MoviePass Is Coming Back—What Happened?
One of the founders of MoviePass has bought back the company. Here's what happened and why it's returning.
Nov. 12 2021, Published 11:50 a.m. ET
As AMC Entertainment Holdings (NYSE:AMC) opens up its payment options to include cryptocurrency, another movie industry name is being reborn. A co-founder of movie ticketing subscription service MoviePass is repurchasing the brand with plans of bringing it back to life. What happened to MoviePass?
MoviePass co-founder Stacy Spikes repurchased MoviePass from a trustee in a bid approved by a bankruptcy court judge this week. The Southern District of New York bankruptcy court judge granted Spikes ownership on Nov. 8, and the financial transaction occurred two days later.
Spikes plans to bring MoviePass back to the public
The amount Spikes spent repurchasing MoviePass remains undisclosed. The money went to the trustee handling the bankruptcy of MoviePass's former parent company, Helios and Matheson Analytics. Spikes plans to get MoviePass back in working order by next year, relaunching the subscription service.
"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," Spikes told reporters.
The move comes at an interesting time. The streaming service market is nearing saturation and subscription rates are plateauing across the board. Last quarter, Disney+ brought in just 2.1 million subscriptions, compared with 21 million the quarter prior. HBO Max added 570,000 subscribers in the U.S., down from the previous quarter's 2.8 million. Movie theaters are still struggling amid the COVID-19 pandemic, but attendance is returning.
Why MoviePass dropped off
MoviePass was at its height of fame in 2017 but eventually crumbled. According to the FTC, the company "deceptively marketed its 'one movie per day' service, then deployed deceptive tactics aimed at preventing subscribers from using the service as advertised."
In June 2020, Helios and Matheson assets went up for bid in a bankruptcy auction, but no one made the minimum bid of $250,000. At the time, the former parent company valued MoviePass at $1 million–$10 million.
Spikes reportedly had every intention of recouping the company after the failed auction, working since the summer to gather the funds needed to repurchase it.
Reportedly, Spikes's bid was lower than the initial $250,000 minimum. In the time since MoviePass's decline, Spikes founded a company, PreShow Interactive, that brings branded content to video game players in exchange for in-game currency. Spikes may or may not integrate MoviePass with PreShow.
Is MoviePass publicly traded?
The return to Spikes's ownership brings MoviePass new life. After Spikes and his cofounder Hamet Watt developed the company together in 2011, it took six years for formerly public Helios and Matheson to purchase the brand. When Helios (HMNY) delisted in 2019, the subsidiary and parent company jointly filed for bankruptcy the following year. MoviePass was reportedly under investigation and paid $400,000 to the FTC.
Whereas MoviePass is no longer part of a publicly traded company, it will definitely be in the public eye. Unrealistic Ideas—Mark Wahlberg's production company—is preparing a documentary that depicts MoviePass's rise and fall. Spikes, it seems, hopes to change the story's ending on his own.