It seems that MoviePass may come back from the dead after co-founder Stacy Spikes bought it out of bankruptcy on November 10 for less than $250,000. His bid to buy the long-dead MoviePass was approved by a Southern District of New York bankruptcy court judge two days prior.
There's an old saying that goes that you always build back better the second time around, but can MoviePass ever be financially viable? Is the sequel the charm? Let's explore the odds that Spikes faces.
Why Did MoviePass Go Bankrupt?
MoviePass is a movie theater subscription company originally founded by entrepreneurs Stacy Spikes and Hamet Watt in 2011. Originally, you paid a monthly subscription fee that you could redeem for discounted theater vouchers. This later became a prepaid payment card.
When it was acquired in 2017, the new owners made radical changes. The service dropped to $9.95 a month, which allowed you to see one movie every day. For most people, that essentially amounted to unlimited movies. This spectacular move saw the number of subscribers leap from 20,000 to one million in just four months.
Unfortunately, though lowering the costs brought on board millions of subscribers, MoviePass lost money on every ticket. Initially, management didn't mind, assuming it would leverage their massive subscription base to generate alternative revenue streams.
However, whether it was attempting to mine customer data to advertise products to them, or arm-twisting movie theaters to give them a cut of ticket sales, its efforts failed spectacularly at every turn. In 2019, it filed for bankruptcy.
Can MoviePass Build Back Better?
Stacy Spikes is facing a tough operating environment. First, he has to get access to MoviePass' code, customer data, and email addresses in order to relaunch the app. His opening move has been to redesign the MoviePass logo and set up a new website; the only purpose of which seems to be harvesting email addresses of prospective future customers.
But even if Spikes does get the company's assets back, the COVID-19 pandemic has decreased movie going. Audiences are used to viewing blockbuster movies at home on streaming services such as Netflix and Amazon Prime. It remains to be seen whether movie buffs will return to theaters in numbers that generate enough demand for the return of MoviePass.
There is also the fact that the very movie theaters MoviePass would need to partner with now have their own subscription services. For example, AMC theaters have a subscription service called Stubs A-List, which lets you see up to three movies a week for one monthly cost of $19.95 a month in any format, including IMAX and Dolby Cinema. Although AMC used to work with MoviePass in the past, it probably doesn't need to now.
Finally, there's the issue of price. Last time around, MoviePass' rock bottom prices had been funded by investor money. Not so this time. Spikes simply doesn't have the cash. Besides, Spikes wouldn't pursue such a strategy anyway because he opposed it the last time MoviePass tried it, leading to his dismissal from his own company by its investors.
The Road Ahead Is Grim for MoviePass
Everyone loves to root for the underdog, and Stacy Spikes is definitely an admirable underdog. The MoviePass story, from humble beginnings to spectacular rise and fall, and the heroic return of its original founder to save it, would make for great Hollywood drama. Indeed, none other than Mark Wahlberg himself is currently producing a documentary on this very subject.
However, real life doesn't always imitate the movies. Stacy Spikes is in for a hard and bumpy road that may end in tears. Does he have the touch necessary to revive the corpse of MoviePass? It remains to be seen whether he can pull it off.