteen thousand 129 00:07:35,280 --> 00:07:37,920 Speaker 1: people signed up on in one day to try and 130 00:07:37,960 --> 00:07:40,760 Speaker 1: become part of this program, and Spikes and What had 131 00:07:40,800 --> 00:07:44,440 Speaker 1: ideas of how their business could benefit movie theater owners. 132 00:07:44,720 --> 00:07:47,400 Speaker 1: They had visions of using the data from their service 133 00:07:47,680 --> 00:07:51,080 Speaker 1: to help theaters develop more effective marketing plans. Studios would 134 00:07:51,080 --> 00:07:53,560 Speaker 1: find the data helpful too, and that access to this 135 00:07:53,680 --> 00:07:57,560 Speaker 1: data could lead to increased patronage of theaters and even 136 00:07:57,560 --> 00:08:01,560 Speaker 1: increase the number of concessions purchases. And since concessions is 137 00:08:01,600 --> 00:08:04,000 Speaker 1: where movie theaters really make a lot of their revenue, 138 00:08:04,200 --> 00:08:06,559 Speaker 1: which is due to the complicated nature of box office 139 00:08:06,560 --> 00:08:09,600 Speaker 1: sales and how much money goes to studios, this could 140 00:08:09,600 --> 00:08:12,040 Speaker 1: actually be a strong motivator for theaters to play ball, 141 00:08:12,120 --> 00:08:16,800 Speaker 1: but it did not work. Instead, it all fell apart. So, 142 00:08:17,400 --> 00:08:20,720 Speaker 1: according to the stories that broke around this time, major 143 00:08:20,800 --> 00:08:24,360 Speaker 1: theater chains were not told about this pilot program and 144 00:08:24,400 --> 00:08:27,840 Speaker 1: they objected to being included in it. They said they 145 00:08:27,880 --> 00:08:31,160 Speaker 1: would not participate in the program, and this was just 146 00:08:31,320 --> 00:08:34,160 Speaker 1: at you know, days before the program was supposed to 147 00:08:34,240 --> 00:08:36,840 Speaker 1: launch over the course of a weekend. Now this is 148 00:08:36,840 --> 00:08:39,880 Speaker 1: pretty interesting to me, since the theory movie Pass would 149 00:08:39,880 --> 00:08:42,760 Speaker 1: be buying every ticket at full price from the theater, 150 00:08:42,920 --> 00:08:46,319 Speaker 1: so people going to see movies would pay a flat 151 00:08:46,400 --> 00:08:49,560 Speaker 1: monthly fee for the privilege to movie Pass, but the 152 00:08:49,559 --> 00:08:51,720 Speaker 1: theaters themselves would still get the full price of a 153 00:08:51,760 --> 00:08:55,920 Speaker 1: movie ticket for every single screening. For the pilot program, 154 00:08:55,960 --> 00:08:59,320 Speaker 1: a third party supplier was set to purchase these individual 155 00:08:59,360 --> 00:09:03,280 Speaker 1: tickets on half of movie Pass. In order for this 156 00:09:03,360 --> 00:09:06,440 Speaker 1: to work moving forward and to scale up beyond just 157 00:09:06,559 --> 00:09:10,040 Speaker 1: being a San Francisco pilot program, the theaters were going 158 00:09:10,080 --> 00:09:12,800 Speaker 1: to need to participate with movie Pass. There was gonna 159 00:09:12,840 --> 00:09:15,199 Speaker 1: have to be some sort of partnership here and honor 160 00:09:15,320 --> 00:09:18,960 Speaker 1: vouchers from that company to allow movie Pass customers inside 161 00:09:18,960 --> 00:09:22,800 Speaker 1: to watch a movie. Then, presumably the theaters would invoice 162 00:09:22,880 --> 00:09:26,600 Speaker 1: movie Pass for each ticket. But two of those chains, 163 00:09:26,840 --> 00:09:30,760 Speaker 1: AMC and Landmark, objected to this whole enterprise and said 164 00:09:30,800 --> 00:09:34,200 Speaker 1: they would not participate. The initial beta test was to 165 00:09:34,240 --> 00:09:38,280 Speaker 1: cover twenty one theaters and am C owned six of them, 166 00:09:38,480 --> 00:09:41,560 Speaker 1: so because they said they would not participate, Spikes and 167 00:09:41,559 --> 00:09:44,240 Speaker 1: What had to make the tough decision to step back 168 00:09:44,600 --> 00:09:48,080 Speaker 1: put this pilot program on pause. So they had to 169 00:09:48,120 --> 00:09:50,400 Speaker 1: tell all their customers, I'm sorry, we're not actually going 170 00:09:50,440 --> 00:09:53,360 Speaker 1: to do this after all and put their business on 171 00:09:53,440 --> 00:09:57,280 Speaker 1: what they called a temporary hiatus. It was a bad 172 00:09:57,400 --> 00:10:01,000 Speaker 1: enough start to lead some analysts to that the company 173 00:10:01,200 --> 00:10:04,800 Speaker 1: was done before it could even begin. It was difficult 174 00:10:04,800 --> 00:10:07,679 Speaker 1: to imagine a scenario in which the business plan would 175 00:10:07,679 --> 00:10:12,320 Speaker 1: work unless movie Pass could establish some sort of major 176 00:10:12,440 --> 00:10:16,080 Speaker 1: discount ticket relationship with various movie theater owners and chains, 177 00:10:16,559 --> 00:10:20,360 Speaker 1: and that just didn't seem likely. But the company wasn't 178 00:10:20,440 --> 00:10:23,440 Speaker 1: down for the count yet. I'll explain more in a second, 179 00:10:23,480 --> 00:10:26,880 Speaker 1: but first let's take a quick break to thank our sponsor. 180 00:10:34,559 --> 00:10:38,080 Speaker 1: Spikes and Watt tried again a few months after the 181 00:10:38,160 --> 00:10:42,320 Speaker 1: abandoned pilot program, and this time the plan was slightly different. 182 00:10:42,360 --> 00:10:45,760 Speaker 1: They were going to provide vouchers to customers. So a 183 00:10:45,800 --> 00:10:48,200 Speaker 1: customer would sign up for the program, and when he 184 00:10:48,280 --> 00:10:51,080 Speaker 1: or she wanted to see a movie, they would select 185 00:10:51,120 --> 00:10:52,800 Speaker 1: the film and time that they wanted to see it. 186 00:10:53,080 --> 00:10:56,439 Speaker 1: And this would trigger a voucher to be sent to them, 187 00:10:56,480 --> 00:11:00,200 Speaker 1: which they would download and print. Each voucher print out 188 00:11:00,200 --> 00:11:03,800 Speaker 1: included a single use credit card number that was good 189 00:11:03,800 --> 00:11:07,160 Speaker 1: for the purchase price of the movie ticket. But this 190 00:11:07,240 --> 00:11:12,000 Speaker 1: approach didn't make customers or theater employees happy. It was 191 00:11:12,000 --> 00:11:14,520 Speaker 1: a hassle to have to print a voucher at home 192 00:11:14,559 --> 00:11:17,679 Speaker 1: and then bring it with you, and the transactions at 193 00:11:17,720 --> 00:11:20,440 Speaker 1: the theaters took a lot of time to process because 194 00:11:20,760 --> 00:11:24,440 Speaker 1: cashier's had to manually input the single use credit card 195 00:11:24,520 --> 00:11:27,280 Speaker 1: numbers into a system, then they had to wait for 196 00:11:27,320 --> 00:11:30,960 Speaker 1: the system to validate the purchase. And then there were 197 00:11:31,000 --> 00:11:34,400 Speaker 1: the allegations that movie chains were putting pressure on a 198 00:11:34,440 --> 00:11:37,720 Speaker 1: company called Hollywood Movie Money that was the company that 199 00:11:37,800 --> 00:11:40,760 Speaker 1: was actually in charge of producing the vouchers on behalf 200 00:11:40,800 --> 00:11:44,960 Speaker 1: of movie Pass. And this Hollywood Movie Money under pressure 201 00:11:45,080 --> 00:11:48,240 Speaker 1: pulls out of this agreement, and this attempt ends up 202 00:11:48,240 --> 00:11:51,160 Speaker 1: fizzling out too. So this is the second attempt to 203 00:11:51,160 --> 00:11:54,880 Speaker 1: get movie Pass going, and the second time it fails. However, 204 00:11:55,360 --> 00:11:58,320 Speaker 1: Spikes still wasn't discouraged. He went back to the drawing 205 00:11:58,360 --> 00:12:01,240 Speaker 1: