The struggles of MoviePass, the film subscription service

To many, MoviePass was an overnight sensation whose too good to be true monthly cost was a sign of its potential to revolutionize the theater industry. The promise of being able to see as many newly released movies as you wanted for less than the price of a single normal ticket was intoxicating enough to convince much of the public that MoviePass had a game plan in place. 

But there were a handful of people within the company who had long been sounding alarms about its unsustainable growth. MoviePass, MovieCrash — director Muta’Ali’s new HBO documentary — is a damning account of how MoviePass’ C-suite executives were dead set on ignoring all the warning signs leading up to its filing for bankruptcy in 2020. And while the film plays into some of the same wide-eyed mythmaking that ultimately doomed its disruptive subject, it lays bare how the chase for exponential profits can doom companies that seem to have everything going for them.

Mitch Lowe and Ted Farnsworth already settled with the FTC over fraudulent activity affecting MoviePass customers, and are being sued by the SEC, but now the former heads of MoviePass and its parent company, Helios and Matheson Analytics (HMNY), are facing criminal allegations of securities fraud and wire fraud.

The Department of Justice announced the charges today, saying false statements made by both men defrauded investors in HMNY when the execs pretended like the company’s money-losing $9.95 “unlimited” moviegoing plan had any hope of profitability.

MoviePass is back, kind of. Starting today, you can sign up to be on a waitlist to become a MoviePass subscriber, and if you want to, you should move quickly since the waitlist will only be open for five days. The new MoviePass is scheduled to launch around Labor Day, and its first users will be those at the top of the waitlist.

If you’re wondering what, exactly, this new MoviePass is going to be... join the club. This is the company that once promised all the in-theater movies you could watch for $10 a month, only to quickly discover that business plan both infuriated theaters and effectively set millions of dollars on fire. It got so bad so fast that Helios and Matheson Analytics, the parent company of MoviePass, went bankrupt last year.

Two years after the wildly popular subscription service MoviePass crashed and burned, its co-founder Stacy Spikes is determined to bring it back. Spikes says MoviePass will return this summer.

The company, recently bought by Spikes after his unceremonious ouster from MoviePass in 2018, held its launch event today at the Walter Reade Theater at Lincoln Center in NYC. Spikes began by wasting absolutely no time addressing the Helios and Matheson Analytics-shaped elephant in the room. The firm is now infamous for being the parent company of MoviePass that managed to blow the entire thing up shortly after the firm bought the startup, which became famous for offering unlimited movie tickets for a monthly fee.

MoviePass might be making a comeback soon, after Stacy Spikes (one of the service’s original co-founders) successfully bought back the company out of bankruptcy earlier this week, according to a report from Insider. Spikes is hoping to relaunch the company sometime next year, although there are few details on that yet.

“I can confirm that we acquired MoviePass out of bankruptcy on Wednesday,” Spikes commented in a statement to Insider. “We are thrilled to have it back and are exploring the possibility of relaunching soon. Our pursuit to reclaim the brand was encouraged by the continued interest from the moviegoing community. We believe, if done properly, theatrical subscription can play an instrumental role in lifting moviegoing attendance to new heights.”

In case you thought the MoviePass saga would remain a smoldering heap of yesterday’s news from here on out, guess again. Helios and Matheson Analytics, the theater subscription service’s parent company, has at last filed for bankruptcy, according to The Wrap. While that may sound like it signals the complete end of all things MoviePass, there’s one interesting wrinkle: the company may owe subscribers a total of more than $1.2 million.

“As a result of filing the Petition, a Chapter 7 trustee will be appointed by the Bankruptcy Court to administer the estate of the Company and to perform the duties set forth in Section 704 of the Code,” reads a filing with the US Securities and Exchange Commission. That means MoviePass’ assets will all likely be sold off in an attempt to pull together the money it owes customers for unused services, as MoviePass was actively charging users up until it suddenly shut down last September.

Theater-subscription service MoviePass officially shut down on Saturday, September 14th, ending the platform’s controversial two-year run as a would-be disruptor of the moviegoing business. Many pundits rightly pointed out that the company’s end seemed inevitable the moment the analytics firm Helios and Matheson purchased a majority share in the company, then dramatically dropped its monthly fee in August 2017. The new subscription plan offered users a movie ticket a day — access to films in any theater, in any market — for less than $10 a month, ensuring the company would spend more on its customers than they would pay to use the service.

Who can blame those early detractors? From the onset of the price drop, MoviePass’ model was literally too good to be true. The company played the middleman by buying movie tickets at list price, then giving them to subscribers. The initial hope was that most subscribers wouldn’t actually use the service regularly — like gyms, which use no-show subscribers to financially offset their heavy users. But as it turns out, people like movies more than they like going to the gym. Many MoviePass subscribers who were attracted to the new service by the lower price began using it frequently. MoviePass started losing money on virtually every subscriber, and it then went bankrupt. 

MoviePass, the subscription service that spent enormous amounts of venture capitalists’ money subsidizing movie tickets in a bid to upend the theater business model, is officially shutting down on September 14th. The news was announced today via emails to subscribers and separately in a press release issued by parent company Helios and Matheson. It marks the end of a tumultuous two-year saga that saw a once-popular platform go to extreme lengths to keep its business running, despite the obvious and fraught financial cost.

