A Blockbuster Week For This Hollywood Stock
Dear Rundown Reader,
While trade wars and the Fox buyout narratives dominate the headlines, an intriguing story is slipping under the radar.
And it tells something important about the economy.
Maybe you’ve already noticed… Maybe not.
If not, you should know, we’re quickly moving to a full-blown subscription based economy.
Netflix, Spotify, Airbnb, leasing your smartphone, leasing your vehicle, renting power tools…
This is only the beginning
Today’s Rundown examines the latest player joining the subscription economy. Including why it’s awesome for consumers and shareholders alike.
Your Rundown for Thursday, June 21, 2018…
See You Later MoviePass — AMC Is Making Moves
A while back, we talked about the most successful, unsuccessful business we’ve ever seen.
Over 2 million Americans use their service as of March this year, according Statista.
But for as many subscribers as MoviePass has, they can’t make a cent in profit.
Folks are wondering how the company will survive.
Their cash burn is a major problem and it’s now a struggle to keep the lights on.
Most experts suggest all MoviePass has to do to right the ship is charge more for the service.
So have they?
It appears MoviePass executives forget they’re in the business of making money.
And now things just got worse.
AMC Entertainment Holdings (NYSE: AMC) is entering the subscription based movie service space.
For $19.95 you can now see up to three movies a week, at any U.S. AMC Theater, as reported by The Wall Street Journal.
At the going rate of $15-$20 per show, you can see why this is still a great deal.
Wall Street seems to agree too. The stock is up 7% for the week on the news.
AMC’s model makes sense. It should make money, and appears to be the perfect middle road for shareholders and consumers.
Of course MoviePass’ $6.95 per month service is still the best.
But you have to wonder if MoviePass will be around much longer if they don’t raise prices.
Meanwhile it looks like AMC has found itself a true summer blockbuster with its new business model.
Now, turning to the markets this morning…
Market Rundown for Thurs., June 21
Yield on the 10-Year Treasury sits at 2.919% this morning, down 0.009.
S&P 500 futures are down 3.25 at 2,768.
Oil’s down $0.93 to $64.78.
Gold’s down $9.20 at $1,265.
Bitcoin goes for $6,730 this morning, according to CoinDesk.
We’ll talk again on Friday.
For the Rundown,