board again and a few months later he returned with 206 00:12:01,400 --> 00:12:05,560 Speaker 1: a new version of movie Pass. This one was a 207 00:12:05,600 --> 00:12:08,640 Speaker 1: little different from the earlier proposed one. The monthly fee 208 00:12:08,640 --> 00:12:12,199 Speaker 1: you'd pay would be dependent upon where you lived, because, 209 00:12:12,200 --> 00:12:15,520 Speaker 1: as I mentioned, movie tickets cost a different amount depending 210 00:12:15,600 --> 00:12:18,599 Speaker 1: upon where you are, and so if you lived in 211 00:12:18,640 --> 00:12:21,760 Speaker 1: a more expensive market where the average movie ticket price 212 00:12:21,920 --> 00:12:24,960 Speaker 1: was higher, you'd have to pay a higher monthly fee 213 00:12:25,280 --> 00:12:27,960 Speaker 1: to be a subscriber to movie Pass compared to someone 214 00:12:28,000 --> 00:12:31,040 Speaker 1: who lived in a lower cost market. So the subscription 215 00:12:31,080 --> 00:12:33,600 Speaker 1: fees ranged from twenty nine dollars on the low end 216 00:12:33,880 --> 00:12:36,040 Speaker 1: to thirty four dollars on the high end, which was 217 00:12:36,080 --> 00:12:38,560 Speaker 1: still a huge bargain when you consider the pilot program 218 00:12:38,600 --> 00:12:41,560 Speaker 1: was going to cost fifty bucks, and in general they 219 00:12:41,600 --> 00:12:45,840 Speaker 1: were aiming at a price that would represent roughly three 220 00:12:46,480 --> 00:12:49,280 Speaker 1: films a month. That was kind of how they came 221 00:12:49,320 --> 00:12:52,320 Speaker 1: to the conclusion that this would be the right subscription price. 222 00:12:52,679 --> 00:12:55,800 Speaker 1: Customers would download an app and they would get a 223 00:12:55,840 --> 00:13:00,400 Speaker 1: special debit card along with their subscription. The app depended 224 00:13:00,480 --> 00:13:04,720 Speaker 1: upon a smartphone's geolocation capabilities, and here's how it worked. 225 00:13:05,240 --> 00:13:07,880 Speaker 1: Let's say that I have subscribed to movie Pass. I'm 226 00:13:07,880 --> 00:13:11,160 Speaker 1: a movie Pass customer. I have decided I am going 227 00:13:11,200 --> 00:13:16,280 Speaker 1: to go and watch a film at my local cinema, Plextorium, 228 00:13:16,320 --> 00:13:19,040 Speaker 1: and I've got my smartphone and I look to see 229 00:13:19,040 --> 00:13:21,760 Speaker 1: which movies are playing. Let's say I'm in for a 230 00:13:21,880 --> 00:13:24,680 Speaker 1: bad time. I want to watch the matrix reloaded, so 231 00:13:24,720 --> 00:13:27,440 Speaker 1: I choose the matrix reloaded. I choose the time I'm 232 00:13:27,480 --> 00:13:29,720 Speaker 1: going to go see it. I get to the theater, 233 00:13:29,880 --> 00:13:34,880 Speaker 1: I activate my app the UH the app shows my selection, 234 00:13:35,160 --> 00:13:39,000 Speaker 1: It detects from my geolocation data that I am in 235 00:13:39,120 --> 00:13:41,880 Speaker 1: fact at the theater and sends a message back to 236 00:13:41,920 --> 00:13:46,480 Speaker 1: movie Pass headquarters. That message authorizes the debit card that 237 00:13:46,640 --> 00:13:51,320 Speaker 1: is associated with my account to become active for thirty minutes, 238 00:13:51,920 --> 00:13:54,000 Speaker 1: and the debit card works the same way as any 239 00:13:54,040 --> 00:13:57,120 Speaker 1: other debit or credit card does. So in theory, at least, 240 00:13:57,480 --> 00:14:01,880 Speaker 1: movie theaters that accepted that tip of card would have 241 00:14:01,960 --> 00:14:04,800 Speaker 1: nothing to complain about. They could process the payment just 242 00:14:04,920 --> 00:14:07,840 Speaker 1: like any other ticket purchase, and they would get the 243 00:14:07,840 --> 00:14:10,960 Speaker 1: full purchase price at that point, and I would get 244 00:14:11,000 --> 00:14:13,160 Speaker 1: to go in and see the movie. Using this approach, 245 00:14:13,520 --> 00:14:17,240 Speaker 1: movie Pass launched and invite only beta test, and immediately 246 00:14:17,640 --> 00:14:20,880 Speaker 1: there were questions from the industry, like, how could such 247 00:14:20,920 --> 00:14:23,880 Speaker 1: a business remain in operation long if people were you know, 248 00:14:24,960 --> 00:14:27,800 Speaker 1: using the service they were paying for. If you actually 249 00:14:27,800 --> 00:14:32,080 Speaker 1: went and saw more than three movies in your region, 250 00:14:32,800 --> 00:14:35,440 Speaker 1: then every single time you're going to see a movie, 251 00:14:35,520 --> 00:14:39,520 Speaker 1: you're costing movie pass money. How could you possibly stay 252 00:14:39,520 --> 00:14:43,240 Speaker 1: in business? I mean, if the average movie ticket in 253 00:14:43,320 --> 00:14:46,120 Speaker 1: my city cost more than twelve dollars a pop, we're 254 00:14:46,160 --> 00:14:48,280 Speaker 1: going to round it down to twelve dollars. Will say 255 00:14:48,280 --> 00:14:50,000 Speaker 1: that my subscription is on the high end at thirty 256 00:14:50,040 --> 00:14:53,280 Speaker 1: four dollars per month. If I see more than two films, 257 00:14:53,640 --> 00:14:56,200 Speaker 1: movie passes losing money on that deal, if they're having 258 00:14:56,200 --> 00:15:00,320 Speaker 1: to pay full price for the tickets, and presumably least 259 00:15:00,320 --> 00:15:02,280 Speaker 1: at first, I'm going to see as many movies as 260 00:15:02,280 --> 00:15:05,000 Speaker 1: I possibly can. I mean, typically when people sign up 261 00:15:05,000 --> 00:15:09,120 Speaker 1: to a news service like this, they binge initially. That 262 00:15:09,240 --> 00:15:12,840 Speaker 1: might tail off after a while, but it means that 263 00:15:12,880 --> 00:15:16,200 Speaker 1: the more customers you get, the more expensive it is 264 00:15:16,240 --> 00:15:18,960 Speaker 1: to operate. You're not making more money, you're actually losing 265 00:15:19,000 --> 00:15:23,800 Speaker 1: more money in that case. So it did not take 266 00:15:23,920 --> 00:15:27,440 Speaker 1: long for people to say, how can this service stick around? 267 00:15:27,520 --> 00:15:29,800 Speaker 1: I mean, not only does it cost them to operate 268 00:15:30,200 --> 00:15:32,920 Speaker 1: in this manner, they still have all the other expenses 269 00:15:32,960 --> 00:15:35,200 Speaker 1: that any other company has. You know, to pay for 270 00:15:35,240 --> 00:15:38,600 Speaker 1: the back end, to pay for office space, to pay salaries. 271 00:15:39,040 --> 00:15:41,520 Speaker 1: All that stuff still exists for this company too, on 272 00:15:41,640 --> 00:15:44,520 Speaker 1: top of the fact that their business plan means they 273 00:15:44,560 --> 00:15:48,240 Speaker 1: actually lose money the more people use their service. In 274 00:15:48,280 --> 00:15:51,160 Speaker 1: an interview with The New York Times, Spikes said that 275 00:15:51,240 --> 00:15:56,280 Speaker 1: his long term plans included revenue from several streams besides 276 00:15:56,480 --> 00:15:59,760 Speaker 1: subscription fees. So he was pressed on this point. They 277 00:15:59,760 --> 00:16:03,920 Speaker 1: were asked, you know, he was asked, rather, what exactly 278 00:16:03,920 --> 00:16:06,080 Speaker 1: do you plan to do? What what are these other 279 00:16:06,360 --> 00:16:10,120 Speaker 1: streams of revenue, and so he answered the question. He said, 280 00:16:10,520 --> 00:16:13,040 Speaker 1: there are three big ones, and that would be advertising, 281 00:16:13,160 --> 00:16:16,920 Speaker 1: which is pretty straightforward. That means that he would allow 282 00:16:17,080 --> 00:16:21,040 Speaker 1: other companies to advertise through the app, and movie Pass 283 00:16:21,040 --> 00:16:23,080 Speaker 1: would be able to supplement the money coming in from 284 00:16:23,400 --> 00:16:27,520 Speaker 1: subscriptions by the fact that people are viewing ads on 285 00:16:27,560 --> 00:16:31,160 Speaker 1: the app itself. Then there was sell through. So what 286 00:16:31,200 --> 00:16:33,480 Speaker 1: does that mean? What does sell through mean? What's sort 287 00:16:33,480 --> 00:16:37,560 Speaker 1: of like up selling in the retail space or impulse shopping. 