MoviePass has shown it can persuade its members to see movies they wouldn’t otherwise watch by offering them virtually free movie tickets. Unfortunately, now that it is investing in movies like Gotti, that means paying for those movies and for people to watch them.
Gotti is the second film that MoviePass Ventures, MoviePass’s film-financing arm, has invested in. It sunk at US theaters over the weekend, after being declared a critical flop by reviewers on Rotten Tomatoes. The movie brought in about $1.67 million in the roughly 500 theaters it was released, far below its estimated $10 million budget. MoviePass members may have accounted for as much as 40% of the box office, or $668,000, Deadline reported.
The mobster movie, starring John Travolta as the infamous New York crime boss John Gotti, faced hard odds entering the weekend. Gotti received positive reviews from exactly none of the 23 critics who were included on Rotten Tomatoes. Audiences, however, did seem to kind of enjoy it: 78% of the 6,900 users who submitted reviews to the site by Monday morning said they liked it, and it earned an average of four out of five stars from audiences.
MoviePass Ventures reportedly paid in the low seven figures for an equity stake in the film in April. It gets a cut of the film’s profits—if it ever makes any. MoviePass is not only on the hook for the cost of the tickets its members used to watch the flagging film, its subsidiary MoviePass Ventures, could lose its investment if the film doesn’t pick up steam. (Gotti reportedly did best in US markets including New York, Los Angeles, and Phoenix, where MoviePass could try to boost interest in the film.)
MoviePass does not publish how much it contributes to any given film’s ticket sales, but it estimated last week that it represented more than 5% of total US box office receipts. The company said it saw that share rise to more than 30% during weeks when it was actively advertising select films to its subscribers.
MoviePass offers members a movie ticket per day for a flat fee of $9.95 per month. It pays theaters the full price for each ticket its 3 million its members use. Earlier this year, it started investing in films through MoviePass Ventures, in the hopes that it could help movies succeed by promoting them to its users, and then share in the profits and other revenue opportunities, like the rights to distribute the film internationally, on home-video, or on streaming services.
MoviePass has been hemorrhaging cash from its financially dubious, yet fast-growing, subscription model and can’t really afford to lose money on its film businesses, too. (Parent company Helios and Matheson Analytics, which is trading at around $0.35 this morning, said in a May 8 filing that it had managed to reduce the average amount of cash MoviePass is burning each month by 35% during the first week of May.) It also launched a film production house, MoviePass Films, with the studio that made Gotti, Emmett Furla Oasis Films.
The critical and financial performance of Gotti was a departure from the first movie MoviePass took a stake in, American Animals, a heist film that it picked up with distributor The Orchard at the Sundance Film Festival. The movie got a decent reception on the festival circuit and solid reviews from critics. MoviePass promoted it heavily through the app and other communications. It premiered in four theaters in New York and Los Angeles in June, concentrating audiences at those venues, and bringing in a healthy haul of $135,000, or nearly, $34,000 per theater, before expanding to other cities.
Gotti, in turn, averaged about $3,320 per theater this weekend. The movie business is hard.