This page is a collection of video interviews with Ted Farnsworth CEO of HMNY and Mitch Lowe CEO of MoviePass – with quick summaries. I will use these as a reference from time to time on my blog, I will update the page as new interviews come out. I have studied and watched these interviews multiple times. The story stays very consistent. There is a good deal of details and nuances if you pay close attention to each video. After reviewing all the videos the key takeaways are:
- They have consistently said it will take time and investment to get to profitability – 5 Million subs, and always stick to next year or about a year from now, is when the model really starts to work.
- They are very clear that the early subscribers tend to be the heavier users, they stress that the low price is what brings in the casual users, Mitch references the Netflix experience and how when they lower price it made them more money
- They consistently speak on disrupting the ecosystem of content, and making the overall ecosystem more healthy for small independent films
- The model clearly calls for only breaking even on sub revenue against movie tickets, and making profit from other revenue streams. This is why they need scale.
Cheddar 5-26-2017 Farnsworth (Only) (This interview is prior to MoviePass. Farnsworth discusses the merger of Zone with Helios & Matheson and strategy behind that. Interestingly, HMNY was not a Farnsworth company originally, Farnsworth created Zones, and found HMNY to merge with, and then raised “a bunch of money” for the company. This video shows how Farnsworth is a decent fund raiser and huckster for just about anything where he thinks he can make some money with.)
Fox News 8-16-2017 Low and Farnsworth (Introduction of new 9.95 deal. How does it work? Lowe – price for going to movies has doubled, price of Netflix and other services has gone down. Movie attendance is going down single digits. AMC is suing you? Farnsworth – AMC is not suing us. But this ruins your their biz model. Farnsworth – no this is the opposite. Isn’t going to the movies dead? No lots of people want to see movies on the big screen. Lowe – not the ecosystem is healthier when viewed on big screen. Farnsworth, you can’t take away from the big screen. 75% of MP customers is millennials. How do you get people to do this? Make a great offer. You lose money – no we don’t. Lowe explains that majority go less than 3 times a year.
Bloomberg 10-31-2017 Lowe (Only) on (Broken distribution system, says they need to prove the model for 6 months to win the big chains, refutes AMC claims, talks about Blockbuster and Redbox, says they need about 6 months to prove the model, says it can take 2 years of negative gross margins and says they are prepared to do it.
CNBC 2-16-2018 – Lowe (Only) Seems to good to be true. When will you be profitable? We think next year sometime. Like Facebook – it’s essentially free to use it, we want to build a sizable subscriber base. We are on the way to 5 Million subscribers – at that point, we are well on our way to profitability… Who are your customers? Lowe – millennials who love subscription model. Explains the all you can eat buffet. That is the first group who shows up. The research shows the people who really want to go are the lower consumption users who want to see the independent films.
Big Speak – Bloomber 3-7-2018 Lowe (Only) ( Blockchain what does it do for MP? 3 things. Tracking film, content and distributing beyond theaters. MP is really Netflix for theaters. Prices have doubled in last 15 years. MP liberates going to the movies. Blockchain is a consumer product you use all the time. Cryptocurrency can be used. We can reward with crypto for reviews. Is your business more valuable today than it was yesterday? The public does not understand that we are on the verge of disrupting not only the whole way you go to the movies, but the whole distribution of content. Slowly but surely investors and the public are starting to understand that. This year will start to see some interesting uses of blockchain. How big is the business? We are buying 1 in every 35 movie tickets. That happened in 4.5 months. In last 3 weeks we added 1/2 million subscribers. The growth rate is accelerating. You have found interesting way to list your stock as a “Reg A” business what does that do for your business? Lowe says you will have to ask somebody else about Reg A – I focus on creating value with the business. Does it give you the capital you need? Lowe Answers : it is ONE of the ways to raise money in this environment.
Screen Junkies 3-18-2018 Lowe (Only) Long and wide-ranging interview – in depth on business model. Explains too good to be true, history of why Lowe sees the subscription model. 11% vs 88%. Explains all the tests, how can we get them to spend more, but not go all the time. Explains rationale of $9.95. Explains model as “paying for content”. Talks about startup is about idea technology and it costs a lot of money, losing 10’s of millions month after month. Talks about Netflix wanting to kill theatrical exhibition. Says the model is counter-intuitive. 89% only watch 4.5 films a year, they double to 9 films a year. Ticket a little less than $9. Heavey users bring total to 1.2 movies a month, this makes them 1-2$ under water. The movies that their subs go to are the smaller firms, where studios will pay to get them to go. Explains $6 a month. Not everyone overeats – only a small group overeats. Netflix – they made more money when they lowered the price, because they got more casual users. “Believe me, we know how to make this model work” Makes Redbox and Netflix examples and comparisons. Talks about the overall plan for the service. Plan with content is independent films, partner with great film distributors, we don’t know that business, we will buy a couple films a year, we will promote them. We want to bring filmmakers closer to our subscriber base. It is more to support. One of our shareholders owns Fandor. We did a Costco bundle with Fandor, we don’t have an ongoing relationship with them, and we are not doing streaming. How big is data mining in your strategy? It is big, and we will use it to promote movies. Netflix does the same with their data. We want to work on behalf of the studio to find customers for them. Talks about targeting and reducing marketing costs. Are studios working with you. Yes dozens. We drive 6% of movie tickets per week. When we drive movies it doubles to 12%. We prove our value to the studios when doing this. How long will it take to broaden out and get general audiences? A: it will take a year. much more here – very good and deep interview.
Yahoo Finance 4-9-2018 Lowe and Farnsworth (Moviefone discussion – Iconic Brand marketing tool, more acquisitions coming, Farnsworth, lots of assets out there, you will be seeing a lot more assets newer and older tech. Black Panther – big movie success of the year. Mitch talks about MP for small films. Signing a contract every single week with new exhibitor partners. Talks about MP subs going more often. Data question – is the data still valuable, Farnsworth says data is still valuable. We don’t track people, data privacy we take seriously. We have learned to use the correct words as leaders, we need to be more transparent. We need to have transparency creating vignettes. Farnsworth, we don’t allow data to go out, we don’t sell the data out, it never leaves our possession. Streaming – Lowe – if we build to 20 Million subscribers we have a lot of opportunities, streaming or other services. Disney Fox etc how do you compare, Farnsworth – we are niche. Stock – you are down a lot from the highs. Big spike was a short squeeze, we think it is really undervalued. People betting against you. We just keep going forward. 88% of our customers are profitable, we don’t want to get rid of them. Its a cost of advertising – look it is only going up. (yes he is talking about the stock price here)
5-2-2018 CNBC Lowe (only) (Announcing return of unlimited plan. Is it sustainable. Lowe explains again – fly over states helps get price down. After a while, you watch less movies. We are after the occasional moviegoer, getting them to go from 4.5 to 10. Who are your customers? Young urban, but we are expanding to fly over states. AMC says no way we won’t partner, do you see a shift? Yes, cinemancon – every single one of 7000 screens but one – said send me a contract. Do you think this will weigh on Netflix – no – we are making the ecosystem stronger all the way through to streaming. Watching on a phone is less than going to a thearer. 30% reduction of costs with new controls to MP helping us move toward better cost control and profitability.