288 00:16:37,680 --> 00:16:41,080 Speaker 1: It's taking the opportunity to sell stuff related to the 289 00:16:41,080 --> 00:16:44,560 Speaker 1: movies that customers are seeing. So movie Pass knows what 290 00:16:44,680 --> 00:16:46,800 Speaker 1: movie I'm gonna go see. I have to select it, 291 00:16:47,160 --> 00:16:49,760 Speaker 1: I select the title and the time, and it ends 292 00:16:49,840 --> 00:16:53,640 Speaker 1: up sending me the um the authorization for me to 293 00:16:53,680 --> 00:16:57,200 Speaker 1: purchase my movie ticket. But that means I'm I'm telling 294 00:16:57,240 --> 00:16:59,080 Speaker 1: movie Pass each time I go to see a movie 295 00:16:59,120 --> 00:17:01,240 Speaker 1: what it is I'm going to see and where I'm 296 00:17:01,280 --> 00:17:06,560 Speaker 1: seeing it. Based on that, they can send me data 297 00:17:06,600 --> 00:17:09,160 Speaker 1: about stuff that I might want to purchase that's related 298 00:17:09,359 --> 00:17:11,320 Speaker 1: to the film I'm seeing. If I've just gone to 299 00:17:11,320 --> 00:17:14,480 Speaker 1: see the latest Star Wars film, movie Pass might present 300 00:17:14,560 --> 00:17:17,560 Speaker 1: me with offers to purchase the earlier films in the 301 00:17:17,600 --> 00:17:21,000 Speaker 1: Star Wars saga on Blu Ray, or it might have 302 00:17:21,320 --> 00:17:25,320 Speaker 1: links to purchase merchandise related to Star Wars if I 303 00:17:25,359 --> 00:17:27,560 Speaker 1: want to get, you know, a real geeky Star Wars 304 00:17:27,560 --> 00:17:30,359 Speaker 1: T shirt or whatever, and and goodness knows I have 305 00:17:30,400 --> 00:17:34,320 Speaker 1: plenty of those. So that was the second revenue source. 306 00:17:34,520 --> 00:17:39,880 Speaker 1: The third was about data. The data side is one 307 00:17:39,960 --> 00:17:44,399 Speaker 1: I find particularly interesting, especially since I've recently done so 308 00:17:44,440 --> 00:17:49,360 Speaker 1: many episodes about privacy and security. Now, according to Spikes nineties, 309 00:17:49,440 --> 00:17:54,160 Speaker 1: six percent of all movie tickets sold were from walk ups, 310 00:17:54,520 --> 00:17:58,520 Speaker 1: meaning the vast majority of seats at movie theaters were 311 00:17:58,520 --> 00:18:02,639 Speaker 1: being sold at the ticket counter, not in advance, and 312 00:18:02,680 --> 00:18:06,280 Speaker 1: the challenge for theaters and for studios is that walk 313 00:18:06,359 --> 00:18:09,679 Speaker 1: ups give very little information about the people coming to 314 00:18:09,800 --> 00:18:13,199 Speaker 1: see those individual films. You can see at a glance 315 00:18:13,200 --> 00:18:16,000 Speaker 1: which movies are performing well, you can see in ticket 316 00:18:16,040 --> 00:18:18,040 Speaker 1: sales which ones are doing well, but you don't know 317 00:18:18,160 --> 00:18:22,320 Speaker 1: very much about the individual audiences. Spikes argued that with 318 00:18:22,359 --> 00:18:25,960 Speaker 1: a program like movie Pass, theaters and studios would learn 319 00:18:26,200 --> 00:18:29,040 Speaker 1: a lot about the type of people who go to 320 00:18:29,080 --> 00:18:32,320 Speaker 1: see specific kinds of films, and that this in turn 321 00:18:32,760 --> 00:18:36,080 Speaker 1: could help guide marketing efforts to maximize the number of 322 00:18:36,119 --> 00:18:39,640 Speaker 1: people to see those movies, and so movie Pass would 323 00:18:39,720 --> 00:18:43,120 Speaker 1: end up making some of its money by selling information 324 00:18:43,200 --> 00:18:48,000 Speaker 1: about its customers to other companies. Spikes would say, quote 325 00:18:48,359 --> 00:18:51,840 Speaker 1: our technology, lets us say this is the type of 326 00:18:51,880 --> 00:18:55,160 Speaker 1: people who are going, this is when they went, this 327 00:18:55,240 --> 00:18:57,800 Speaker 1: is what time of day it was. We can break 328 00:18:57,840 --> 00:19:01,840 Speaker 1: it up by age, by race, sex. The only thing 329 00:19:01,880 --> 00:19:04,119 Speaker 1: we can't tell you is what they ate for lunch 330 00:19:04,440 --> 00:19:08,600 Speaker 1: and what their blood type is. End quote. Those probably 331 00:19:08,600 --> 00:19:11,480 Speaker 1: sound like pretty cool concepts to companies, but it might 332 00:19:11,560 --> 00:19:14,840 Speaker 1: come across as a little bit orwellian for your average 333 00:19:14,840 --> 00:19:18,000 Speaker 1: movie fan. In addition, I'm sure there was a hope 334 00:19:18,040 --> 00:19:20,600 Speaker 1: that people would sign up for the service and then 335 00:19:20,640 --> 00:19:24,199 Speaker 1: just you know, not use it that frequently. Kind of 336 00:19:24,280 --> 00:19:26,200 Speaker 1: like how some people will sign up for a gym 337 00:19:26,240 --> 00:19:29,800 Speaker 1: membership and then you know, they don't go to the gym. 338 00:19:29,840 --> 00:19:31,959 Speaker 1: So the gym makes money whether you're there or not, 339 00:19:32,359 --> 00:19:34,639 Speaker 1: and if you're not there, you're not causing wear and 340 00:19:34,680 --> 00:19:38,080 Speaker 1: tear on equipment. So gems love it when you sign 341 00:19:38,160 --> 00:19:40,320 Speaker 1: up and you don't go, And maybe that was what 342 00:19:40,359 --> 00:19:42,679 Speaker 1: movie Pass was kind of hoping for. Two and so 343 00:19:42,840 --> 00:19:46,960 Speaker 1: movie Pass began normal operations by early two thousand thirteen. 344 00:19:47,280 --> 00:19:50,160 Speaker 1: It had rolled out in many markets. At that time, 345 00:19:50,240 --> 00:19:54,399 Speaker 1: the only app available was for the iPhone, though you 346 00:19:54,440 --> 00:19:57,840 Speaker 1: could access the movie Pass system through a mobile website 347 00:19:57,880 --> 00:19:59,960 Speaker 1: if you happen to have a smartphone using a diff 348 00:20:00,040 --> 00:20:04,399 Speaker 1: front operating system than iOS, Every user or household member 349 00:20:04,440 --> 00:20:07,320 Speaker 1: would have to have his or her own subscription and 350 00:20:07,400 --> 00:20:11,040 Speaker 1: personal card. They didn't have an option for signing up 351 00:20:11,040 --> 00:20:14,159 Speaker 1: for like a family account or anything like that. The 352 00:20:14,200 --> 00:20:17,240 Speaker 1: app would depend upon that geolocation data to confirm that 353 00:20:17,280 --> 00:20:20,000 Speaker 1: you were actually at the theater to buy a ticket 354 00:20:20,080 --> 00:20:22,680 Speaker 1: before you were allowed to use the associated cards. That way, 355 00:20:22,720 --> 00:20:24,840 Speaker 1: you couldn't just claim that you're going to go see 356 00:20:24,840 --> 00:20:28,240 Speaker 1: a movie and then use your activated debit card to 357 00:20:28,280 --> 00:20:31,440 Speaker 1: buy something else like a cheeseburger. And after a one 358 00:20:31,480 --> 00:20:34,800 Speaker 1: month trial period, users would be committed to a year 359 00:20:34,840 --> 00:20:38,320 Speaker 1: long plan with cancelation fees that would range from twenty 360 00:20:38,320 --> 00:20:41,679 Speaker 1: dollars to seventy five dollars. The amount of the cancelation 361 00:20:41,720 --> 00:20:44,040 Speaker 1: fee depended upon how long you had been a member. 