The owner of MoviePass, the subscription service that offered cinema-goers a deal that appeared to be too good to be true, filed for Chapter 7 bankruptcy on Tuesday, according to documents filed with the Securities and Exchange Commission.
“What took them so long? Not a shocker at all,” said Michael Pachter, managing director of Wedbush Securities. “They were selling dollars for nickels, it was an unsustainable model.”
MoviePass, which was backed by Helios and Matheson Analytics, initially styled itself as a kind of Netflix-without-the-sofa, offering a $9.95 monthly subscription that allowed subscribers to go and see one movie every day. In markets such as New York, where an adult ticket costs between $15-$20, the company appeared to be offering an unbeatable deal.
However, as more and more people signed up for the service, some theaters began to refuse MoviePass customers. “Absent some other form of other compensation, MoviePass will be losing money on every subscriber seeing two movies or more in a month,” said AMC in a statement announcing that decision in August 2017. AMC later launched its own subscription pass.
As the debacle worsened, MoviePass ran into financial problems, its app suffered a host of technical issues, and the company dramatically reduced the number of movies that subscribers could see. Customers were outraged that they could now only watch three movies per month, instead of 30, and the company was pilloried on social media.
MoviePass finally shut down in September last year — after which some subscribers said they were still being charged a monthly fee, according to some reports.
No one was available at the Helios and Matheson headquarters in New York to answer calls from NBC News. A PR company listed on the Helios website, Pollack PR Marketing Group, said it was no longer working for the firm.
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