MoviePass, the subscription service that provided movie lovers with unlimited access to films at the movie theaters for a flat rate, has filed for Chapter 7 bankruptcy.
Parent company Helios and Matheson Analytics Inc. will dissolve all assets, including shutting down operations at MoviePass.
The ticket subscription service began to show signs of trouble back in September 2019 when all remaining board members resigned from the company. MoviePass released the following statement:
“Over the past several months, MoviePass worked hard to relaunch its groundbreaking subscription service and recapitalize the company. While we were able to relaunch the service for some of our subscribers with an improved technology platform, our efforts to recapitalize the company have not been successful to date. As a result, it pains us to inform you that effective at 8 a.m. E.T. on September 14, 2019, we must interrupt service for all current MoviePass subscribers.”
MoviePass entered the market with high aspirations to disrupt the movie industry the way streaming service Netflix has done with its monthly flat rate subscription service.
But, issues with developing a workable plan that would both suffice the exhibitors and the customer became a difficult challenge to navigate.
Starting at $50 a month, customers were able to see unlimited amounts of movies. But the high price and uninspiring marketing plan failed to attract enough customers to be sustainable.
So, MoviePass lowered the prices to $10 but this proved to be a problem, as well. Theater chains began to complain about the business model saying that it was reducing their bottomline.
MoviePass executives assumed they would be able to create revenue by incorporating business models similar to those used in the tech industry, by selling user data like FaceBook or auctioning off ad space like YouTube, but those plans were never fully executed.
Some attribute the missteps to MoviePass not having the support of the major movie studios or theater chains.
The interruption of service in September caused the company to have to refund all its current customers.
“AMC “MoviePass™ will be providing subscribers with appropriate refunds for their period of service already paid for. Subscribers will not need to request a refund or contact MoviePass customer service to receive a refund. Subscribers will not be charged during the service interruption. At this point, we are unable to predict if or when the MoviePass™ service will continue.”
Once a very profitable stock, Helios & Matheson Analytics Inc. now has a stock of zero.
