Founded as an experiment in 2011, MoviePass has now evolved into an increasingly common, and affordable option for visiting the theater. Recently however, the company’s financial situation has been called into question – its profits stemming from few sources – as it struggles to remain solvent.

 

MoviePass spent 6 years in infancy being tested in several regions for short stints of time, and with varying pricing models. In August 2017, they introduced their “unlimited” subscription plan: one movie per day, for $9.95/mo. By September 2017, their subscriber base reached 400k. By February 2018, they offered the same plan for $7.95/mo. if paid annually. They acquired 2 million subscribers by this point and lowered the annual subscription’s monthly price to $6.95/mo. It seemed too good to be true, and it was.

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As MoviePass was losing money, a data analysis company, Helios Matheson Analytics advanced $55 million to MoviePass, increasing their ownership from 62.4% to 81.2%. Another $35 million later, and their ownership reached 91.8%. As primary owner, the majority of profits gleaned from MoviePass has been in the form of selling users’ viewing habits to movie studios and movie theater chains. This is no different from companies like Google and Facebook, where the user is the product, not the free service.

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In April 2018, the “unlimited” plan was removed without warning and users were blocked from “select” (the most popular) films. Two weeks later though, the plan was reinstated, and the limited option was maintained at only $7.95/mo. At the same time, Helios upset investors by selling $150 million in stock, with $30 million undersold. Their proceeds went towards funding MoviePass.

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In May, MoviePass lost $40 million dollars, and to attempt to make up for it, began using peak pricing to add any where from $2-6 during surge movie viewing times (customers could waive one peak pricing fee per mo.). Helios purchased the assets of Emmett Furla Oasis Films and created a new subsidiary, MoviePass Films, which is to function similarly to Netflix Originals, minus the exclusivity. Ownership of MoviePass was now split between the two companies 51/49, in favor of Helios. By June, MoviePass Films released “American Animals” and “Gotti,” and reached 3 million total subscribers.

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MoviePass was still losing money regardless. Helios raised $1.2 billion in July just to keep the service running, which went down on the 26th of the month, but continued after MoviePass borrowed $5 million.

As of recent, MoviePass considered raising the price of their “unlimited” plan to $14.95 but opted instead for a limitation of 3 movies/mo.; additional tickets would have a $5 discount. They also further limited the selection of qualifying movies to 6 movies, which change depending on the day.

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Shaky financial decisions have limited the once incredibly attractive deal of one movie/day for $9.95/mo. to only three films. The new plan is certainly not a bad deal, but whether it is here to stay seems unlikely unless MoviePass acquires drastically more subscribers, as the more infrequent movie-goers carry the financial weight of those who take full advantage of the service.