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. MoviePass notified subscribers that it plans to close down the service because its “efforts to recapitalize MoviePass have not been successful to date.” It has formed a strategic review committee, made up of the company’s independent directors, to explore “strategic and financial alternatives” for the company.
Among the options it’s considering are a sale of the company in its entirety, a sale of the company’s assets, including MoviePass, Moviefone and MoviePass Films, as well as the possibility of a reorganization of the company. Helios and Matheson Analytics noted that any transaction would include the “assumption or settlement” of any of its liabilities. Last March, MoviePass launched a revamped version of its unlimited plan, which let users watch one movie per day for $9.95 per month, as part of an eleventh-hour attempt to revive the subscription service. However, the service saw its subsciber base plummet from more than 3 million members to about 225,000 as of April 2019.
Helios and Matheson also took out sizable loans to cover its ballooning losses. Last October, then-New York Attorney General Barbara Underwood opened a probe into Helios and Matheson’s business dealings, alleging the company misled investors regarding its financials.