Can MoviePass be the Netflix of theaters?

Consumers aren’t going to the movies as much lately. It’s been a terrible year for Hollywood and big movie theater chains.

It could be that the movies just aren’t as good. Or it could be that there’s too many quality TV shows competing for our attention and limited free time instead.

But one company is betting people will get off the couch, put their phones down and stop Netflixing (and chilling?) if the price is right.

MoviePass introduced a $9.95 a month subscription service in August that lets you see an unlimited number of new movies in theaters. And the company that is in the process of buying a majority stake in MoviePass has surged lately.

Shares of Helios and Matheson Analytics, a small tech investment firm, have soared nearly 550% this year. The company announced in August that it planned to acquire more than 50% of MoviePass and take it public by the end of next March.

Helios and Matheson is not for the faint of heart. It’s a relatively small and unprofitable company and the stock has alternatively surged and dropped in violent fashion during the past few months.

Nevertheless, it will be interesting to see what happens to MoviePass as a business.

The company has an impressive pedigree. Mitch Lowe, the CEO of MoviePass, is a co-founder of Netflix and former president of DVD rental kiosk service Redbox, which was bought by private equity firm Apollo Global Management last year.

“MoviePass was founded to make it easier for passionate moviegoers and casual fans to see films the way they’re meant to be seen — in the theater,” said Lowe in a press release about the Helios and Matheson investment.

He added that the new movie theater ticket subscription service could disrupt Hollywood “in the same way that Netflix and Redbox have done in years past.”

Still, it’s debatable whether price is the biggest thing keeping people away from the multiplexes. Hollywood has had a spotty track record lately telling stories that people want to see.

And there is no rhyme or reason sometimes as to what will succeed and what’s a dud.

Shares of AMC, Regal and other big movie theater chains tanked last week following the disappointing box office returns of “Blade Runner 2049.” But the theater owners got a boost after “It’ scared up record numbers for a horror movie.

Both movies are relics of the 1980s. “Blade Runner” is a sequel to the sci-fi cult classic from 1982 starting Harrison Ford. (He’s in the sequel too.) And “It’ is based on the Stephen King novel about a creepy clown that was published in 1986.

But “Blade Runner” tanked while “It” thrived.

It just goes to show that there’s only a limited number of must-see movies that people will venture out to the theaters for instead of waiting for it to show up on Netflix, Amazon or another on-demand streaming service.

Ironically enough, “It” may have benefited from the fact that the movie (unlike the original book) had the action with the kids take place in the 1980s as opposed to the 1950s. In that respect, “It” is similar in spirit to the Netflix megahit “Stranger Things.”

Still, this fall will be an interesting time for MoviePass to test how much demand there is for people to go to the theater.

There are several likely blockbusters on tap, including “Thor: Ragnarok,” “The Justice League,” Pixar’s new original, “Coco,” and, of course, “Star Wars: The Last Jedi.”

MoviePass could capitalize on the fact that moviegoers will likely want to see many of these movies as soon as they come out on a huge screen…and possibly more than once.

But for investors, a bet on MoviePass’ potential new owner seems risky in light of the stock’s big surge in the past few months.

Netflix — which will post its latest results after the closing bell Monday and is likely to report that it has nearly 110 million subscribers worldwide — may be the movie stock that has a better chance of enjoying a feelgood Hollywood ending.

Ho ho ho! UPS, FedEx soar on holiday shopping hopes

— Christmas has come early for the companies that help Santa deliver gifts during the holidays. Shares of UPS and FedEx are both trading at all-time highs.

It’s been a banner year for both shipping giants. UPS stock is up 20% this year. Apparently, the answer to “What can Brown do for you?” is: Deliver big returns. And FedEx has done even better. Its stock has surged nearly 30% so far in 2016.

Are the companies still good stocking stuffers for investors though? Momentum does seem to be on their side.

UPS CEO David Abney told Bloomberg on Monday that he was expecting a record shopping — and shipping — season. He said shipping volume could be up 14% from a year ago.

And the holiday gift buying bonanza already is off to a good start.

Cloud software company Adobe, which tracks sales on Cyber Monday — the Monday after Thanksgiving and Black Friday that has become an online shopping bonanza over the past few years — said online sales hit a new record of $3.45 billion this year.

That’s up more than 12% from a year ago. And consumers are increasingly using their phones to shop. Cyber Monday mobile sales hit nearly $1.1 billion, a 34% increase from Cyber Monday 2015 according to Adobe.

And it seems many consumers decided to buy online on Black Friday instead of braving the crowds at traditional retailers too. Online sales on Black Friday topped $3 billion for the first time, Adobe said. Mobile sales exceeded $1 billion that day as well.

