MoviePass Cancelled No More With Founder Stacy Spikes Revival Plans
By CultureBanx Team
- MoviePass founder Stacy Spikes acquirers the company’s assets for the less than $250K
- The U.S. movie theater sector is expected to hit $9.4B by the end of 2021
Two years after the collapse of MoviePass, the company's original co-founder Stacy Spikes has plans for a movie subscription revival. Spikes has been granted ownership of MoviePass assets by a New York City court, according to Insider. His bid for the company's assets was apparently less than $250,000, which is shocking considering Reuters reported the company had once taken in investments led by a former Netflix executive of $27 million. With subscription movie-going here to stay, is now the right time for Spikes to resurrect MoviePass in a sector expected to hit $9.4 billion by the end of the year?
Why This Matters: As theatergoing rebounds in a post-pandemic world, companies like Regal, AMC (AMC -0.77%), Alamo and other theaters that have since created similar services to MoviePass, stand to greatly benefit. Spikes said in 2019 that a failed deal with AMC, which went away when Adam Aron became the theater chain's CEO, doomed MoviePass for good.
"We are thrilled to have it back, and are exploring the possibility of relaunching soon," Spikes said in a statement.
Once heralded as a darling of innovation in the stagnated movie theater industry, MoviePass’s rise and fall is worthy of a big screen viewing. For a company that many people thought was too good to be true, with its unlimited movie $10 monthly pricing, they were right. In January 2018, Spikes was ousted from the organization.
When Spikes was still at the company he claimed they tested price points significantly higher than the $10 a month that Helios and Matheson wanted, with high success rates. “$19.99 was the lowest, and we did up to $49.99. We tested regional pricing. Markets are very different. There's an $8 market in Waco, Texas, and a $17 market in Manhattan, Spikes told Business Insider.” It’s possible that if MoviePass had stuck with the various pricing models during the “Spikes Era” of the business, the platform may not have had to shut down.
He always wanted to be methodical about testing price points, he told Business Insider “the lowest we ever got down to was $12.99 and as high as $75”. This was all before MoviePass parent company Helios and Matheson Analytics came into the picture. They wanted to temporarily drop the subscription price to $10 to expedite hitting 100,000 subscribers, which they did in 48 hours, but never removed the low pricing afterwards. A fall from the subscription movie mountain top quickly ensued, when the service saw its users base plummet from more than 3 million members to about 225,000 as of April 2019, according to Variety.
It seems like the writing was on the wall for the company’s implosion, as MoviePass had been running extremely low on funds. Helios and Matheson tried to avoid being delisted from the Nasdaq with a reverse stock split to keep share prices higher than $1. This was a failed attempt as they were delisted in February 2019, and have been trading over-the-counter ever since.
What’s Next: Some of the company’s assets include MoviePass, Moviefone and MoviePass Films. Spikes told Insider he hopes to relaunch MoviePass sometime next year. Will you be signing up?
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