By Alex Heath
MoviePass CEO Mitch Lowe said Wednesday he expects the company to turn a profit in six to nine months, even though it's losing tens of millions of dollars a month and struggling to find a sustainable business model.
The company's recent changes to its MoviePass subscription, which limits customers to three movies a month for about $10, will "quickly" lower the company’s burn rate to zero and put it on the path toward profitability, Lowe said in an interview on Cheddar.
Most MoviePass subscribers — 85 percent, according to Lowe — see three movies or fewer a month, and 15 percent of MoviePass’s over 3 million subscribers have converted to the new plan introduced Monday.
“We know that three works,” Lowe said of the new restriction on the number of movies that subscribers can watch each month. “Three is our last change.”
The CEO and former Netflix executive rebuffed concerns that MoviePass could run out of money before the end of the year. The company took out a $6.2 million emergency loan to stay afloat two weeks ago, and said in a July SEC filing that it would seek to raise about $1.2 billion in equity and debt over the next three years.
“Our mission is survival and then success,” Lowe said.
MoviePass has received "many offers" from "very big media companies" that want to buy its business, according to Lowe. He declined to name any of the companies that have approached MoviePass about an acquisition. A college student-led venture capital firm called Triton Funds recently expressed interest in buying MoviePass, but it's unclear if those talks have progressed.
Shares of MoviePass's parent company Helios and Matheson have plunged roughly 99 percent in the last year as MoviePass losses continue to climb. The stock was trading at roughly $0.06 per share on Wednesday, despite the company's attempt to raise the price through a bold reverse stock split in late July.
For the full interview with MoviePass's CEO Mitch Lowe, click here.