362 00:20:44,359 --> 00:20:46,320 Speaker 1: If you wanted to cancel right away, you're gonna have 363 00:20:46,359 --> 00:20:48,520 Speaker 1: to pay pay pay. So I began to grow its 364 00:20:48,520 --> 00:20:51,920 Speaker 1: customer base, and because it was using a Discover card 365 00:20:52,119 --> 00:20:55,840 Speaker 1: methodology for payments originally anyway, later on they would change 366 00:20:55,880 --> 00:20:58,399 Speaker 1: that the master card. There wasn't a whole lot of 367 00:20:58,400 --> 00:21:02,840 Speaker 1: movie theater chain could do besides protests the whole concept 368 00:21:03,400 --> 00:21:06,280 Speaker 1: if in fact, they took Discover Card because the amount 369 00:21:06,280 --> 00:21:10,560 Speaker 1: of the method of payment was pretty straightforward. Uh So 370 00:21:10,680 --> 00:21:13,680 Speaker 1: things continued. The one thing they really could do, if 371 00:21:13,680 --> 00:21:16,040 Speaker 1: they really wanted to, would be to put up a 372 00:21:16,040 --> 00:21:19,440 Speaker 1: fuss and demand that Movie Pass not include their theaters 373 00:21:20,080 --> 00:21:22,440 Speaker 1: in the app. Since you had to use the app 374 00:21:22,480 --> 00:21:25,199 Speaker 1: to pick the daytime and title that you plan to 375 00:21:25,200 --> 00:21:27,960 Speaker 1: see and which movie theater you were going to, they 376 00:21:28,000 --> 00:21:30,600 Speaker 1: could at least in theory demand that their locations be 377 00:21:30,720 --> 00:21:34,160 Speaker 1: left off of Movie Passes service, but that was about it. Well, 378 00:21:35,440 --> 00:21:39,600 Speaker 1: things would rapidly change for movie Pass over the next 379 00:21:39,640 --> 00:21:42,159 Speaker 1: few years. I'll explain more in just a second, but 380 00:21:42,280 --> 00:21:45,800 Speaker 1: first let's take another quick break to thank our sponsor. 381 00:21:53,520 --> 00:21:57,000 Speaker 1: In two thousand and fourteen, movie Passes experience as a 382 00:21:57,000 --> 00:22:01,640 Speaker 1: company was starting to hit some bumps, and this would 383 00:22:01,680 --> 00:22:05,520 Speaker 1: continue up till today. On the one hand, movie Pass 384 00:22:05,600 --> 00:22:09,199 Speaker 1: was able to forge something of an uneasy alliance with 385 00:22:09,440 --> 00:22:14,520 Speaker 1: the movie theater chain AMC, which had been a pretty 386 00:22:14,760 --> 00:22:18,960 Speaker 1: reluctant participant up to this point and would continue to 387 00:22:18,960 --> 00:22:22,159 Speaker 1: be actually, but this deal was sort of a pilot 388 00:22:22,200 --> 00:22:27,240 Speaker 1: program for theaters in Boston, Massachusetts and Denver, Colorado. There 389 00:22:27,240 --> 00:22:31,720 Speaker 1: were two tiers of subscriptions that users could choose. For 390 00:22:31,800 --> 00:22:34,560 Speaker 1: thirty five dollars a month, subscribers would be able to 391 00:22:34,560 --> 00:22:38,480 Speaker 1: see films in standard two D format at AMC theaters, 392 00:22:38,560 --> 00:22:40,560 Speaker 1: and for forty five dollars a month, they could see 393 00:22:40,560 --> 00:22:44,399 Speaker 1: films in any format, including three D or IMAX. Now. 394 00:22:44,440 --> 00:22:47,840 Speaker 1: According to Business Insider, at this point, movie pass had 395 00:22:47,880 --> 00:22:52,200 Speaker 1: about thirty thousand subscribers, and the company began to consult 396 00:22:52,400 --> 00:22:54,800 Speaker 1: with an expert in the field, and it's a guy 397 00:22:54,840 --> 00:22:58,000 Speaker 1: I talked about recently in the episodes about Netflix. So 398 00:22:58,040 --> 00:22:59,760 Speaker 1: if you heard those episodes, you're gonna hear a name 399 00:22:59,760 --> 00:23:02,720 Speaker 1: that's it was kind of familiar. That would be Mitch Low. 400 00:23:03,359 --> 00:23:06,359 Speaker 1: Mitch Low was not only instrumental in getting Netflix up 401 00:23:06,359 --> 00:23:08,920 Speaker 1: and running, but also after he left that company, he 402 00:23:08,960 --> 00:23:11,639 Speaker 1: would go on to co found the company red Box. 403 00:23:12,359 --> 00:23:14,920 Speaker 1: But on the other hand, two thousand fourteen was also 404 00:23:15,000 --> 00:23:18,439 Speaker 1: a tough year for the movie theaters in general because 405 00:23:19,119 --> 00:23:22,360 Speaker 1: from a box office standpoint, gross revenue was down more 406 00:23:22,400 --> 00:23:26,760 Speaker 1: than five percent compared to two thousand thirteen. That might 407 00:23:26,800 --> 00:23:28,840 Speaker 1: have been one of the reasons AMC was actually willing 408 00:23:28,880 --> 00:23:31,800 Speaker 1: to go through with this partnership, and that partnership would 409 00:23:31,800 --> 00:23:35,080 Speaker 1: begin in early two thousand fifteen. A year later, at 410 00:23:35,119 --> 00:23:38,520 Speaker 1: the end of the pilot program, the two companies participated 411 00:23:38,560 --> 00:23:41,240 Speaker 1: in a data analysis study to see how it all 412 00:23:41,280 --> 00:23:44,679 Speaker 1: shook out, and the white paper would come out in 413 00:23:44,800 --> 00:23:48,280 Speaker 1: the spring of two thousand fifteen. And the white paper 414 00:23:48,280 --> 00:23:51,240 Speaker 1: which would come out that spring said that the average 415 00:23:51,280 --> 00:23:55,240 Speaker 1: theater customer was going to a MC movie theaters about 416 00:23:55,280 --> 00:23:58,760 Speaker 1: one and a half times per month on average. Before 417 00:23:58,800 --> 00:24:01,040 Speaker 1: the pilot program. So you know, when you break out 418 00:24:01,040 --> 00:24:03,240 Speaker 1: the average of all the people going who were not 419 00:24:04,760 --> 00:24:07,440 Speaker 1: in this program, at first, it ended up being one 420 00:24:07,440 --> 00:24:09,800 Speaker 1: and a half times a month. Then once the pilot 421 00:24:09,840 --> 00:24:12,160 Speaker 1: program began, AMC saw that number go up to three 422 00:24:12,160 --> 00:24:14,960 Speaker 1: times per month, which was not surprising people went to 423 00:24:15,000 --> 00:24:18,440 Speaker 1: the movies more after subscribing, but then it settled back 424 00:24:18,480 --> 00:24:20,600 Speaker 1: down to about one and a half times a month 425 00:24:20,720 --> 00:24:24,720 Speaker 1: after that. That led AMC to argue that this partnership 426 00:24:24,800 --> 00:24:28,280 Speaker 1: wasn't terribly valuable for the company, that they could actually 427 00:24:28,640 --> 00:24:32,680 Speaker 1: make more money launching their own subscription service, because if 428 00:24:33,160 --> 00:24:37,520 Speaker 1: they only experienced this rush of usage in the first 429 00:24:37,560 --> 00:24:39,920 Speaker 1: month and then it tapered off again, it would make 430 00:24:39,920 --> 00:24:44,280 Speaker 1: more sense if they could just keep all the money. So, uh, 431 00:24:44,440 --> 00:24:47,719 Speaker 1: you know, if you're if you're paying a premium price 432 00:24:47,800 --> 00:24:49,480 Speaker 1: to go to the movie theater and you only go 433 00:24:49,600 --> 00:24:52,680 Speaker 1: one and a half times a month on average, then 434 00:24:53,160 --> 00:24:55,480 Speaker 1: chances are you're paying more for the subscription than you 435 00:24:55,480 --> 00:24:57,800 Speaker 1: would if you went to the theater and just bought 436 00:24:57,840 --> 00:25:01,200 Speaker 1: individual tickets. So AMC would win out if it were 437 00:25:01,240 --> 00:25:02,960 Speaker 1: in charge of the whole show. So they kind of 438 00:25:03,040 --> 00:25:07,200 Speaker 1: canceled or concluded this whole partnership. In two thousand sixteen, 439 00:25:07,680 --> 00:25:10,919 Speaker 1: Mitch Lowe would go from being a consultant to movie 440 00:25:10,920 --> 00:25:15,320 Speaker 1: Pass to becoming the CEO of movie Pass. Spikes, who 441 00:25:15,440 --> 00:25:19,600 Speaker 1: had been CEO, would become co chairman alongside fellow co 442 00:25:19,800 --> 00:25:25,240 Speaker 1: founder Hammett Watt. The following year, in data company Helios 443 00:25:25,359 --> 00:25:29,600 Speaker 1: and Matheson Analytics announced it would acquire a majority stake 444 00:25:29,760 --> 00:25:33,720 Speaker 1: in movie Pass for a reported twenty seven million dollars. 