MoviePass, the $10-a-month movie subscription service that once dominated the industry, has been hit with financial issues that essentially brought an end to the company as we knew it. It dealt with those issues in-part by changing some users' passwords to keep them from ordering tickets, according to a Business Insider report this week.
MoviePass parent company Helios and Matheson didn't immediately respond to a request for comment.
Because MoviePass' business model essentially involved paying theaters the full price for customers' tickets, the company was quickly losing money, according to the report. CEO Mitch Lowe reportedly became frustrated with subscribers who took advantage of the low monthly rate by going to the movies every day, and ordered the company to limit subscriber access before the April 2018 release of Avengers: Infinity War. Lowe called for the passwords for a "small percentage of power users be changed," which would keep them from going into the MoviePass app and ordering tickets, according to Business Insider.
By the end of July 2018, the company was losing around $40 million a month, and on July 26 it ran out of money to put on MoviePass cards, Business Insider says. To get things running again, Helios and Matheson reportedly borrowed $5 million in cash. To deal with the loss of money, MoviePass reportedly made Mission: Impossible - Fallout unavailable for subscribers and froze half of them out on opening weekend, former employees told Business Insider.
MoviePass has been wrestling with financial obstacles in the last several months by curbing its offerings. Last year, it reduced its plan to three movies for $10 a month. The company brought back its $9.95 unlimited movie plan in March, albeit with restrictions, before suspending its service indefinitely last month.