MoviePass Shuts Down

The too-good-to-be-true subscription service MoviePass has shut down after an official two-year run and millions of users, The New York Times reported Friday, Sept. 13.

The subscription service offered customers various plans to see up to a movie a day in theaters for less than $10 a month, a business model that proved to be unsustainable. MoviePass’s parent, Helios + Matheson Analytics Inc., is exploring all options, including a business reorganization or a sale of the entire company.

The service was launched in 2011 but was largely unknown until 2017 when it was purchased by the publicly traded entity Helios + Matheson, and the monthly subscription fee dropped to $10 a month. After the acquisition of MoviePass, Helios + Matheson’s losses topped $256 million in 2018 and $150 million in 2017, up from over $7 million in 2016.

In an effort to stay afloat, MoviePass reduced the number of movies and restricted the titles that subscribers could see. Instead of success, the platform was hit by lawsuits and angry customers. The New York Attorney General’s office also launched its own investigation to see if investors were misled.

In March, MoviePass promised to “implement a new business model” and focus on a “new business strategy going forward.” One of its ideas was to create its own live content in order to enhance the service.

MoviePass subscribers were notified Friday that the service would end effective Saturday (Sept. 14) after efforts to make the platform profitable failed and investors gave up hope it could re-invent the model. Although MoviePass raised nearly $70 million in venture capital funds and had over 3 million subscribers, it was not enough to stem losses, the NYT reported.

Helios + Matheson currently owns approximately 92 percent of outstanding shares (excluding options and warrants) of MoviePass, the company said in a press release announcing the end of the subscription service. It also owns 100 percent of the outstanding membership interests in MoviePass Ventures LLC and 51 percent of outstanding membership interests in MoviePass Films LLC, and the Moviefone brand and service.