445 00:25:34,280 --> 00:25:36,560 Speaker 1: And while that was big news, the first move out 446 00:25:36,600 --> 00:25:40,040 Speaker 1: the gate really made headlines, at least among movie Pass fans. 447 00:25:40,280 --> 00:25:43,520 Speaker 1: The company would offer a brand new plan for nine 448 00:25:43,600 --> 00:25:48,800 Speaker 1: dollars per month. You could see quote unlimited movies in 449 00:25:48,920 --> 00:25:53,840 Speaker 1: theaters with no blackout dates, no contracts end quote. That 450 00:25:53,920 --> 00:25:58,480 Speaker 1: announcement was crazy. I mean, there's barely more than a 451 00:25:58,600 --> 00:26:03,080 Speaker 1: single ticket at the the average price in the US, 452 00:26:03,240 --> 00:26:06,359 Speaker 1: right like nine a month. That's like one dollar more 453 00:26:07,080 --> 00:26:10,080 Speaker 1: than what the average ticket cost was. Going to the 454 00:26:10,119 --> 00:26:14,520 Speaker 1: movies just two times for any person in the United 455 00:26:14,520 --> 00:26:16,640 Speaker 1: States would mean that Movie Best would be paying more 456 00:26:16,760 --> 00:26:19,600 Speaker 1: than what it was getting in subscription fees. Here in Atlanta, 457 00:26:20,040 --> 00:26:24,080 Speaker 1: going just once would mean that the full ticket price 458 00:26:24,200 --> 00:26:26,720 Speaker 1: was more than what you were paying in a subscription fee. 459 00:26:27,119 --> 00:26:30,600 Speaker 1: By this point, Movie Bass had established discount ticket rates 460 00:26:30,640 --> 00:26:34,160 Speaker 1: with some movie theater chains, but not all of them. 461 00:26:34,280 --> 00:26:36,240 Speaker 1: I bet you can guess the identity of one movie 462 00:26:36,280 --> 00:26:40,399 Speaker 1: theater chain that continued to refuse to have discount rates 463 00:26:40,400 --> 00:26:44,480 Speaker 1: with movie Pass If you can't guess, it's AMC. But 464 00:26:45,440 --> 00:26:49,840 Speaker 1: even so, even with discount ticket prices, even if they're 465 00:26:49,840 --> 00:26:53,800 Speaker 1: not paying full ticket cost, that's still a super low 466 00:26:53,800 --> 00:26:57,000 Speaker 1: subscription fee, and unsurprisingly people began to jump on board 467 00:26:57,320 --> 00:26:59,760 Speaker 1: because at that price, how could you not more than 468 00:26:59,800 --> 00:27:02,240 Speaker 1: a fift people would attempt to sign up to the 469 00:27:02,280 --> 00:27:07,119 Speaker 1: service in the forty eight hours following their announcement, and 470 00:27:07,160 --> 00:27:10,000 Speaker 1: that puts such a load on the company's servers that 471 00:27:10,240 --> 00:27:13,200 Speaker 1: they started to crash, and the app and the website 472 00:27:13,440 --> 00:27:17,879 Speaker 1: was unavailable quite a few times in that period. AMC's 473 00:27:17,920 --> 00:27:20,840 Speaker 1: reaction was negative, to say the least. The theater chain 474 00:27:20,920 --> 00:27:22,919 Speaker 1: said it was going to look into the possibility of 475 00:27:22,960 --> 00:27:27,240 Speaker 1: shutting out movie Pass from its chain entirely. In early 476 00:27:28,040 --> 00:27:32,200 Speaker 1: movie Pass would remove ten AMC theaters off its app 477 00:27:32,400 --> 00:27:36,440 Speaker 1: in various cities, and that appeared to be in response 478 00:27:36,480 --> 00:27:39,800 Speaker 1: to this problem of not getting those reduced ticket prices. 479 00:27:40,600 --> 00:27:44,080 Speaker 1: By the end of two thousand seventeen, movie Pass had 480 00:27:44,080 --> 00:27:49,600 Speaker 1: accumulated a million news subscribers. Usually you'd say that's a 481 00:27:49,600 --> 00:27:52,399 Speaker 1: good thing. The plan at this point was still to 482 00:27:52,440 --> 00:27:55,280 Speaker 1: make most of the revenue by selling data about customer 483 00:27:55,359 --> 00:27:59,679 Speaker 1: behaviors to various partners, and since of the users were 484 00:27:59,720 --> 00:28:05,080 Speaker 1: class to fight as millennials, young people who are presumably 485 00:28:05,119 --> 00:28:07,679 Speaker 1: going to potentially be a customer for a really long time, 486 00:28:08,400 --> 00:28:12,000 Speaker 1: it seemed like that would be particularly valuable information. In 487 00:28:12,040 --> 00:28:15,680 Speaker 1: two thousand eighteen, movie Pass announced a new division called 488 00:28:15,800 --> 00:28:19,600 Speaker 1: movie Pass Ventures, which would do film acquisition and distribution. 489 00:28:20,119 --> 00:28:23,119 Speaker 1: That led to some controversy later on. The first film 490 00:28:23,200 --> 00:28:26,760 Speaker 1: the division would acquire was called American Animals, and the 491 00:28:26,800 --> 00:28:31,440 Speaker 1: second was the film Gaudy Geo t t I with 492 00:28:31,640 --> 00:28:37,840 Speaker 1: John Travolta. It received the rare zero percent rating on 493 00:28:38,000 --> 00:28:43,280 Speaker 1: Rotten Tomatoes. Now, Rotten Tomatoes aggregates reviews from critics and 494 00:28:43,280 --> 00:28:47,600 Speaker 1: then assigns a rating based on that aggregation, so zero 495 00:28:47,680 --> 00:28:50,920 Speaker 1: percent doesn't automatically mean the movie is worse than say 496 00:28:51,320 --> 00:28:54,760 Speaker 1: a twenty film. It just means more critics gave it 497 00:28:54,800 --> 00:28:58,760 Speaker 1: a negative review. But the controversy came when the audience 498 00:28:58,760 --> 00:29:04,280 Speaker 1: score was much much higher than the critics score. Some 499 00:29:04,360 --> 00:29:08,720 Speaker 1: analysts suspected that there was manipulation at play, that maybe 500 00:29:09,120 --> 00:29:12,600 Speaker 1: Movie Pass customers were given an incentive to give a 501 00:29:12,680 --> 00:29:15,960 Speaker 1: good review to these films, and a few people pointed 502 00:29:16,000 --> 00:29:18,840 Speaker 1: out that some of the user reviews that were being 503 00:29:18,960 --> 00:29:22,960 Speaker 1: left on Rotten Tomatoes had only ever reviewed one other 504 00:29:23,040 --> 00:29:26,840 Speaker 1: film in their history, and that other film was American Animals, 505 00:29:26,960 --> 00:29:31,240 Speaker 1: the other movie Pass ventures picture, which does look a 506 00:29:31,280 --> 00:29:36,200 Speaker 1: little suspicious. In the spring of a movie Pass presentation 507 00:29:36,240 --> 00:29:40,400 Speaker 1: revealed that the app wasn't just using your location data 508 00:29:40,480 --> 00:29:42,720 Speaker 1: to make certain you were at the theater to buy 509 00:29:42,760 --> 00:29:44,960 Speaker 1: tickets when you said you were. It wasn't just an 510 00:29:44,960 --> 00:29:50,320 Speaker 1: activation methodology. It was also tracking you. It was including 511 00:29:50,320 --> 00:29:53,840 Speaker 1: information from before you arrive at the theater and after 512 00:29:53,920 --> 00:29:57,040 Speaker 1: you visited the theater, So, in other words, they were 513 00:29:57,080 --> 00:30:00,000 Speaker 1: watching where customers were going, where they were coming from, 514 00:30:00,000 --> 00:30:02,560 Speaker 1: where they were going to. Spikes had originally said that 515 00:30:02,720 --> 00:30:04,280 Speaker 1: they wouldn't be able to tell you what you had 516 00:30:04,320 --> 00:30:07,000 Speaker 1: for lunch, but based on this data, they might have 517 00:30:07,040 --> 00:30:10,520 Speaker 1: been able to give a pretty darn good guess, and 518 00:30:10,560 --> 00:30:12,600 Speaker 1: a lot of people argued that the company had not 519 00:30:12,760 --> 00:30:16,000 Speaker 1: clearly disclosed to people when they signed up to the 520 00:30:16,000 --> 00:30:20,440 Speaker 1: service that their location could be tracked. Subscription numbers dropped. 