Last we heard of MoviePass, the company was laying off huge swaths of its staff, including the team responsible for brokering partnerships with movie theaters, following a sudden, supposedly temporary shutdown of its services in July. The company didn’t say when it would begin operating again, but most monthly and annual subscribers were left with an app that wouldn’t work and a debit card that no longer functioned — and no timeline regarding the service’s eventual return. (MoviePass claimed it had restored service to some users, but it’s not clear that ever happened.) Last month, MoviePass was also found to have exposed thousands of its customers’ credit card numbers in plain text online, rounding out a particularly rough few months of bad press.

MoviePass, the theater subscription service still inexplicably trying to stay in business, left thousands of customers’ credit card numbers and other sensitive pieces of data exposed for anyone to find on an online database, according to a report from TechCrunch. A cybersecurity expert named Mossab Hussain, from a Dubai-based firm named SpiderSilk, discovered the unprotected server and shared sample data sets with TechCrunch to confirm that MoviePass was in fact leaving the data unencrypted and accessible to anyone.

According to TechCrunch, the data includes both MoviePass debit card numbers and the actual personal credit card details of customers, including credit card numbers, expiration dates, billing addresses, and names. TechCrunch says the data was enough in some cases to make fraudulent credit card purchases using other people’s cards. The report also states how Hussain found email addresses and failed login data logged on the unprotected server, and TechCrunch tested this by making a failed login attempt using a dummy account. The database showed the information, unencrypted, “almost immediately.”

Struggling theater subscription service MoviePass reportedly resorted to extreme tactics to prevent users from taking advantage of core features, according to a new report from Business Insider. In particular, the report highlights a strategy the company used to keep users from bankrupting it, by changing account passwords to prevent ticket purchases that might cost it money it didn’t have.

Business Insider’s report looks at how Ted Farnsworth, CEO of MoviePass parent company Helios & Matheson Analytics, and MoviePass CEO Mitch Lowe, transformed the company from a little-known subscription service to a nationwide sensation. It also delves deep into the questionable business strategies and tactics the duo used to keep the company afloat, all while it hemorrhaged money by fronting subscribers the full cost of a movie ticket. MoviePass was not immediately available for comment.

MoviePass, the long-embattled film subscription service, has shut down for “several weeks” in order to complete work on an updated version of its app and to recapitalize for when the service relaunches. “There’s never a good time to have to do this,” MoviePass CEO Mitch Lowe said in a statement, “but to complete the improved version of our app, one that we believe will provide a much better experience for our subscribers, it has to be done.” Lowe’s statement promised “an enhanced technology platform, which is in the final stages of completion,” in the upcoming app.

The service shut down on July 4th at 5AM ET, and MoviePass has not announced when it will come back online. During this period, MoviePass will not accept new sign-ups, and existing subscribers will not be charged while the service is offline. Subscribers will also be automatically credited for the downtime once the service is back online. 

Less than four months after it announced its last set of cinema subscription changes, MoviePass is shaking up its pricing model once again and is reintroducing its unlimited plan. TechCrunch notes that MoviePass Uncapped, as the plan is now called, offers you an unlimited number of movie screenings each month, with prices starting at $9.95. The service is exclusively available in the US.

Unlike the plans that have been in place since last August (which imposed a hard limit of three movie showings a month), MoviePass Uncapped ostensibly lets you see an unlimited number of films. However, there are some pretty heavy caveats. The service’s terms say that the company may limit your film selection based on location, times, movie titles, and even your own historical usage.

Starting on January 1st, MoviePass will offer a three-tiered subscription plan to movie tickets which will give its customers varying levels of access to the latest films in cinemas (via NYTimes). Although all three tiers will be limited to just three regular cinema showings a month, more expensive plans will remove restrictions on which films you can see, and will also offer limited access to Imax and 3D film screenings. The plans are a far cry from the original $9.95/mth one-film-a-day offering, but might give the beleaguered service a chance at survival.

Prices start at $10 to $15 for the company’s Select plan, with the exact rate dependant on whether you want access to more expensive cinemas in big cities. This basic plan is similar to what MoviePass has been offering since it changed its subscription model back in August, meaning you only get to select from certain movies on certain days. Stepping up to its All Access plan for $15 to $20 removes these restrictions, although you’ll need to opt for the final tier, Red Carpet, if you want to be able to see Imax or 3D movies. Even on this final tier, which costs between $20 and $25, you’ll only be able to see one of these premium screenings per month.

It’s been a grim year for MoviePass, the endlessly embattled movie subscription service. The company, which built a base of reportedly more than 3 million subscribers with a deal that let users watch a movie a day in theaters for under $10 a month, has been losing money at a prodigious rate. Over the course of 2018, it repeatedly retooled its basic subscription, forced annual subscribers onto a monthly plan, and dealt with plummeting stock prices after repeated reports that it was out of funds.

Most recently, parent company Helios and Matheson — which is facing a class-action lawsuit from its shareholders and a fraud investigation — spun MoviePass off into a separate company, in an apparent attempt to dissociate itself from the toxic reactions to the increasingly limited service it could provide.