The success of Amazon is clearly one factor driving strong online sales. It is great news for UPS and FedEx — even though there are concerns about Amazon trying to build a shipping network of its own with investments in drones and freight airlines.

But UPS and FedEx both have many other reasons for holiday cheer.

Amazon isn’t the only place where people are buying gifts online.

Brick-and-mortar retail giants Walmart, Target and Best Buy have all stepped up their investments in their digital operations — and it is paying off. These three retailers reported strong online and mobile sales growth in their most recent quarter.

So if this keeps up, UPS and FedEx will continue to benefit.

Heck, maybe we’ll soon get an IPO from Dasher, Dancer, Prancer, Vixen, Comet, Cupid, Donner and Blitzen. (Ticker symbol of SLGH?)

And don’t forget Rudolph too of course. He is the most famous reindeer of all.

End of an era: BlackBerry will stop making its own phones

— It’s the end of an era for BlackBerry. The company, famous for making cellphones with physical keyboards that were once so popular people nicknamed them Crackberries, has decided to stop making its own devices.

BlackBerry said on Wednesday that it will rely on partners to manufacture the phones, which will still have BlackBerry’s look and feel.

The company announced a joint venture with an Indonesian telecom company that will start making them. BlackBerry plans to turn its attention to software, a move it has made gradually in recent years as sales of its phones have slid.

Shares of BlackBerry rose in premarket trading after the announcement. But the stock price is well below its peak from several years ago.

BlackBerry was once the phone of choice for Wall Street traders, politicians and celebrities, thanks in part to its well-regarded security system. President Obama was spotted with a BlackBerry. So was Kim Kardashian West.

But the company was too late to the touchscreen game, and customers left in droves for Apple’s iPhone, Samsung’s Galaxy and other devices running on Google’s Android system. Even Microsoft has moved ahead of BlackBerry with its Windows Phones.

CEO John Chen has tried to turn the company around since joining in 2013. But even as he has pushed BlackBerry toward mobile and security software, apps and the plethora of connected devices known as the Internet of Things, BlackBerry has bled red ink, posted sharp sales declines and lost customers.

Chen has even done what was once unthinkable, opening the BlackBerry to other operating systems. The company now sells phones that run on Android. It also killed off its BlackBerry Classic line of phones this summer.

Oprah may not save Weight Watchers after all

— Is the Oprah Winfrey halo effect starting to dim for Weight Watchers?

Shares of the diet company more than quadrupled from mid-October through mid-November after Oprah announced she was buying a 10% stake in Weight Watchers, joining the company’s board and becoming a member of the service.

But the stock plunged more than 35% last week — shortly after Weight Watchers ads featuring Oprah began to air on national television.

Shares are still substantially higher than where they were pre-Oprah. And Oprah’s stake, which she acquired for $43.2 million, is currently worth about $100 million.

There is good reason to hope that the fortunes of Weight Watchers will turn around now that it’s one of Oprah’s favorite things.

Weight Watchers CEO Jim Chambers said back in November (when the company last reported earnings) that it did notice a big increase in the number of visitors to its web site thanks to Oprah.

But will these people actually become paying members?

That remains to be seen. It also seems that Oprah’s endorsement of Weight Watchers may not necessarily hurt its rivals.

Dawn Zier, president and CEO of Nutrisystem told CNN’s Stacey Delikat last week that Nutrisystem did not see any negative impact to its business after Oprah bought her Weight Watchers stake.

In other words, Oprah could help the entire weight loss industry — and not just Weight Watchers.

A bit of a social media backlash to one of the Oprah ads may not be helping either. In one of the commercials, Oprah says that “inside every overweight woman is a woman she knows she can be.”

That line had the opposite of its intended effect for some women. It was viewed as insulting and demeaning — not inspiring and empowering.

Weight Watchers was not immediately available for comment.

But regardless of whether or not you love the ads or hate them, it’s still not clear if Oprah will be able to make that meaningful of an impact on Weight Watchers.

“Her involvement can help but can it move the needle financially?” asked R.J. Hottovy, an analyst with Morningstar.

“The fact is this business has changed so much in the past few years due to calorie counting apps and fitness monitors. Weight Watchers is a proven program, but whether or not consumers are still willing to pay for it is the big question,” Hottovy added.

Hottovy has a fair value target of $14 for the stock — about 8% below its current price. He said this is going to be a transitional year for the stock.

Analysts are currently forecasting sales growth of less than 1% for Weight Watchers this year and profit growth of less than 3%.

Hottovy also said speculation about Oprah buying a bigger stake in the company should probably be ignored for now.

