MoviePass Head Teases Ways It Will “Flip Hollywood On Its Ear Again” After Shareholders Back Revival Plan

Ted Farnsworth, head of MoviePass parent Helios & Matheson, teased the rollout of a Rotten Tomatoes-like ratings service and other “disruptions” over the next 90 days during a conference keynote this morning in New York.

“You’re going to see a lot of disruption from us in the next 90 days that’s going to flip Hollywood on its ear again,” Farnsworth said during the session kicking off the Media & Entertainment Services Alliance event. He briefly alluded to the ratings guide during the session, but declined to offer specifics on the other “disruptions” in a brief follow-up interview with Deadline.

The title of Farnsworth’s session may have struck some investors as curious: “Disruption in the Movie Business: Monetizing the MoviePass Effect.” Monetization is much on the minds of shareholders these days as the company piles up losses and has warned of needing to raise up to $1.2 billion in new financing in order to survive. At a special meeting yesterday, shareholders voted to approve two measures aimed at staving off a potential de-listing by the Nasdaq as Helios & Matheson stock hovers below a dime a share. Last fall it reached $38 a share amid euphoric optimism over the $10-a-month service.

Asked by one conference attendee about when the company expects to break even, Farnsworth said it could do so with revenue between $150 million and $180 million from now to year-end. (Revenue last quarter was $58.5 million.) While the company recently disclosed losing $45 million in June alone, it blamed the intensity of summer moviegoing.

Customer data — the ultimate coinage MoviePass aims to transact with — got a lot of attention during the keynote session, but it has not yet meaningfully benefited the balance sheet. “It’s a challenge to put a value on it right now,” Farnsworth conceded, though he predicted more of the company’s revenue in the third and fourth quarters will be derived from non-subscription sources. Eighteen different distributors have contracted with MoviePass to use its data in making production and marketing decisions, he said. “The studios have embraced us because we have the data. They are getting that data and they are seeing how to better feed the audience.”

Farnsworth, in a session mostly devoted to audience questions rather than a presentation, said the company’s coming milestone in terms of membership will reverse the widely held skepticism about the company. When it hits its expected target of 5 million subscribers by year-end (it hit 3 million in late spring), “that’s when people are really going to wake up,” he said. “We’ll be controlling a lot of the movies, over 50% of the box office. That’s big-sized studios as well.” As to the shots across the bow that land daily from AMC and major studios, Farnsworth shrugged, “To be honest with you, if I were in their position, I’d have a full-out war against us, too, because somebody is threatening my every day business.”

Shares in MoviePass parent Helios & Matheson Analytics, already under immense pressure in recent weeks, hit a new 52-week low yesterday, touching 8.2 cents a share before closing at 9.78 cents. They are largely unchanged so far today.

At a special meeting held at the company’s WeWork offices in the New York’s Empire State Building, shareholders backed management dramatically boosting the number of outstanding shares to 5 billion from about 500 million. The new shares would offer more flexibility to the company as it shores up investment support.

The other measure receiving a green light from shareholders was a reverse stock split, which management could set at anywhere from 1-to-2 to 1-to-250. A reverse split is commonly used to prop up a faltering share price.

Helios disclosed in June that it had been warned by the Nasdaq that extended periods of trading below $1 would result in the company being de-listed, which would be a serious blow to its ambitions.

Asked by Deadline for his view of the shareholder meeting, Farnsworth said it “gave us what we need” in terms of securing a publicly traded future. “It all went very well.”