521 00:30:20,880 --> 00:30:23,800 Speaker 1: They dropped again a little bit later when movie passed, 522 00:30:24,080 --> 00:30:27,360 Speaker 1: in an effort to stop hemorrhaging so much money, remove 523 00:30:27,440 --> 00:30:30,320 Speaker 1: the ability to see a film a day on that 524 00:30:30,440 --> 00:30:36,240 Speaker 1: nine dollars per month plan. Instead, now people could see 525 00:30:36,320 --> 00:30:39,880 Speaker 1: up to four movies a month. And this initial change. 526 00:30:40,040 --> 00:30:42,520 Speaker 1: Part of this was because so many new people were 527 00:30:42,560 --> 00:30:45,440 Speaker 1: subscribing and going to the movies, so movie Pass was 528 00:30:45,520 --> 00:30:48,920 Speaker 1: losing more money more rapidly because they were so popular, 529 00:30:49,000 --> 00:30:52,480 Speaker 1: making it up in volume was not an option. In addition, 530 00:30:53,000 --> 00:30:56,720 Speaker 1: users would be prevented from buying tickets to select movies 531 00:30:57,200 --> 00:31:00,640 Speaker 1: more than once, so in other words, if you were 532 00:31:00,680 --> 00:31:03,200 Speaker 1: going to go see a really popular film, you were 533 00:31:03,240 --> 00:31:05,280 Speaker 1: limited to seeing that film just one time in the 534 00:31:05,320 --> 00:31:08,080 Speaker 1: movie theater during its run, rather than being able to 535 00:31:08,120 --> 00:31:11,280 Speaker 1: see it multiple times using your passes. That was one 536 00:31:11,320 --> 00:31:13,760 Speaker 1: way movie Pass was trying to limit the number of 537 00:31:13,760 --> 00:31:16,959 Speaker 1: times people were going to the theater. In April two eighteen, 538 00:31:17,320 --> 00:31:20,160 Speaker 1: it became clear that the parent company for movie Pass 539 00:31:20,440 --> 00:31:24,880 Speaker 1: had been losing twenty million dollars every month since September 540 00:31:25,000 --> 00:31:29,520 Speaker 1: of two thousand seventeen, and an auditor expressed concern that 541 00:31:29,560 --> 00:31:32,720 Speaker 1: Movie Pass would not be able to continue for very 542 00:31:32,800 --> 00:31:37,160 Speaker 1: much longer. The company would reintroduce the one ticket per 543 00:31:37,240 --> 00:31:40,400 Speaker 1: day plan a little bit later, because subscribers were still 544 00:31:40,480 --> 00:31:43,480 Speaker 1: dropping off dramatically, and now the company was saying, well, 545 00:31:43,800 --> 00:31:47,400 Speaker 1: it hurts us financially to have too many subscribers, but 546 00:31:47,480 --> 00:31:50,360 Speaker 1: then we won't have a company if everybody leaves the service. 547 00:31:51,040 --> 00:31:53,240 Speaker 1: But then, in order to balance out the fact that 548 00:31:53,280 --> 00:31:55,920 Speaker 1: now you could go see a movie a day again, 549 00:31:56,440 --> 00:31:59,800 Speaker 1: they introduced the concept of peak pricing, in which customers 550 00:32:00,680 --> 00:32:04,520 Speaker 1: discover they would face additional fees to see certain popular 551 00:32:04,640 --> 00:32:08,040 Speaker 1: movies at busier times of day. So if you had 552 00:32:08,120 --> 00:32:10,520 Speaker 1: no job and you could go to the movie theater 553 00:32:10,640 --> 00:32:13,280 Speaker 1: in the middle of a work day, you probably weren't 554 00:32:13,320 --> 00:32:15,680 Speaker 1: too bothered by this because you could just see the 555 00:32:15,680 --> 00:32:18,720 Speaker 1: film whenever you wanted to. But if you had normal 556 00:32:18,800 --> 00:32:21,880 Speaker 1: working hours, you were likely to run into peak pricing 557 00:32:21,920 --> 00:32:23,800 Speaker 1: because that happened to be the same time when you 558 00:32:23,800 --> 00:32:25,920 Speaker 1: would have availability to go see a movie in the 559 00:32:25,960 --> 00:32:31,320 Speaker 1: first place. Later, still, the company suffered a massive service outage, 560 00:32:31,960 --> 00:32:36,800 Speaker 1: and they had tomorrow five million dollars because they admitted 561 00:32:36,840 --> 00:32:39,080 Speaker 1: they did not have enough money to stay in operation. 562 00:32:39,280 --> 00:32:43,160 Speaker 1: Without taking out a five million dollar loan. It increased 563 00:32:43,800 --> 00:32:47,560 Speaker 1: the subscription fee of fourteen dollars cents per month. Keep 564 00:32:47,600 --> 00:32:50,040 Speaker 1: in mind, this is still a point where you would 565 00:32:50,040 --> 00:32:52,720 Speaker 1: agree to like a year long plan, so while it 566 00:32:52,760 --> 00:32:56,280 Speaker 1: would be broken out to fourteen dollars per month, you're 567 00:32:56,280 --> 00:33:00,280 Speaker 1: actually paying for a full years service, so they subscription 568 00:33:00,280 --> 00:33:03,320 Speaker 1: fee goes up to month. And it also limited the 569 00:33:03,440 --> 00:33:07,640 Speaker 1: number of times UH subscribers could watch new popular movies 570 00:33:07,800 --> 00:33:12,080 Speaker 1: and reduced which screenings you could go to, so for 571 00:33:12,240 --> 00:33:15,680 Speaker 1: brand new movies that were like tent pole films, you 572 00:33:15,720 --> 00:33:18,560 Speaker 1: would only be able to see it maybe once, and 573 00:33:18,640 --> 00:33:21,000 Speaker 1: you couldn't go see it at the most popular times. 574 00:33:21,600 --> 00:33:25,440 Speaker 1: In early August two eighteen, the stock price for movie 575 00:33:25,480 --> 00:33:29,960 Speaker 1: Passes parent company dropped fifty six percent and movie pass 576 00:33:30,040 --> 00:33:33,720 Speaker 1: would again remove the movie a day option for users, 577 00:33:34,080 --> 00:33:37,160 Speaker 1: going down to three films per month, so once again, 578 00:33:37,360 --> 00:33:39,280 Speaker 1: you can no longer go see a new movie every 579 00:33:39,320 --> 00:33:42,280 Speaker 1: single day. You can only see three a month. According 580 00:33:42,280 --> 00:33:45,760 Speaker 1: to Mitch Lowe, this was okay because the average person 581 00:33:45,840 --> 00:33:49,200 Speaker 1: would only go see three movies or fewer a month anyway, 582 00:33:49,240 --> 00:33:53,400 Speaker 1: so it wouldn't really impact most users, except it does 583 00:33:53,480 --> 00:33:57,560 Speaker 1: impact customer approval and the company did reduce the price 584 00:33:57,640 --> 00:34:01,160 Speaker 1: back down to nine dollars cents had been known for previously, 585 00:34:01,240 --> 00:34:05,240 Speaker 1: so at least that changed. It was no longer and 586 00:34:05,280 --> 00:34:07,800 Speaker 1: they said that they were going to nix the surge 587 00:34:07,960 --> 00:34:11,000 Speaker 1: pricing feature as well, but just a couple of weeks later, 588 00:34:11,440 --> 00:34:14,200 Speaker 1: in mid August, and yeah, we're getting real close to 589 00:34:14,239 --> 00:34:16,240 Speaker 1: when I'm recording this episode. But this is how quickly 590 00:34:16,239 --> 00:34:19,680 Speaker 1: things have been changing. Movie Pass would change yet again 591 00:34:20,440 --> 00:34:24,400 Speaker 1: mid August. Now users could only choose from between six 592 00:34:24,560 --> 00:34:29,319 Speaker 1: movies each day, with limited showtimes, so there was no 593 00:34:29,400 --> 00:34:31,960 Speaker 1: guarantee that the movie you wanted to see would even 594 00:34:32,040 --> 00:34:34,960 Speaker 1: be listed on the day you could go see it, 595 00:34:35,160 --> 00:34:38,000 Speaker 1: or it might be listed, but it might be only 596 00:34:38,120 --> 00:34:41,839 Speaker 1: available at an inconvenient time because of the movie Pass availability, 597 00:34:41,880 --> 00:34:44,279 Speaker 1: no matter how many times it might be showing at 598 00:34:44,320 --> 00:34:48,120 Speaker 1: the actual theaters near you. On August two thousand eighteen, 599 00:34:48,600 --> 00:34:52,120 Speaker 1: a board member of Helios and Matheson named Carl Schram 600 00:34:52,680 --> 00:34:55,920 Speaker 1: would resign, and as part of an open letter he 601 00:34:56,040 --> 00:34:59,960 Speaker 1: issued during his resignation, he alleged that movie Pass per 602 00:35:00,040 --> 00:35:05,160 Speaker 1: basfully withheld information and made critical decisions without informing the board, 603 00:35:05,239 --> 00:35:09,200 Speaker 1: let alone getting bored approval for them, and analytics company 604 00:35:09,239 --> 00:35:13,160 Speaker 1: called Sensor Tower Store Intelligence stated that the first time 605 00:35:13,239 --> 00:35:17,200 Speaker 1: downloads of movie Passes app have dropped by seventy six 606 00:35:17,280 --> 00:35:20,799 Speaker 1: percent over the past three months. I'm recording this at 607 00:35:20,800 --> 00:35:23,760 Speaker 1: the end of September two eighteen, uh in fact September 608 00:35:24,320 --> 00:35:29,799 Speaker 1: two eighteen, and that report published yesterday September. So as 609 00:35:29,800 --> 00:35:32,879 Speaker 1: I record this, there are tons of analysts who are 610 00:35:32,880 --> 00:35:36,200 Speaker 1: predicting the demise of movie Pass. Heck, by the time 611 00:35:36,239 --> 00:35:39,640 Speaker 1: this episode publishes one week after I have recorded it, 612 00:35:40,040 --> 00:35:43,600 Speaker 1: that company might not exist anymore. It's been losing money, 613 00:35:43,719 --> 00:35:46,880 Speaker 1: it's been losing subscribers. Who was playing a really dangerous 614 00:35:46,920 --> 00:35:49,759 Speaker 1: waiting game to try and get enough users and to 615 00:35:49,800 --> 00:35:52,400 Speaker 1: be seen as valuable in order to make a profit 616 00:35:52,440 --> 00:35:55,520 Speaker 1: from all the data it was gathering. But that was 617 00:35:55,560 --> 00:35:58,640 Speaker 1: a pretty expensive thing to wait out, and the controversies 618 00:35:58,680 --> 00:36:01,960 Speaker 1: have hurt the company's credibley with its user base. So 619 00:36:02,120 --> 00:36:07,280 Speaker 1: will movie Pass survive? That's possible, but with competing services 620 00:36:07,320 --> 00:36:09,719 Speaker 1: coming out, some of which are coming out from the 621 00:36:09,800 --> 00:36:13,160 Speaker 1: very movie chains that have been resisting movie Past this 622 00:36:13,160 --> 00:36:17,040 Speaker 1: whole time, and with flagging user confidence and approval in 623 00:36:17,120 --> 00:36:21,600 Speaker 1: the service itself, it's gonna be a long shot. Doesn't 624 00:36:21,600 --> 00:36:25,279 Speaker 1: mean it's impossible, but it's gonna be super challenging for 625 00:36:25,360 --> 00:36:28,680 Speaker 1: movie Pass to make it through UM and survive to 626 00:36:29,080 --> 00:36:31,879 Speaker 1: two thousand nineteen. I would not be surprised to see 627 00:36:31,920 --> 00:36:34,640 Speaker 1: it go away. UM. It would be kind of a shame. Like, 628 00:36:34,760 --> 00:36:38,239 Speaker 1: I still am not quite sure how the company could 629 00:36:38,320 --> 00:36:42,240 Speaker 1: make enough money, even with those additional streams of revenue, 630 00:36:42,680 --> 00:36:45,640 Speaker 1: to make it a truly profitable experience without it being 631 00:36:45,800 --> 00:36:52,800 Speaker 1: something launched by the actual theater chain itself. It's tough, UM, 632 00:36:52,880 --> 00:36:54,960 Speaker 1: and I don't know how I feel. Actually, I do 633 00:36:55,040 --> 00:36:58,280 Speaker 1: know how I feel about making money through selling data. 634 00:36:58,480 --> 00:37:02,399 Speaker 1: I feel schivy about it. It's a skive thing. It's 635 00:37:02,440 --> 00:37:04,839 Speaker 1: one thing to say, oh, well, here's a way you 636 00:37:04,880 --> 00:37:08,399 Speaker 1: can send Jonathan a message saying, oh, this new movie 637 00:37:08,480 --> 00:37:10,080 Speaker 1: is coming out, and you like this other movie that 638 00:37:10,160 --> 00:37:12,000 Speaker 1: was like it, so maybe you'll like this one too. 639 00:37:12,280 --> 00:37:15,759 Speaker 1: That I don't object to so much. But there's no 640 00:37:15,880 --> 00:37:19,080 Speaker 1: telling what sort of companies movie Pass might start selling 641 00:37:19,160 --> 00:37:22,440 Speaker 1: data to. It might be totally different companies that have 642 00:37:22,600 --> 00:37:27,759 Speaker 1: completely different business models, And I'm not terribly comfortable with that. 643 00:37:28,040 --> 00:37:30,680 Speaker 1: This happens all the time. You know, your information is 644 00:37:31,120 --> 00:37:36,520 Speaker 1: sold to tons of different actors out there, and by actors, 645 00:37:36,520 --> 00:37:39,000 Speaker 1: I mean agents, you know, companies, that sort of thing. 646 00:37:40,040 --> 00:37:43,319 Speaker 1: But I don't want to invite more of that necessarily 647 00:37:43,320 --> 00:37:46,720 Speaker 1: into my life. That's just me. It's my own personal 648 00:37:46,800 --> 00:37:55,319 Speaker 1: reflection text stuff. Listeners. We have some breaking news. Right 649 00:37:55,360 --> 00:37:58,120 Speaker 1: after I recorded this episode, some news broke that I 650 00:37:58,160 --> 00:38:00,759 Speaker 1: felt I had to include before we published. So I'm 651 00:38:00,800 --> 00:38:03,480 Speaker 1: recording this attendom the day before the show goes live. 652 00:38:04,280 --> 00:38:08,960 Speaker 1: I'm so sorry. Sorry, but anyway, some crazy stuff happened 653 00:38:09,400 --> 00:38:13,080 Speaker 1: that I think we need to address. Movie Past did 654 00:38:13,120 --> 00:38:18,320 Speaker 1: something I think is pretty insane. Several customers who had 655 00:38:18,360 --> 00:38:22,440 Speaker 1: canceled their subscriptions after the service had gone through multiple 656 00:38:22,520 --> 00:38:26,120 Speaker 1: changes in two thousand eighteen ended up receiving emails that 657 00:38:26,239 --> 00:38:29,600 Speaker 1: said they would have to quote unquote opt out of 658 00:38:29,760 --> 00:38:33,480 Speaker 1: enrollment into a new subscription service. The email said that 659 00:38:33,560 --> 00:38:37,200 Speaker 1: these lucky individuals and I am using air quotes for 660 00:38:37,280 --> 00:38:40,759 Speaker 1: that had been selected to be automatically enrolled in this 661 00:38:40,840 --> 00:38:44,680 Speaker 1: new service that would return to unlimited movies per month. 