×

MoviePass Suspends Service Citing Technical Problems, Plans to Recapitalize Company

Starting July 4, MoviePass will be out of commission for the next several weeks — at least — with the struggling theater-subscription service provider saying it needs to fix technical issues and finish work on a new version of its app.

There was also a hint that the money-losing MoviePass business is running low on funds. The company, in announcing the temporary shutdown, said it “plans to use this time to recapitalize in order to facilitate a seamless transition and improved subscriber experience once the service continues.”

As of March 21, 2019, MoviePass’ parent company — Helios and Matheson Analytics — said it had cash on hand of about $2.8 million and $13.1 million on deposit with its merchant and fulfillment processors related to MoviePass subscription revenue. Helios and Matheson said it netted $5.56 million in new financing from “certain institutional investors,” which closed March 25.

Helios and Matheson’s net loss more than doubled in 2018, to $329.3 million, on revenue of $232.3 million, according to its latest financial filing. The company took a $38.5 million write-down for the third quarter of 2018 related to the impairment of goodwill in the MoviePass business, and it said it expects to record an impairment charge of $35.9 million for Q4 for MoviePass.

MoviePass said it put the service on hiatus starting at 5 a.m. ET on July 4. The company said the suspension is due to “maintenance-related issues.” It didn’t provide details on what the problems are or how the new MoviePass app will be enhanced.

“Once we have resolved these technical problems, the service will be live again. We estimate this process will take several weeks,” MoviePass said in a tweet Wednesday.

During MoviePass’ shutdown, subscribers will not be charged and they’ll be automatically credited for the number of affected days once the service continues, according to the company. In addition, MoviePass currently is not accepting new subscribers.

In a statement, MoviePass CEO Mitch Lowe said the suspension is required to complete work on an improved version of the MoviePass mobile application. “There’s never a good time to have to do this,” Lowe said. “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.”

The number of MoviePass subscribers plummeted from more than 3 million last year to just 225,000 in under a year, according to Business Insider report in April. A MoviePass spokeswoman disputed the report but declined to provide current subscriber figures.

The subscriber plunge stemmed from MoviePass’ change in August 2018 to eliminate the one-movie-per-day plan, priced at $9.95 per month. The new $9.95 plan allows subscribers to see just three movies each month. This year, it rolled out a refashioned “unlimited” option, for $14.95 per month, to again allow customers to see one movie daily but warning that movie choices will be restricted based on “system-wide capacity.”

Helios and Matheson is the target of a securities-fraud probe by the New York Attorney General, which is looking into whether the company misled investors. MoviePass also is the target of a class-action lawsuit by subscribers claiming the change in the “unlimited” plan was a deceptive “bait-and-switch” tactic.

Helios and Matheson Analytics currently owns approximately 92% of the outstanding shares of MoviePass, after closing a deal to acquire control of the service in December 2017. Helios and Matheson fully owns MoviePass Ventures, which was established to acquire completed indie films, and 51% of MoviePass Films, a joint venture with Emmett/Furla Films. The company also owns Moviefone, which it bought from Verizon last year.

Popular on Variety

More Film

  • Constance Wu and Jennifer Lopez star

    Box Office: Jennifer Lopez 'Hustlers' Heading for $25 Million Launch

    STX Entertainment’s “Hustlers,” a comedic thriller about strip-club employees seeking revenge, is expected to earn $25 million when it opens on Sept. 13, according to early tracking. The movie — starring Jennifer Lopez, Constance Wu, Lili Reinhart, Keke Palmer, Cardi B and Lizzo — will debut alongside Warner Bros.’ “The Goldfinch.” The drama, based on [...]

  • AMC TheatresShop signs, Los Angeles, America

    AMC Theatres Lays Off 35 Corporate Staffers

    AMC Entertainment has laid off 35 corporate staffers and will not fill an additional 15 open jobs. The Kansas-based chain made the announcement Thursday as part of a previously announced “profit improvement plan” intended to achieve operating and administrative efficiencies. AMC, which operates more than 10,000 movie screens, had disclosed the plan on Aug. 8 [...]

  • Ann Sarnoff Warner Bros

    Ann Sarnoff Formally Takes Reins of Warner Bros. as CEO

    The Ann Sarnoff era at Warner Bros. has begun. Sarnoff formally took the reins as Warner Bros. chair-CEO on Thursday, two months after she was appointed to the post. Sarnoff told employees in a memo that she has been impressed by the company’s track record during the past year amid a period of upheaval for [...]

  • Take Me Somewhere Nice review

    Ena Sendijarevic on Migration, Identity and the Question of Belonging

    Bosnian filmmaker Ena Sendijarević had an auspicious debut with “Import,” a short film which world premiered in Cannes’ Directors’ Fortnight in 2016. Drawing on her own family’s personal history, the Amsterdam-based director crafted an idiosyncratic tale about a family of Bosnian refugees trying to make a new home in the Netherlands. With her feature debut, [...]

  • Portrait of a Lady on Fire

    Haugesund Prizes ‘Portrait of a Lady on Fire,’ ‘Him,’ ‘Ballon’

    HAUGESUND, Norway  —  Celine Sciamma’s intellectually dexterous, bittersweet love tale “Portrait of a Lady on Fire” has claimed another heart, taking home The Norwegian Film-Critics’ Prize at the Haugesund Film Festival’s closing night on Thursday. The festival, which runs over August 17-23, capped its 47th edition with a screening of André Løyning and Kristian Landmark’s [...]

  • Motherless Brooklyn Edward Norton

    Edward Norton Investigates Murder in 'Motherless Brooklyn' Trailer

    The trailer for Edward Norton’s forthcoming crime drama “Motherless Brooklyn” is officially out. Warner Bros.’ drama, based on the 1999 novel by Jonathan Lethem, follows Lionel Essrog, a young man who works for a small-time mobster in Brooklyn while struggling with an intense case of Tourette Syndrome. “Okay, listen, I got something wrong with me, [...]

  • Summer Box Office

    Box Office Report Card: Studios Get Their Summer Grades

    Studios got badly burned this summer. From May to August, popcorn season in movie speak, the film flops piled up and the big hits were few and far between for nearly every company except Disney. As a whole, summer did little to instill confidence in the state of moviegoing. To be sure, there were successes [...]

More From Our Brands

Access exclusive content