The theater-subscription company MoviePass is making a comeback, thanks to its cofounder Stacy Spikes who was recently granted full ownership of the company. It had shut down in 2019.
A Southern District of New York bankruptcy court judge recently approved the sale of the company to Spikes after he placed a bid for an undisclosed amount to the trustee handling the bankruptcy of the former parent company.
“We are thrilled to have it [MoviePass] back and are exploring the possibility of relaunching soon,” Spikes said in a statement to Business Insider. “Our pursuit to reclaim the brand was encouraged by the continued interest from the moviegoing community. We believe, if done properly, theatrical subscription can play an instrumental role in lifting moviegoing attendance to new heights.”
MoviePass was founded in 2011 by technology and entertainment entrepreneurs Spikes and Hamet Watt. It launched in the summer of 2017 as a movie theater ticket subscription service after being in beta for six years and attracted major investors such as True Ventures, AOL Ventures, Lambert Media, Moxie Pictures, and other investors.
When Spikes and Watt originally launched MoviePass, they were creating a subscription service that would allow moviegoers to watch a specific number of movies per month. For a monthly fee, MoviePass allowed subscribers to purchase up to three movie tickets per month. The concept was simple: Members would receive MoviePass customer cards that worked like debit cards. The MoviePass cards, which were issued by Mastercard, carried a cash balance and users would pay for movies using the card, as described by TechCrunch. The service utilized a mobile app that let users check in to a theater and choose a movie and show time. Once they selected a film, the cost of the ticket was loaded to the prepaid debit card.
Although the partners faced resistance from movie theater chains, they persisted with their project until they landed a deal with Helios and Metheson Analytics. In 2017, Helios and Metheson Analytics acquired MoviePass. However, Spikes butted heads with MoviePass’ parent company, and Spikes was fired in 2018.
When MoviePass initially launched it offered a one-movie-per-day plan for $30-$40 monthly. It soon after cut the monthly fee to $9.95 for one movie per day, according to Variety. Faced with revenue challenges, MoviePass debuted a new “unlimited” option for $14.95 per month in 2018. Under this new member plan, users were allowed one movie a day but with limited movie selections. The revamped MoviePass seemed to have worked. In June 2018, the company announced in a press release that it had more than three million paying subscribers, Business Insider reported.
Still, the company was burning through hundreds of millions of dollars, was facing several lawsuits as well as dealing with FTC complaint, Variety reported. The MoviePass concept gained interest from the public initially but began to collapse within a year as its expenses exceeded revenue by $40 million.
In September 2019, MoviePass notified remaining subscribers that it would be shutting down indefinitely, saying at the time that its “efforts to recapitalize MoviePass have not been successful to date.”
By June 2020, MoviePass was included in the bankruptcy auction of its parent company Helios and Metheson Analytics. The estimated value of MoviePass fell between $1 million and $10 million, with the minimum bid set at $250,0000, according to Variety. However, there were no competitive bids for the company at the end of the auction.
In October, after working to find financing, Spikes made an offer. Spikes did not share his purchasing amount, but the Wall Street Journal, citing court documents, reports that the price was $140,000.
Spikes is ready to relaunch MoviePass in 2022. He has already launched new website, www.iwantmoviepass.com, to attract investors. In addition, the new company is working on its rebranding.
After Spikes was fired from MoviePass, he went on to establish PreShow Interactive for gamers who want to view branded content using in-game currency. Repurchasing MoviePass will allow Spikes the opportunity to return to his original mission of offering moviegoers options that will fulfill their entertainment needs.
“At the end of the day, the playbook is: great service, great product, reliability, transparency, meeting with consumers on a regular basis,” Spikes told The Wrap. “All of those are things that we did before that made the company great and exciting and worthy of an acquisition before, that was radically changing the industry, we want to bring those back.”