There’s the old saying – “if it’s too good to be true, it probably is.” Patrons of the movie theatre subscription service MoviePass enjoyed its bewilderingly cheap introductory price, $9.95 a month, to see one movie per day, every day, without too many mishaps.
However, last week, the company ran out of money and temporarily shut down the app for a night.
“If the Company is unable to make required payments to its merchant and fulfillment processors, the merchant and fulfillment processors may cease processing payments for MoviePass, Inc. (“MoviePass”), which would cause a MoviePass service interruption,” noted parent company Helios and Matheson Analytics in an Securities and Exchange Commission filing, according to Business Insider.
The company then borrowed $6.2 million, ($5 million in cash), from Hudson Bay Capital Management, to turn the service back on, but patrons still experienced difficulty with the service the next morning.
Patrons were not pleased with the shutdown, as the blackout disallowed them to attend summer blockbusters such as Mission Impossible: Fallout.
We are still experiencing technical issues with our card-based check-in process and we are diligently working to resolve the issue. In the interim e-ticketing is working. We apologize for the inconvenience and appreciate your patience while we resolve this issue.
— MoviePass (@MoviePass) July 27, 2018
I wanted to go see that new Tom Cruise movie tonight but it looks like the @MoviePass blackout is going to make that Mission: Impossible.
I did it! The worst possible tweet!
— Andrew Berg (@aberg7) August 3, 2018
Literally 21 movie theaters in my area in Las Vegas supported on @MoviePass app and every theater displaying same message “There are no more screenings…” What’s up with this? #MoviePass pic.twitter.com/Rw9TrP2WJl
— Justin L. McVay (@TheJustinMcVay) July 30, 2018
MoviePass released an official statement the next day. Instead of focusing on the issue which caused the shutdown, the statement highlighted MoviePass’ premium demand-base features, such as Bring-a-Guest and IMAX viewings, which could be a possible future tactic for MoviePass to bring in the revenue it needs to stay afloat.
“Together, we are reviving moviegoing — and everything that goes along with it,” said CEO Mitch Lowe in the statement. Lowe also argued that when customers don’t see movies they want to attend on the app, “this is no different than other in-home streaming options that often don’t carry the latest shows or movies that may be available on other services.”
Market shares for Helios and Matheson closed Friday at just 7 cents per share. Shares hit an all-time high of $38.78 in October and according to the Markets Insider real time market feed, shares are currently at 9 cents.
As rival movie subscriptions services continue to join the market, it’s a now question of how much longer MoviePass can sustain itself.
In June, AMC Theatres announced its AMC Stubs A-List program, where customers can see up to three movies per week at AMC theatres at $19.95 per month, with no additional premium fees for 3D or IMAX movies. In addition, AMC’s program features advance ticket ordering, while MoviePass worked as a physical card that customers needed to bring directly to the box office.
Other notable premium movie services to hit the market include Sinemia. Sinemia offers various pricing levels, with $3.99 per month covering one ticket, $7.99 for two, etc. Another service, the Cinemark Movie Club only offers one discount ticket per month for $9.
Only time will tell if the company will be able to survive. The ultimate demise of the company would set a precedent for future premium movie services to come.
Whether it lasts the month or not, MoviePass has succeeded in disrupting the lucrative movie exhibition industry.