MoviePass Ran Out Of Money, Couldn't Afford To Buy Tickets For Its Users
The movie theater ticket app MoviePass suffered an outage Thursday when its parent company couldn’t afford to pay for its customers’ tickets, CNN reported.
That parent company, Helios and Matheson Analytics Inc., never paid the contractors who process their customers’ payments, so the contractors stopped processing them, leaving MoviePass customers unable to purchase tickets. The company was forced to borrow $5 million to pay the Company’s merchant and fulfillment processors,” according to a filing with the Securities and Exchange Commission.
With MoviePass, customers pay a flat $9.95 monthly subscription fee for the ability to see one movie a day, every day. The business model leaves many wondering how this could possibly be profitable. The company’s own auditor isn’t sure that it is possible with the current model.
“MoviePass currently spends more to retain a subscriber than the revenue derived from that subscriber, and [other] MoviePass sources of revenue are currently inadequate to offset or exceed the costs of subscriber retention,” said the auditor in a Helios and Matheson company report released in April.
As of Friday, MoviePass services were back up and running. For now.
We are happy to report we have resolved the issues with card check-ins and our service has been restored. Please note some showtimes will not be available for check-in.
We thank you for your patience. You may read below for more information:https://t.co/2hpb6JXtpa— MoviePass (@MoviePass) July 27, 2018
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This article originally appeared on HuffPost.
