MoviePass might end up being spun off into another company, and the wheels are already in motion.
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MoviePass has made headlines recently for its struggling attempts to stay in the black, but company owners Helios and Matheson Analytics have created a new company called MoviePass Entertainment Holdings in what appears to be the first steps in a new plan (via THR).
MoviePass Entertainment Holdings will house MoviePass shares and the company’s film assets, and though it will be public the company will retain enough shares to keep their controlling presence. This seems to generally be a way to keep any fluctuations in MoviePass (of which there have been many) from further hurting the parent company, though how this helps (if it does at all) MoviePass itself and their business model remains to be seen.
MoviePass has struggled to find a middle ground between giving away the farm and losing money or pulling the reins too tight to take away the value of the service. When initially introduced the fee for the service was higher, becoming around $50 until they lowered the price to the much-publicized $9.99 a month. When that happened the service blew up, eventually hitting around 3 million subscribers.
While that’s a great number, it also meant that all the sudden the company was losing substantial money since MoviePass pays around full price for each ticket. Since users could go see as many movies as they wanted per month (1 per day) that mean the company was paying quite a bit for each customer, and that $9.99 wasn’t enough to stem the tide. That’s when MoviePass started playing with the price point and formula, irritating customers and causing many to leave the service.
CEO Mitch Lowe apologized to users in a letter, especially in regards to the constantly changing plan and at one point complete outage of services due to running out of money.
“First and foremost, I want to personally apologize to each of you for the inconsistencies and unreliability of our service over the past few days. Additionally, I regret our lack of proactive communication with you during this time; we are working hard to improve the communications to our community moving forward,” Mitch Lowe’s letter read. “Over the last several days, we’ve begun making changes to our service that will help us continue to offer our members a high-value, low-cost, in-theater movie experience.”
We’ll have to wait and see if 2019 will be a better year for MoviePass.
