MoviePass pronounced dead on Friday the 13th, with little hope for a sequel
On Friday the 13th, the corporate horror show that has been MoviePass appeared to reach its bloody finale.
Helios & Matheson Analytics Inc. HMNY, -10.00% , the corporate parent of the service that sought to give users unlimited entry to films at the theater as they wanted for a monthly subscription price, announced Friday afternoon that it would shutter the service as of Saturday. The company’s board is reviewing options, including selling the entire business or just MoviePass.
The service has been inactive since shutting down just ahead of the July 4 weekend, which Helios & Matheson said at the time was a pause to update the app and “recapitalize” the struggling movie-subscription business. In Friday’s announcement, though, the company said that “its efforts to recapitalize MoviePass have not been successful to date.”
“The Company is unable to predict if or when the MoviePass service will continue,” the two-paragraph statement reads. “The Company is continuing its efforts to seek financing to fund its operations. There can be no assurance that any such financing will be obtained or available on terms acceptable to the Committee.”
Helios & Matheson was a sleepy data-analytics company when it acquired MoviePass about two years ago. The service had just 20,000 subscribers at the time, but rapidly began amassing new users after Helios & Matheson amassed its large stake and slashed the MoviePass monthly fee to $9.95 from up to $50 a month, eventually crossing the 3 million mark.
Helios & Matheson stock multiplied by more than 10 as investors jumped in on the movie-subscription business, but the warnings of big losses from paying full price to theaters so people could see as many movies as they want every month for roughly the price of one ticket eventually came true. Helios & Matheson was recording cash deficits of more than $20 million a month, according to filings with the Securities and Exchange Commission.
For more: The spectacular rise and fall of MoviePass
The movie-theater companies, which had initially scoffed at the idea of MoviePass, instead became competitors. AMC Entertainment Holding Inc. AMC, +2.22% , for example, introduced a new tier to its loyalty program, AMC Stubs, that allows users to see up to 3 movies a week for $19.95 a month. On the anniversary of launching that service in June, AMC said that 860,000 people had signed up for the A-list service.
Helios & Matheson executives previously said that they knew the service would lose money, but expected to make it up by monetizing users’ data and selling advertising for movies and theater chains. That plan didn’t pay off, though, and the company’s stock has plunged even amid splits that sought to shore up the price. Shares, which sell for a fraction of a penny, fell 10% at the end of Friday’s session, as the news was announced, falling from 0.2 cents to 0.18 cents.
Previous coverage by MarketWatch staff writer Sarah Toy contributed to this article.
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