The game-changing theater ticketing service MoviePass will shut down this Saturday in a move that CNN says is temporary, but the report adds that “it’s unclear if it will return.” The company describes the move as a “service disruption.”
“MoviePass’ CEO Mitch Lowe posted a letter on the service’s website Friday that said ‘at this point, we are unable to predict if or when the MoviePass service will continue.'” CNN reports, adding: “Helios and Matheson (HMNY), the parent company of MoviePass, announced that it would be interrupting the service on Saturday. Helios and Matheson’s efforts to recapitalize MoviePass have ‘not been successful to date,’ the company said in a press release on Friday.”
Helios and Matheson is quoted saying in the statement: “The Company is unable to predict if or when the MoviePass service will continue. The Company is continuing its efforts to seek financing to fund its operations.There can be no assurance that any such financing will be obtained or available on terms acceptable to the Committee.”
CNN adds: “MoviePass sent shock waves through Hollywood in the summer of 2017 when it dropped its monthly subscription fee to $10 a month, which allowed users to see one movie a day. After that, the service grew rapidly to 3 million subscribers in less than a year.”
But the low subscription price combined with the surge in subscribers prompted industry observers to speculate that the MoviePass business model might not be sustainable.
“Helios and Matheson issued a dire warning in April of 2018 about the company’s ability to stay in business,” CNN notes. “MoviePass eventually raised its prices and began to limit access to blockbuster movies. In December, the company announced that it was changing its prices once again, this time adopting a tiered plan.”
Click here to read the full message posted on the MoviePass website.