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On Friday the 13th, the corporate horror film that was MoviePass seemed to reach its bloody end.
Helios and Matheson Analytics Inc.
HMNY, -10.00%
, the parent company of the service that sought to give users an unlimited entry to the movies at the theater as they wished for a monthly subscription price, announced Friday afternoon the closure of the service from Saturday. The company's board of directors is studying various options, including the sale of its entire business or simply MoviePass.
The service has been inactive since closing just before the weekend of July 4th, which, according to Helios & Matheson, was a pause to update the application and "recapitalize" the troubled sector of the film subscription . In Friday's announcement, however, the company said "its efforts to recapitalize MoviePass have not resulted in this day."
"The company is unable to predict whether or when the MoviePass service will be maintained," reads the statement. "The company is continuing its efforts to seek funding to finance its activities. There can be no assurance that such funding will be obtained or available on terms acceptable to the Committee. "
Helios & Matheson was a sleepy company in data analysis when it acquired MoviePass about two years ago. The service had only 20,000 subscribers at the time, but quickly began attracting new users after Helios & Matheson raised its large stake and reduced MoviePass's monthly fee from $ 9 to $ 50. per month, to finally exceed the 3 million mark.
The shares of Helios & Matheson were multiplied by more than 10 while the investors gave way to the market of the subscription of films, but they warned against heavy losses by paying the high price to the rooms of cinema so that people can see as many movies as they want each month for just about the price of one. The ticket finally came true. Helios & Matheson had cash deficits of more than $ 20 million a month, according to information provided to the Securities and Exchange Commission.
For more: The spectacular climbs and falls of MoviePass
The film companies, who had initially mocked the idea of MoviePass, became competitors. AMC Entertainment Holding Inc.
CMA + 2.22%
For example, its loyalty program, AMC Stubs, introduces a new level that allows users to see up to 3 movies a week for $ 19.95 per month. On the anniversary of the launch of this service in June, AMC said that 860,000 people had registered for the A-list service.
Helios & Matheson executives had previously said they knew the service would lose money, but they hoped to save time by monetizing user data and selling advertising for movie and theater channels. However, this plan did not bear fruit and the company's shares plunged even in the midst of splits that sought to raise the price. The shares, which sell for a fraction of a penny, fell 10% at the end of Friday's session, as the news announcement, from 0.2 cents to 0.18 cents.
Previous coverage of MarketWatch editor Sarah Toy contributed to this article.
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