Moviepass has shut down on the grounds of its inability to recapitalize the company. It can't confirm if or when it will re-establish the service
Moviepass has shut down on the grounds of its inability to recapitalize the company. It can't confirm if or when it will re-establish the service.
This news sits within a larger announcement by the parent company Helios & Matheson to create a board committee to explore all strategic and financial alternatives for the company. The company was delisted from NASDAQ when its price fell under $1 (it had previously reached $5,100 in October 2017).
Finally, Helios & Matheson has run out of cash before it could prove their arguable prediction that it would become profitable when it reached 5 million subscribers. The model has proven unsustainable in the long run, as many industry analysts predicted, even when considered as a loss leader for two more profitable revenue streams: marketing and F&B revenue share, which it planned to exploit by influencing audience behaviour. The price point was far too aggressive for the proposition, so the company ended up using too much cash that could not be offset with these other streams.
Its closest competitor, Sinemia, which was present also in many other territories worldwide, closed in April due to funding issues and legal proceedings (which it was facing from subscribers and Moviepass itself). This places a question over the whole notion of third-party subscription services within cinema exhibition, as opposed to those launched by the exhibitors themselves.
Moviepass contributed to a peak of Box Office and admissions in the US in the last 2 years by funding cinema tickets, of which cinema-goers had only technically paid a fraction of the full price. This will be a factor to consider when analysing box office and admissions figures this and next year.
In the US cinema industry, Moviepass has impacted cinema-goers and exhibitors alike by reducing the perceived value of the cinema experience with an all-you-can-eat plan (with caveats – e.g. 2D films only) for under $10, cheaper than one cinema ticket. On the other hand, it sparked more sustainable subscription programs from cinema chains that now have the opportunity to take up part of these subscribers.
Both AMC (owned by Wanda) and Regal (now owned by Cineworld) in the US could benefit from the announcement by trying to capture some subscribers for their respective A-List Stubs and Unlimited Regal services, although they are already doing quite well. They range from $18.95 to $23.95 depending on locations and offer three movies a week (AMC) or unlimited runs (Regal) in addition to other perks.