The moviegoing subscription service MoviePass has had a rough couple of weeks. On Thursday, July 26, Helios and Matheson, the parent company of MoviePass, announced that it had a service outage because it could not afford to pay for movie tickets. It then borrowed $5 million in cash on Friday to pay its merchant processors. After a tumultuous weekend, Forbes reported on August 1 that MoviePass will eliminate ticketing access to major Hollywood films in an unconventional attempt to keep the company from bankruptcy. Additionally, on August 6, MoviePass announced that it will limit customers to three movies per month, but that they have also decided to keep their membership fee at $9.95 per month instead of increasing it to $14.95 as they previously had said they would do.
When Mitch Lowe, CEO of MoviePass, took over the company in 2016, he introduced new tactics to boost MoviePass’ membership, including lowering the membership price to $9.95 per month from $50. MoviePass at its height had three million users, however, problems began to occur that hurt MoviePass’ reputation. For example, in a controversial statement, Lowe said, “We watch how you drive from home to the movies. We watch where you go afterwards,” adding, “We know all about you.” Additionally, changes in the number of movies one could see a day – from multiple movies to just one movie per day – and restrictions on re-watching movies made consumers angry. And with its most recent announcement, MoviePass has further decreased the number of movies customers can watch to three per month.
MoviePass also had a slew of financial problems that grew worse over time. While MoviePass charges consumers $9.95 per month for their standard membership fee, MoviePass will pay the studios directly for the movie ticket, which can range from $12 to $14. This cash drain became an insurmountable obstacle, especially after MoviePass’ plan to receive a percentage of movie theater concessions fell flat as well as the failure to cross-promote movies. Additionally, MoviePass’ subsidiary MoviePass Ventures did not perform well. MoviePass Ventures was founded to co-acquire films with film distributors, however, its two acquisitions of movies American Animals and Gotti earned lackluster performance review (Gotti even scoring the only “zero” on Rotten Tomatoes). Additionally, customer service for MoviePass was also a point of contention.
While MoviePass continued to make critical mistakes, competition in the movie subscription field has been increasing. AMC and Cinemark are working on their own subscription plans, lead rival Sinemia has enjoyed steady growth and Atom Tickets announced its “Break Up With MoviePass” sweepstakes offering MoviePass customers the chance to win a year’s worth of free Atom tickets if they canceled their MoviePass account.
In a last-minute PR attempt to regain customer trust, CEO Lowe published a statement on July 31 called “Letter to the Community.” The letter first apologized for the inconsistencies that MoviePass had been facing and then announced new changes that the company will be making like limiting access to big release titles and immediate customer support. Lowe stressed that MoviePass is committed to giving users the best experience possible, however, this rushed attempt at correcting its image may be too late for some fans. In addition, MoviePass’ stock has seen tumultuous changes over the past week, falling below $1 on Wednesday, August 1, leaving the fate of the company in question. As of Monday morning, August 6, the stock price hovered around $1.