The end of MoviePass? Service went down after it ran out of money

[RandySF]

Subscribers were frustrated Thursday night when the app went down just as "Mission Impossible: Fallout" was premiering in theaters. It wasn't the first time an outage has occurred on opening night of a blockbuster. It happened earlier this month when "Ant-Man and the Wasp" premiered and during the opening weekend of "Avengers: Infinity War" in April.

That's why users of the movie subscription service speculated on Twitter the outage was intentional to prevent the company from paying for their tickets. MoviePass chalked it up to "technical issues" though, according to an SEC filing, turns out the people on Twitter were right.

MoviePass ran out of money and had to get an emergency $5 million cash loan from a hedge fund to restore service.

"The $5.0 million cash proceeds received from the Demand Note will be used by the Company to pay the Company's merchant and fulfillment processors," the filing said. "If the Company is unable to make required payments to its merchant and fulfillment processors, the merchant and fulfillment processors may cease processing payments for MoviePass, Inc. ('MoviePass'), which would cause a MoviePass service interruption. Such a service interruption occurred on July 26, 2018.

"Such service interruptions could have a material adverse effect on MoviePass' ability to retain its subscribers. This would have an adverse effect on the Company's financial position and results of operations."




https://www.cleveland.com/entertainment/index.ssf/2018/07/the_end_of_moviepass_service_r.html

[vi5]

1. There was no way that business model was going to work..

“You pay us $10 a month and we’ll pay for you to see Up to 30 movies a month”

I tried using it early on and it was a mess of a system. I heard it got better but I wasnt willing to deal with the hassle.

[Tiggeroshii]

2. Except that kerfulfuffle, it has been really reliable for us

But like you say, there's only so long buying people a ton of free movies is going to work for.

[RandySF]

5. Question about MP

Do they still put limits on what you can see and when you can see it?

[vi5]

8. Im not sure..

I cancelled it within a month.

I recently signed up for the AMC a-list program which is $19 a month for up to 3 movies every week, with no restrictions whatsoever. If I see 2 movies a month, especially if Imax or 3d then its paid for itself, but so far ive seen way more rhan that. But i have 3 different AMC multiplexes with a 15 min drive so it works out for me.

[RandySF]

9. I also have the AMC pass

We have three AMC multiplexes within walking distance and I like the ease of getting tickets online with no fees or sales taxes.

[vi5]

10. Same here...

And 2 of the 3 by us have reserved seating and recliner seats which are great. Obviously not worth it if ther are no amc theaters in the area but if there are it is a great deal, and super easy to use.

[PoliticAverse]

3. They're actually paying movie theaters full price for every ticket bought..

They're idea on how they can make that pay off isn't exactly working yet.

How does MoviePass make money (from January):
https://www.wired.com/story/moviepass-second-act/

[TexasBushwhacker]

4. I just don't see how their business model would work

People who pay $10 a month are going to see AT LEAST one movie a month. With regular ticket prices being more than $10, MP is set up for a loss. Sure, they can sell ad space on their app, but I don't see how can that can generate enough revenue for the hit they take on paying full price to the theaters.

[Hassin Bin Sober]

6. We used to joke in the car business "we lose money on every deal but we make it up in volume"

Sounds like these guys are serious.

[vi5]

7. They thought it would work like gym memberships

People who buy subscriptions and never use it would subsidize the ones who use it.

Still a borderline ponzi scheme, and clearly it didnt work out even with ads and selling peoples data.