Why is MoviePass down? It temporarily ran out of money

Getting into movies was an unexpected Mission Impossible for MoviePass subscribers on Thursday, and continues for some.

Lori Grunin Senior Editor / Advice
I've been reviewing hardware and software, devising testing methodology and handed out buying advice for what seems like forever; I'm currently absorbed by computers and gaming hardware, but previously spent many years concentrating on cameras. I've also volunteered with a cat rescue for over 15 years doing adoptions, designing marketing materials, managing volunteers and, of course, photographing cats.
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Lori Grunin
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Some people are still having problems getting into movies; this is from Friday afternoon ET. You can get through the check-in process, but are then greeted with a "sorry, technical issues" message.

Screenshot by Alexandra Able/CNET

Popular movie-ticket subscription service MoviePass experienced an outage on Thursday, still ongoing for some, which the company attributed to "technical issues with our card-based check-in process," on its Twitter feed. 

But its SEC filing Thursday indicated that the problem was really cash flow -- the company ran out of money and couldn't pay for tickets.

The filing by its parent company, Helios and Matheson Analytics, explained an emergency loan the company had taken out:

The $5.0 million cash proceeds received from the Demand Note will be used by the Company to pay the Company's merchant and fulfillment processors. If the Company is unable to make required payments to its merchant and fulfillment processors, the merchant and fulfillment processors may cease processing payments for MoviePass, Inc. ("MoviePass"), which would cause a MoviePass service interruption. Such a service interruption occurred on July 26, 2018. Such service interruptions could have a material adverse effect on MoviePass' ability to retain its subscribers. 

There are two ways to get tickets with MoviePass: e-ticketing, which only works with a small number of theaters that are unlikely to get first-run blockbusters, and the more common process in which you find the theater and time in the app and then check in wirelessly when you're within 100 yards the theater. That's the way it works with the big-name chains, and it's that aspect of the system which experienced the outage. As a middleman between the theater and the ticket buyer, MoviePass has to shell out large lump sums, and those sums are especially lumpy for popular movies. This week's challenge: Mission: Impossible -- Fallout

The problem is exacerbated by excited moviegoers who didn't find out they couldn't check in until they were at the theatre, as well as the suggestion that "e-ticketing is working" -- but not for the movies in question. Angry subscribers filled up MoviePass' Twitter feed in response to the initial posting:

The company has been experiencing financial problems for a while, and it just instituted peak pricing for big movies which isn't going over well with customers either, especially since they can't even get in.

We reached out to Helios and Matheson Analytics for comment but did not immediately hear back.

Watch this: How the crazy $10-a-month MoviePass deal works