MoviePass, the influential but money-losing cinema subscription service, is officially bankrupt.
The beleaguered firm, which rocketed to stardom with its offer of unlimited movie tickets for less than $10 a month, filed for Chapter 7 bankruptcy in U.S. Bankruptcy Court in New York this week, according to a Wednesday regulatory filing.
MoviePass, along with its New York parent company Helios and Matheson Analytics Inc. and another firm, Zone Technologies Inc., filed “after considering strategic alternatives,” Helios said in its filing with the Securities and Exchange Commission.
Helios listed assets valued at $396.5 million and total debts of $276.8 million.
New York-based MoviePass’ bankruptcy was long expected. MoviePass shut down its once-popular service in September after failing to raise much-needed capital to keep it afloat. At the time, Helios said it was exploring financial and strategic alternatives.
Hollywood has been predicting the eventual demise of MoviePass since 2017, when Helios and Matheson bought a majority stake in the firm and introduced the groundbreaking price of $9.95 a month to see as many as one movie a day in theaters. Previously, MoviePass had charged subscribers $30 to $50 a month.
Launched in 2011, the service quickly grew to 3 million subscribers from 20,000, sending Helios and Matheson’s stock soaring above $30 a share. But its business model of heavily discounted moviegoing proved unsustainable and the company scrambled to find ways to stop hemorrhaging money.
As the business continued to struggle, MoviePass’ stock lost almost all of its value. The downward spiral sparked shareholder lawsuits and an investigation by the New York attorney general’s office.
Meanwhile, theater chains including AMC, Alamo Drafthouse and Regal Entertainment have introduced their own versions of the cinema subscription concept, putting massive competitive pressure on MoviePass.
Helios said its four board members have tendered their resignations as a result of the filing. Helios and Matheson’s interim Chief Executive Parthasarathy Krishnan also resigned, as did interim Chief Financial Officer Robert Damon.