Farewell, MoviePass, we hardly knew ye. Back in September, it was announced that the short-lived movie ticket service was shutting down. The first few years of the service were quite rocky, though once it launched a lower price point that felt too good to be true, the service amassed nearly three million subscribers, ultimately crippling their financial model. After attempting to find the right balance of offering subscribers a valuable service while still managing to turn a profit, the task proved too difficult, and the service shut down on September 14th, 2019 with no future plans of ever being revived. As of today, Variety has reported that MoviePass’ parent company, Helios and Matheson Analytics, has filed for Chapter 7 bankruptcy protection.
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“Chapter 7 of the bankruptcy code dissolves an entity, whose assets are sold off to repay creditors (unlike Chapter 11 bankruptcy, in which a company seeks to renegotiate with creditors),” Variety writes. “In its bankruptcy filing, Helios and Matheson listed the estimated value of assets at between $1 million-$10 million and $60.9 million in total creditor claims.”
“With the bankruptcy filing, Helios and Matheson board members Prathap Singh, Gavriel Ralbag, Muralikrishna Gadiyaram and Joseph Fried resigned. In addition, interim CEO Parthasarathy Krishnan, interim CFO Robert Damon resigned,” Variety reports. “Helios and Matheson also owned Moviefone, which it bought from Verizon, and the company estimated the value of its trademarks at $4.38 million. As disclosed in its bankruptcy filing, Helios and Matheson was being investigated by the SEC, the FTC, and attorneys general for New York and California. The company also is the target of several pending shareholder lawsuits.”
“MoviePass’ cash-burning business model proved unsustainable,” Variety explains. “For full-year 2018, according to its most recent financial filing, Helios and Matheson’s reported net loss more than doubled — to $329.3 million — versus the year prior on revenue of $232.3 million.”
You can read the full article here.
While MoviePass is a thing of the past, the business model inspired theatre chains to have membership services of their own that provide similar deals. For example, AMC Theatres has the Stubs A-List program, which allows moviegoers to see up to three films a week. You can learn more about the program here.