As part of the original agreement with Weight Watchers, Oprah does have the option to purchase an additional 5%. But some investors have been hoping she could acquire even more.

“Oprah’s involvement got everyone excited,” Hottovy said. “There were rumors that she could take an even bigger stake, but they seem to have faded. The market may have gotten ahead of itself.”

It’s also worth nothing that an unusually high number of investors are betting against Weight Watchers. That contributes heavily to the volatility in the stock.

Short sellers — who borrow a stock and immediately sell it with the hopes of buying it back at a higher price so they can profit from the difference — held more than half of the available Weight Watchers shares as of mid-December.

These investors often have to quickly buy back shares they borrowed when the stock is going higher in order to avoid big losses. That’s called a short squeeze.

But once a squeeze ends, many shorts start the process over — hoping that they’ll eventually be right about the stock tanking.

And it looks like short sellers in Weight Watchers are not being intimidated by the presence of Oprah.


™ & © 2016 Cable News Network, Inc., a Time Warner Company. All rights reserved.

‘Home’ run: Did Rihanna save DreamWorks Animation?

— The nightmare for DreamWorks Animation may be over. The beleaguered studio can thank Rihanna and Sheldon from “The Big Bang Theory” for the turnaround.

Shares of DreamWorks Animation surged as much as 8% Monday thanks to the surprise box office success of “Home” — which features the voices of Jim Parsons as an alien and “Umbrella” singer Rihanna as the little girl who befriends him.

“Home” grossed $54 million in the United States during its opening weekend and another $47.5 million overseas according to movie industry site Box Office Mojo.

DreamWorks needed “Home” to be a hit. The studio, run by legendary Hollywood mogul Jeffrey Katzenberg, has had huge hits but also some notable duds in the past few years.

Its inconsistency is in stark contrast to Disney’s Pixar unit, which has churned out one success after another, most recently “Frozen” and “Big Hero 6.”

The goal for DreamWorks now is to turn “Home” into a true franchise, joining Shrek, Madagascar, Kung Fu Panda and How To Train Your Dragon.

Don’t bet against RiRi and J. Lo. Although the movie didn’t get fantastic reviews, it seems like critics underestimated the appeal of cute aliens. (I saw “Home” with my son. It’s not “Toy Story.” But it was amusing and well-done.)

It’s also worth noting that so many animated movies have white protagonists. So having a black heroine was refreshing.

That — plus music from Rihanna and Jennifer Lopez (who was the voice of Rihanna’s mom) — also probably helped bring in a lot more young girls and their parents. (Steve Martin and the guy who played Badger in “Breaking Bad” are also in the movie. I kid you not.)

“Home” is the only theatrical release for DreamWorks this year. The studio announced in January that it was cutting the number of movies from three a year to two starting in 2016. It also laid off 500 employees, or nearly 20% of its staff.

Those cost cutting moves were done in response to a series of critical and commercial flops — such as “Turbo,” “Rise of the Guardians” and” Mr. Peabody and Sherman.”

DreamWorks has lost money in three of its last four quarters and the stock fell more than 35% last year as a result.

Takeover talks dead for now. Things had gotten so tough that DreamWorks was even a rumored takeover target. There were reports that both Japanese tech giant SoftBank and toy maker Hasbro were thinking of buying the studio. But talks apparently fell apart on both deals.

There also has been speculation from time to time that Fox could be a natural acquirer of DreamWorks. Rupert Murdoch’s media firm has a 5-year deal to distribute DreamWorks Animation movies that runs out in 2018.

So what’s next? DreamWorks doesn’t have another movie in theaters until “Kung Fu Panda 3” a year from now. Even though the last movie came out in 2011, it seems like the third film is a safe bet. The first two grossed a combined $1.3 billion worldwide.

Small screen success is key. Po continues to fight bad guys and eat dumplings on a show called “Kung Fu Panda: Legends of Awesomeness” that airs on Viacom’s Nickelodeon.

Television actually could wind up being the medium that helps keep DreamWorks relevant. The studio has a deal to create new shows for Netflix. “All Hail King Julien” and “The Adventures of Puss in Boots” are two that debuted in the past few months. They are based on characters from the Madagascar and Shrek movies, respectively.

DreamWorks Animation has also done a good job so far with the purchase of YouTube video network AwesomenessTV. DreamWorks bought it for $33 million in 2013 and just sold a 25% stake in it this year to Hearst … for $81.25 million.

But the formula is pretty simple for DreamWorks:. If it can create more hits, then it should be able to return to profitabilityand no longer be named in takeover rumors.


™ & © 2015 Cable News Network, Inc., a Time Warner Company. All rights reserved.