MoviePass Announces Temporary Shutdown
MoviePass subscribers may be having trouble accessing their account this week. That’s because as of July 4, the company announced that it was temporarily shutting down service in order to fix a technical issue and to complete a new version of their app. This is the latest move in a year-plus of changes for the company that have left subscribers unhappy.
According to Variety, the shuttering also is a sign that the company has been running low on funds, as MoviePass added in their statement that they had “plans to use this time to recapitalize in order to facilitate a seamless transition and improved subscriber experience once the service continues.”
According to the report, MoviePass’ parent company - Helios and Matheson Analytics — stated that they had $2.8 cash on hand and $13.1 million on deposit with their merchant and fulfillment processors as related to the MoviePass revenue. The company added that they netted $5.56 million in new financing from “certain institutional investors” after closing on March 25. The company’s net loss more than doubled in 2018.
The MoviePass service went on hiatus as of 5AM ET Thursday (July 4), explaining, “Once we have resolved these technical problems, the service will be live again. We estimate this process will take several weeks.”
Subscribers are not expected to be charged for the period of inactivity, credited with the number of days affected once the service resumes. In addition, the company will not be taking new subscribers until they are back up and running.
The company’s CEO, Mitch Lowe, said in a statement, “There’s never a good time to have to do this, but to complete the improved version of our app, one that we believe will provide a much better experience for our subscribers, it has to be done.”
According to Variety, the company’s subscriber plunge coincided with MoviePass’ change in operation from offering a one-movie-a-day plan at $9.95 to a three-movie-a-month plan at the same price. Earlier this year, they offered an “unlimited” plan for $14.95 a month that offered the one-movie-a-day option, but warning of a restricted basis due to “system-wide capacity.”
Helios and Matheson are being targeted in a securities fraud probe by New York’s Attorney General and there is a class action lawsuit by subscribers over the change in plans, citing a deceptive “bait and switch” tactic.