MoviePass stumbles anew after restating subscriber revenue
By John J. Edwards III
MoviePass’s parent company hit another bump Tuesday, acknowledging it lost track of how many paying customers the film-subscription service had on its books.
Helios & Matheson Analytics Inc. said in a filing that it incorrectly recognized about $5.9 million in revenue from subscriptions that had been suspended. A further error totaling $700,000 came from recognition of revenue from subscriptions through Costco Wholesale Corp. that had been terminated through refunds.
There was a noncash error, too, related to accounting for derivatives. The changes to third-quarter results led to an $8.9 million widening of the company’s net loss for the period, to $138.5 million.
The company said it continued to have a material weakness in its internal financial controls for subscription management through Dec. 31, but implemented new accounting software on New Year’s Day.
MoviePass gained popularity with filmgoers by offering a $9.95-a-month subscription that let fans go to the movies every day. The company retooled that model several times as its losses ballooned.
Customers grew frustrated and cinema chains began offering their own subscription plans, sending Helios & Matheson shares into a decline that resulted in their delisting from the Nasdaq. The stock was quoted at 1.2 cents on Tuesday in over-the-counter trading.