MoviePass parent company Helios and Matheson has announced a preliminary plan to spin off the struggling movie subscription service into its own company.

“Since we acquired control of MoviePass in December 2017, HMNY largely has become synonymous with MoviePass in the public’s eye, leading us to believe that our shareholders and the market perception of HMNY might benefit from separating our movie-related assets from the rest of our company,” Helios and Matheson CEO Ted Farnsworth said in a press release.

The New York attorney general’s office is launching an investigation into MoviePass’ parent company, Helios and Matheson, over allegedly misleading investors.

A person familiar with the investigation confirmed to The Verge that an investigation is underway. The news was first reported by CNBC. The investigation is set to determine “whether the company misled the investment community regarding the company’s financials,” according to CNBC. The attorney general’s office is using New York’s Martin Act, which was designed to protect both investors and financial institutions from fraud, to pursue the investigation.

MoviePass subscribers have had a tough go of it over the last six months, with the service changing terms, dropping unlimited moviegoing, limiting access to first-run movies, and in at least once instance, going offline completely because it ran out of money. The myriad changes have removed most of the incentives that made MoviePass a compelling value in the first place, so customers have been using it less and less — and according to the head of MoviePass’ parent company, that’s exactly what the owners want.

“People are going to less than one movie a month,” Helios and Matheson CEO Ted Farnsworth said on Tuesday during a chat at The Wrap’s entertainment industry conference, TheGrill. “So technically, subscription alone right now is doing just fine, now it’s tacking on all the other things on top of it.”

The latest attempt from struggling theater subscription service MoviePass to retain its dwindling user base comes in the form of yet another change to its monthly plan. This time, however, the company is automatically enrolling lapsed former subscribers into its service, saying its choosing those users to be part of a “select test group” to try a version of MoviePass similar to its original one-movie-per-day plan.

In an email sent to select MoviePass customers who decided not to opt into the company’s revised three-movie monthly plan, first unveiled last month, the company says it’s decided to enroll those people into a new subscription because “we really hope you begin enjoying your MoviePass subscription.” If they don’t want to be charged for the service, MoviePass is demanding they proactively opt-out of the plan they were enrolled in without their consent by Thursday, October 4th.

The struggling movie subscription service MoviePass has sent an email to members who have annual subscriptions, forcing them onto the same terms as monthly subscribers and offering them prorated refunds if they want to cancel their membership instead.

“We want to thank you for being a loyal member of our annual MoviePass plan. Your commitment to MoviePass has contributed to making our vision for an accessible and affordable moviegoing experience a reality,” reads the email. “After experimenting with different models and options, we believe that our current monthly plan captures the need of our community — keeping prices low while continually striving to offer a wider selection of films.”

The embattled film-subscription service MoviePass launched its promised new subscriber plan today, the one it previously announced would replace its existing standard one-movie-ticket-per-day plan. As predicted, the new plan is meant to allow subscribers to see three movies per month for a $9.95 subscription fee. But it also adds unexpected new restrictions: according to an email gradually rolling out to subscribers, MoviePass will curate a daily shortlist of movies each day that will be available to subscribers. The first week’s menu of movies has been posted on MoviePass’ website.

In a letter to subscribers that rolled out with the new plan, MoviePass says, “As we transition to the new subscription plan, we want to share more details about our service moving forward as part of our commitment to keep you fully informed. For the time being, we will be limiting the films and showtimes that are available to members each day. During this transition period, MoviePass will offer up to six films to choose from daily, including a selection of major studio first-run films and independent releases.”

MoviePass parent Helios and Matheson has quietly posted its quarterly earnings report, revealing that operating losses have ballooned from less than $3 million this quarter last year to $126.6 million in the three-month period ending on June 30th, 2018. Losses undoubtedly stem from MoviePass’ struggle to generate revenue from its theater subscription service, which launched just under a year ago for $9.95 a month after the company sold a majority of its stake to Helios and Matheson.

The report also shows that the MoviePass parent burned through more than $219 million in Q2 2018 — or approximately $73 million a month — and has only $51.4 million in assets left. That run rate is more than triple the $21 million a month rate we last reported in May. If this continues, MoviePass will run out of money in less than two months.

MoviePass, the struggling theater subscription service, is rolling out a new plan on Wednesday, August 15th, that will limit users to three movies per month, in addition to existing restrictions on popular first-run films. It’s yet another cost-cutting measure in an attempt to combat severe revenue shortfalls to save the company. But ahead of this new plan, some fed-up users who decided to cancel their MoviePass subscriptions are receiving confusing emails that suggest the company has enrolled them in its new, modified plan without their consent.

“Please note: if you had previously requested cancellation prior to opting-in, your opt-in to the new plan will take priority and your account will not be cancelled,” reads an email sent from MoviePass yesterday to user Cristen Brinkerhoff, who shared the automated message with The Verge. Brinkerhoff, who’s been a MoviePass subscriber since November 2017, canceled her plan on July 31st after MoviePass revealed its plan to raise prices and limit access to popular new movies.