Ted Farnsworth, the financier who helped set in motion MoviePass’s meteoric rise and precipitous fall, has submitted an offer to purchase the beleaguered subscription service and its parent company, Helios and Matheson Analytics Inc.
Financial terms of the offer were not disclosed, but Farnsworth, who served as Helios’ chairman and chief executive officer is also looking to buy MoviePass Films, a film production company that the company started in 2018, as well as Moviefone, the movie listing and information service it bought that same year.
The offer comes four days after Helios and Matheson announced it was shuttering the money-hemorrhaging service. Many subscribers had already fled, as the company experimented with different pricing models in a bid to survive. At its height the company boasted 3 million customers.
In order to avoid any conflicts of interest, Farnsworth said he had stepped down from his roles at the company and from his position on the board of directors. He did not reveal how he had put together his financing or the members of his investment group.
“I believe there is great unrealized value in MoviePass and we want to rebuild and make sure it reaches its full potential,” Farnsworth said in a statement. “I have always believed in the business model and the brand [former MoviePass CEO] Mitch Lowe and I built at MoviePass. There’s tremendous appetite for movie theater ticket subscription.”
Lowe and Farnsworth made headlines with an aggressive pricing model that they unveiled in 2017 after Helios and Matheson, a data company of little renown, bought a controlling stake in MoviePass. The pair announced that they were slashing MoviePass’s monthly fee from nearly $50 to $9.95, enabling moviegoers to see a movie-a-day for a month. That was less than the cost of a ticket in cities such as New York or Los Angeles, but Farnsworth and Lowe argued that the data they collected on customers would be so valuable they would be able to sell that to studios and turn a profit. They also hoped to win over theater owners, convincing them to cut a deal by proving that they could drive customers to their screens.
The plan didn’t work out and instead MoviePass burned through hundreds of millions of dollars before Helios and Matheson was eventually delisted from the Nasdaq. It is also being investigated for securities fraud by the New York Attorney General for securities fraud and faces several class action lawsuits.
It did help trigger a subscription revolution in the exhibition space. The country’s three largest theater chains, AMC, Regal, and Cinemark, all have unveiled subscription plans for customers as they looked for ways to boost attendance and compete with MoviePass.
Farnsworth, a Miami-based businessman, has an unorthodox resume. He has been involved in everything from energy drink ventures to psychic hotlines. Lowe was an executive at Netflix in the company’s early days.
“Despite the reams of pulp fiction that have been written about MoviePass, we know what went wrong along the way and the many things that went right, “ Farnsworth said in a statement. “After all, we built the fastest growing subscription business in the history of merchandising and numerous copycats are out there now trying to capitalize on our model in the theater industry.”
By the time that MoviePass closed down, its financial situation was dire. Helios and Matheson’s net loss more than doubled in 2018 to $329.3 million, according to its most recent financial filing.