Dead Company Walking
MoviePass had more than 3 million member at its peak. It offered cardholders "the chance to see one movie per day at the theater of their choice for just $9.95 a month". Great deal, horrible business model! As Time Magazine described in an insightful 2022 post-mortem:
Gaining subscribers (and posting spectacular revenue growth) isn't hard when you are giving away free money. It's not surprising that "by the first half of 2018, MoviePass members were buying 6.6% of all movie tickets in the U.S." However, MoviePass' business model was not sustainable – as was painfully obvious to any market observer at the time. Losses reportedly came out to about $30 per customer per month. The company even tried to limit their financial losses by invalidating their users' passwords when they bought too many tickets. In 2018, Helios and Matheson (HMNY) posted a $329M loss. The service closed down in September 2019 and then in 2020, parent company Helios and Matheson filed for Chapter 7 bankruptcy. During the liquidation process, nobody came forward to buy the MoviePass assets from the bankruptcy trustee (the name and trademarks were later acquired for a mere $140K). Needless to say, shareholders got no recovery whatsoever; their shares were worthless. It's a shame, especially since Helios and Matheson was a moderately profitable company before the disastrous MoviePass acquisition (it even turned a net profit in 2013).