662 00:38:45,080 --> 00:38:49,520 Speaker 1: In reality, it would be unlimited movies within movie Pass inventory, 663 00:38:49,640 --> 00:38:52,640 Speaker 1: meaning you know movies that Movie Pass had access to. 664 00:38:53,160 --> 00:38:56,400 Speaker 1: That actually means that things like blockbusters on opening weekend 665 00:38:56,440 --> 00:39:00,320 Speaker 1: would be off limits, so not really unlimited movies, but anyway, 666 00:39:00,760 --> 00:39:03,680 Speaker 1: it meant that unless you went to the proper settings 667 00:39:03,680 --> 00:39:06,960 Speaker 1: in your account and you opted out of this service 668 00:39:07,000 --> 00:39:09,799 Speaker 1: that you did not ask to be in, you would 669 00:39:09,840 --> 00:39:13,719 Speaker 1: start getting charged by movie Pass for this service. So 670 00:39:13,840 --> 00:39:17,319 Speaker 1: imagine that you are upset at movie Pass because the 671 00:39:17,360 --> 00:39:19,680 Speaker 1: service changes have been going back and forth and it's 672 00:39:19,719 --> 00:39:22,120 Speaker 1: not the service that you originally signed up for, so 673 00:39:22,160 --> 00:39:24,760 Speaker 1: you decide it's not worth this hassle and you cancel 674 00:39:24,960 --> 00:39:29,279 Speaker 1: your subscription. And then, uh, as of like the end 675 00:39:29,280 --> 00:39:32,000 Speaker 1: of September, you get an email that says, surprise, your 676 00:39:32,040 --> 00:39:35,799 Speaker 1: service has been re enacted without your permission and that 677 00:39:35,880 --> 00:39:38,040 Speaker 1: if you don't do anything about it, you're going to 678 00:39:38,080 --> 00:39:40,600 Speaker 1: get charged for it. I think it's safe to say 679 00:39:40,640 --> 00:39:44,799 Speaker 1: this is banana. You should not have to deal with 680 00:39:44,840 --> 00:39:47,600 Speaker 1: that sort of thing. I think it's ridiculous for any 681 00:39:47,640 --> 00:39:51,680 Speaker 1: company to enroll a former customer into a new subscription 682 00:39:51,760 --> 00:39:55,080 Speaker 1: service without their permission and then say it's on you 683 00:39:55,200 --> 00:39:59,960 Speaker 1: to opt out of it. That to me is absolutely crazy. 684 00:40:00,120 --> 00:40:03,800 Speaker 1: It doesn't sound ethical to me. Now that's my personal opinion, 685 00:40:04,320 --> 00:40:06,640 Speaker 1: but I think it's a reasonable one. And then just 686 00:40:06,880 --> 00:40:09,640 Speaker 1: hours before I was to come into this studio to 687 00:40:09,760 --> 00:40:14,520 Speaker 1: record this update, more news broke the CEO of Helios 688 00:40:14,560 --> 00:40:19,759 Speaker 1: and Mathison Analytics, Ted Farnsworth. Helios and Mathison Analytics is, 689 00:40:19,760 --> 00:40:22,640 Speaker 1: of course, the parent company of movie Pass. Has said 690 00:40:22,719 --> 00:40:26,560 Speaker 1: that they raised sixty five million dollars in new funding 691 00:40:26,640 --> 00:40:31,279 Speaker 1: in September. But that being said, Helios and Mathison Analytics 692 00:40:31,280 --> 00:40:34,440 Speaker 1: is still having some major problems. As of this recording. 693 00:40:34,800 --> 00:40:38,680 Speaker 1: Their stock price for that company is at a single 694 00:40:38,880 --> 00:40:43,840 Speaker 1: penny per stock one cent stocks, and it is in 695 00:40:43,960 --> 00:40:47,719 Speaker 1: danger of being delisted from the Nasdaq Stock Exchange. On 696 00:40:47,760 --> 00:40:51,239 Speaker 1: October eighth, the company is going to hold a stockholder 697 00:40:51,320 --> 00:40:55,040 Speaker 1: meeting to discuss the possibility of a reverse stock split. 698 00:40:55,680 --> 00:40:57,520 Speaker 1: Now I've talked about stock splits in the past. To 699 00:40:57,560 --> 00:40:59,800 Speaker 1: stock split is when you take the number of stocks 700 00:41:00,040 --> 00:41:03,120 Speaker 1: and you increase that number, really the number of shares 701 00:41:03,160 --> 00:41:06,120 Speaker 1: in stock. You increase the number of shares, and then 702 00:41:06,160 --> 00:41:10,760 Speaker 1: you decrease the individual share price. That way, the company's 703 00:41:10,840 --> 00:41:14,680 Speaker 1: value is preserved as a whole, but you can increase 704 00:41:14,719 --> 00:41:17,319 Speaker 1: the number of shares. So you might typically hear of 705 00:41:17,360 --> 00:41:20,799 Speaker 1: a two for one stock split, which means that if 706 00:41:20,840 --> 00:41:23,399 Speaker 1: the company has a thousand stocks now it has two 707 00:41:23,440 --> 00:41:26,160 Speaker 1: thousand stocks, but there are two thousand stocks where each 708 00:41:26,200 --> 00:41:29,120 Speaker 1: share is worth half of what they used to be worth. 709 00:41:29,480 --> 00:41:33,680 Speaker 1: This helps improve liquidity and trading, but it doesn't change 710 00:41:33,680 --> 00:41:35,719 Speaker 1: the value of the company. This is going to be 711 00:41:35,800 --> 00:41:39,640 Speaker 1: a reverse stock split, so instead of a stock splitting, 712 00:41:40,160 --> 00:41:44,799 Speaker 1: it's shares the stocks merging together. So this would be 713 00:41:44,960 --> 00:41:50,200 Speaker 1: a five hundred shares of stock merging to form one share. 714 00:41:50,520 --> 00:41:53,880 Speaker 1: So for every five hundred shares now there would just 715 00:41:53,920 --> 00:41:58,040 Speaker 1: be one share that would be five hundred times the 716 00:41:58,120 --> 00:42:01,919 Speaker 1: price of the original yaars, so instead of all one 717 00:42:01,960 --> 00:42:08,200 Speaker 1: cent share, it would be five dollars essentially. Yikes. Anyway, 718 00:42:08,719 --> 00:42:12,160 Speaker 1: those are the breaking news points that I wanted to 719 00:42:12,200 --> 00:42:15,880 Speaker 1: include in this episode. Uh decided to add it on 720 00:42:16,040 --> 00:42:18,600 Speaker 1: here at the end, and I'm sure by the time 721 00:42:18,640 --> 00:42:21,800 Speaker 1: this publishes, they'll be yet more news about movie Pass. 722 00:42:21,920 --> 00:42:27,000 Speaker 1: Probably not good, but I only have so much time 723 00:42:27,480 --> 00:42:30,960 Speaker 1: and we have to publish at some point, so fingers crossed, 724 00:42:30,960 --> 00:42:35,200 Speaker 1: it won't be catastrophic huge news. I'm sure we will 725 00:42:35,200 --> 00:42:38,320 Speaker 1: be talking about movie Pass, perhaps in the past, tense 726 00:42:38,600 --> 00:42:42,160 Speaker 1: again in the future. All Right, Susannah, that was our 727 00:42:42,200 --> 00:42:45,640 Speaker 1: episode about movie Pass. If any of you out there 728 00:42:45,680 --> 00:42:48,600 Speaker 1: have suggestions for topics I should cover in future episodes 729 00:42:48,640 --> 00:42:51,200 Speaker 1: of tech Stuff, whether it's a technology, a person in tech, 730 00:42:51,239 --> 00:42:54,399 Speaker 1: a company, a concept, anything like that. Maybe there's someone 731 00:42:54,440 --> 00:42:56,480 Speaker 1: you want me to interview or have on as a guest, 732 00:42:57,040 --> 00:42:59,480 Speaker 1: let me know, send me an email. The address for 733 00:42:59,520 --> 00:43:03,440 Speaker 1: the show is text stuff at how stuff works dot 734 00:43:03,480 --> 00:43:06,040 Speaker 1: com or drop me a line on Facebook or Twitter. 735 00:43:06,120 --> 00:43:08,520 Speaker 1: They handle of both of those is tech Stuff hs W. 736 00:43:09,080 --> 00:43:11,560 Speaker 1: Remember you can go over to T public dot com 737 00:43:11,560 --> 00:43:15,080 Speaker 1: slash tech Stuff. That's T E E Public dot com 738 00:43:15,120 --> 00:43:17,839 Speaker 1: slash tech Stuff. That's where we have our merchandise store. 739 00:43:18,120 --> 00:43:21,279 Speaker 1: You can buy yourself something cool from the store, maybe 740 00:43:21,280 --> 00:43:26,240 Speaker 1: a T shirt or tote bag or stickers. Support the show. 741 00:43:26,400 --> 00:43:29,480 Speaker 1: Every purchase helps the show out a little bit. We 742 00:43:29,600 --> 00:43:33,080 Speaker 1: greatly appreciate it. And also don't forget follow us on 743 00:43:33,239 --> 00:43:43,160 Speaker 1: Instagram and I'll talk to you again really soon for 744 00:43:43,280 --> 00:43:45,600 Speaker 1: more on this and thousands of other topics. Because it 745 00:43:45,680 --> 00:43:56,680 Speaker 1: how stuff Works dot com.