ON THE BELIEVE THIS IS NOT GOING
AGO WHEN THEY DEBUTED.
THEY'VE GOT A BUMPY RIDE ALONG
THE WAY AND THIS LATEST FIX
WHERE THEY GO FROM OFFERING YOU
30 MOVIES OVER THE COURSE OF A
MONTH FOR A SET PRICE TO MAYBE
THREE MOVIES AND DISCOUNTED
MOVIES AFTER THAT FOR A SIMILAR
PRICE TO DO THE TRICK.
KEEP THOSE WHO ARE TRYING TO GO
AFTER THEM AT BAY.
HERE TO TELL US ALL ABOUT IT,
TED FARNSWORTH, THE PARENT
COMPANY IN MOVIE PASS CEO, MITCH
LOWE.
WELCOME TO BOTH OF YOU.
LET ME BEGIN WITH YOU.
THIS NEW DEAL IS WHAT?
YOU MAKE THE NEW DEAL IS THREE
MOVIES A MONTH.
YOU CAN IMAGINE HERE IN NEW YORK
THAT COST YOU $45 TO DO THAT AND
TO MORE MOVIES AT A DISCOUNTED
PRICE COME AS MUCH AS FIVE OFF
THE NORMAL PRICE.
WHAT IT REALLY DOES AT $9.95
APPEALS TO THE PEOPLE WHO HAVE
BEEN ABANDONING THE MOVIE
THEATER.
THE PERFECT PROXY FOR THAT IS A
YEAR AGO IN 2017 HE WAS THE
WORST YEAR IN 25 YEARS IN THE
BOX OFFICE.
FIRST TIME IN YEARS THAT THE BOX
OFFICE IS OUT.
BELIEVE ME, THERE'S NOT THAT
MANY BETTER MOVIES THIS YEAR.
AFTER, THAT WAS TOO MUCH?
>> A SICKLY WE'VE REALLY WENT
WITH MITCH'S BACKGROUND WITH
NETFLIX AND RED SOX, OUR
STRATEGY WAS GO FOR THE GROWTH,
GET WAY AHEAD OF ANY
CONSTITUTION OF OVER 3 MILLION
SUBSCRIBERS OUT THERE.
BUSINESS MODEL WAS TOTALLY
SUSTAINABLE, BUT WE KNEW WE'D
HAVE TO ADJUST LATER ON DOWN THE
ROAD AND HAVE ANCILLARY REVENUES
LIKE MAKING AROUND MOVIES,
LIKELY BY THE STUDIO AS
CALIFORNIA, THINGS LIKE THAT TO
COME ALONGSIDE A MOVIE PASS AS
WE PUSH PEOPLE IN THE OTHER
THROUGH STREAMING IN OTHER WAYS.
WE'LL 92% OF THE COMPANY RIGHT
NETFLIX WE ARE WELL ON OUR WAY.
>> SO MANY HAVE COME TO PLAY IN
THE SANDBOX.
YOU KNOW, YOU INVENTED THIS AND
OTHERS ARE TAKING AND RUNNING
WITH THIS.
>> THAT IS ABSOLUTELY THE BEST
PART.
I LOVE MOVIES AND I LOVE MOVIES
ON THE BIG SCREEN.
THE INDUSTRY WAS DYING FROM LACK
OF INNOVATION.
AND SO, WHILE ITS MORE
COMPETITION FOR US, IT IS REALLY
REENERGIZED THE WHOLE IDEA OF
GOING TO MOVIES, WHICH OVER HALF
OF OUR MEMBERS ARE MILLENNIAL
AND THOSE WERE THE PEOPLE WHO
HAVE BEEN ONLY STREAMING.
NEIL: BUT THOSE NUMBERS ARE
CONFUSED.
A YEAR AGO THEY HAD 30 MOVIES,
NOW THEY HAVE THREE MOVIES.
YOU THINK THOSE STILL ON FOR NOT
BY GETTING GOUGED?
>> IT'S REALLY TOUGH AS THEY
START UP WHEN YOU'RE TRYING TO
CHANGE THE INDUSTRY AND
REINVIGORATED.
YOU END UP HAVING TO MAKE
CHANGES HERE AND THERE.
GRANTED THESE ARE NOT JUST
CHANGES HERE THEY ARE FAIRLY
DRACONIAN.
