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Helios And Matheson Called The Wrong Data Play

Reel Cash > Media > Helios And Matheson Called The Wrong Data Play
28 commentsAbout: Helios and Matheson Analytics, Inc. (HMNY)
Jeffrey Carr
Growth, research analyst, tech, media

Summary

  • HMNY relied on income from a subscriber data play to offset losses on ticket sales.
  • MoviePass has enough subscribers to make that model work.
  • Unfortunately, the company picked the wrong data to monetize.
  • Neither HMNY nor H&M (India) have a deep bench in data analytics.

“It’s about the data.”

That’s what Helios & Matheson (NASDAQ:HMNY) CEO Ted Farnsworth told MarketWatch in an interview from Jan. 2, 2018. Unfortunately, the data that Farnsworth was talking about was more akin to digital surveillance than pseudonymised and aggregated subscriber data, but that wasn’t the worst of it. CEO Mitch Lowe provided the details at the Entertainment Finance Forum on March 3, 2018:

We get an enormous amount of information. Since we mail you the card, we know your home address, of course, we know the makeup of that household, the kids, the age groups, the income. It’s all based on where you live. It’s not that we ask that. You can extrapolate that. Then because you are being tracked in your GPS by the phone, our patent basically turns on and off our payment system by hooking that card to the device ID on your phone, so we watch how you drive from home to the movies. We watch where you go afterwards, and so we know the movies you watch. We know all about you. We don’t sell that data. What we do is we use that data to market film.

Lowe’s data strategy had three critical mistakes. One was that they didn’t anticipate or even recognize the “creepiness” factor in that level of surveillance. Within days after Lowe’s speech, the company fielded a barrage of criticism from privacy advocates. The company’s privacy policy failed to disclose the multiple points of data collection, instead disclosing only a “single request” at the time of booking a theater. Shortly thereafter, in response to the outcry, the company dropped location tracking from their mobile app.

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