>> RE: HAVE OVER A MILLION
SUBSCRIBERS WITHIN THE LAST
WEEK.
>> HOW MANY DO YOU HAVE NOW?
RELY SUBSCRIPTIONS WERE
CANCELED.
>> THEY MADE PEOPLE THINK LIKE
THEIR CANCELLATION HADN'T
JUST A VISUAL.
>> DID THEY ALSO SEE THEIR
SUBSCRIPTIONS CANCELED?
>> WHEN YOU HAD TO USE THE TOP
LOOKED LIKE YOU HAD TO DO IT
AGAIN, BUT THAT WAS JUST AN
ERROR.
>> I KNOW IN THE LATEST QUARTER
YOU HAVE ABOUT $126 MILLION
OPERATING LOSS FOR THEM TO
.7 MILLION A YEAR AGO AND
WHATEVER FIXES YOU'VE ARRANGED
HERE, STILL A LOT OF CASH AT THE
RATE OF 20 MILLION, MAYBE MORE
MONTH.
>> THE BURN RATE WITH WHICH YOU
OUT IN THREE MONTHS.
IT IS FOUND TO APPROXIMATELY
WEEKS WHERE WE STARTED A NEW
PLAN PUTTING IN PLACE BECAUSE
WALL STREET WANTED TO SEE US GET
TO A PROFITABILITY AND WE WERE
WELL ON OUR WAY.
OVER THE LAST THREE WEEKS OR
AVERAGE USER GOES TO POINTED
MOVIES.
YOU'RE ALREADY PROFITABLE NET
CASH.
NEIL: SO THAT IS LOOKING BETTER.
THE IDEA THAT YOU WILL RUN OUT
OF CASH.
>> THEY'VE BEEN SAYING THAT
SINCE A YEAR AGO WHEN WE WERE
HERE.
>> ARBOR NOW IT'S DOWN TO
APPROXIMATELY 12 BILLION A
MONTH.
SIX MONTHS.
WALL STREET WAS THE STORY.
WE GOT OVER 3 MILLION
SUBSCRIBERS.
NO ONE IS EVEN CLOSE TO US.
AND SEE IF THE ONE OUT THERE.
>> HOW THEY TALK TO YOU ABOUT
THIS?
>> I WILL TELL YOU WE HAVE OVER
2000 SCREENS AROUND THE COUNTRY
LIKE IN THE CITY LANDMARK.
>> AN INCREDIBLE CUSTOMER BASE.
CONTACTING US ALL THE TIME.
WE WON'T SAY BECAUSE THOSE DEALS
ARE ALL --
>> IN A WHISPER THE NAME?
>> WE'RE THE HOTTEST BRAND OUT
THERE TO THE LAST YEAR.
WE ARE HERE.
WE ARE NOT GOING TO RUN ON ANY
CASH OR ANYTHING LIKE THIS.
NEIL: TALK ABOUT INVESTORS.
NOBODY GETS HURT MORE BY
DELUSION THAT NICE.
YOU CAN UNDERSTAND THIS IS NOT
>> WEEK JUST IN THE VERY FIRST
DAY WE'VE HAD OVER A MILLION OF
OUR SUBSCRIBERS ALREADY SAY I
WANT THIS NEW PLAN.
THIS NEW PLAN IS A PROFITABLE
PLAN TO GET US TO CASH FLOW
POSITIVE.
WHEN THE MARKETS ARE AT TO
REALIZE THAT THE NEED FOR
CAPITAL IS DECLINING RAPIDLY,
PEOPLE WILL START --
NEIL: WHAT IS IN IT FOR THE COST
OF OURS?
THREE MOVIES A MONTH, $10.
>> WHAT YOU GET IS A SUPER LOW
PRICE.
A COUPLE CUPS OF COFFEE.
ANY MOVIE.
NEIL: HOW ABOUT A 3-D MOVIE?
NO 3-D MOVIES THAT WE ARE
LAUNCHING A PREMIUM PACKAGE OR
THIS FREES UP IN LIBERATE PEOPLE
TO DISCOVER NEW FILMS IN THE BOX
SOLOS AND THEY CAN GO SEE THE
GREAT SMALL FILMS MADE BY
INDEPENDENT FILMMAKERS.
IF YOU CAN SEE THREE MOVIES FOR
THE SAME PRICE AS ONE.
>> WILL TAKE THAT MODEL.
>> ABSOLUTELY.