MoviePass was a fever dream. For a few glorious months in 2017 and 2018, you could walk into almost any theater in America, flash a small red card, and see a movie for the price of a cheap burrito. It felt like a heist. Honestly, it kind of was. At its peak, the service had over three million subscribers all burning through venture capital cash like it was kindling. Then, the screen went black.
People still ask what happened to MoviePass because the collapse was so spectacular and so public. It wasn't just a business failure; it was a chaotic, meme-filled soap opera that involved surge pricing, changing terms of service every three days, and a literal blackout where the company ran out of money and couldn't pay its bills.
The story is a mess of ego, bad math, and a fundamental misunderstanding of how much Americans love "free" stuff.
The $9.99 Gamble That Broke the Internet
In August 2017, MoviePass made a choice that changed everything. They dropped their subscription price to $9.99 a month for a movie every single day. Before that, it was a niche service costing upwards of $50 in some cities. Mitch Lowe, a former Netflix executive, and Ted Farnsworth, the CEO of Helios and Matheson Analytics (HMNY), were the architects. They weren't trying to make money on subscriptions. They wanted data.
They figured if they owned the customer's habit, they could sell that data to studios or take a cut of the popcorn sales. It was the "disruptor" playbook. But they forgot one thing: theaters hated them.
AMC Theatres, the biggest chain in the world, went to war almost immediately. They called the pricing model "unsustainable." They weren't wrong. If a user in New York City saw two movies a month, MoviePass was losing $20 on that single person. Multiply that by millions.
The math never worked. It was a race to see if they could get enough users to force theaters to play ball before the bank account hit zero. Spoiler: the bank account hit zero first.
Why MoviePass Actually Died (The First Time)
By 2018, the "MoviePass" brand became synonymous with "technical glitch."
The company started doing desperate things to stay alive. First, they blocked big blockbusters like Mission: Impossible – Fallout. Then they introduced "Peak Pricing," which added extra fees for popular movies. Users would open the app to see a $6 surcharge on a $10 subscription. It felt like a betrayal.
Then came the infamous night of July 26, 2018.
The app just stopped working. The company had literally run out of cash to pay the ticket processors. Helios and Matheson had to take out an emergency $5 million loan just to get the lights back on. It was the beginning of the end. They tried shifting to a model where you could only see three movies a month. They tried limiting the selection to a handful of weird indie films.
Nothing worked. By September 2019, the service officially shut down. HMNY eventually filed for Chapter 7 bankruptcy. It looked like the red card was dead forever.
The SEC and Legal Fallout
It wasn't just bad business. It was potentially illegal.
In 2021, the FTC reached a settlement with Lowe and Farnsworth over allegations that they purposely invalidated user passwords and used "trip wires" to prevent people from actually using the service they paid for. Basically, they were accused of making the app broken on purpose to save money.
The Department of Justice and the SEC also got involved. In 2022, Farnsworth and Lowe were indicted on charges of securities fraud. The government alleged they misled investors about how the company would ever actually become profitable. When you look at the documents, it’s clear the "data play" was mostly smoke and mirrors.
The Surprising Return of the Red Card
Here is the part most people missed: MoviePass is actually back.
Stacy Spikes, one of the original co-founders who was pushed out before the $9.99 craze, bought the company’s assets out of bankruptcy. He wanted to do it "the right way" this time. No more unlimited movies for the price of a sandwich.
The new MoviePass uses a credit system. You pay a monthly fee, get a certain number of credits, and use them depending on the time of day and the popularity of the movie. It’s a sustainable, boring, functional business model. It lacks the "world-burning" energy of the 2018 era, but it actually pays its bills.
What the Industry Learned
The legacy of the original collapse is everywhere.
- AMC Stubs A-List: AMC realized people wanted a subscription, so they built their own. Since they own the popcorn and the seats, the math actually works for them.
- Regal Unlimited: Same thing. The chains took the MoviePass idea and cut out the middleman.
- The Death of the "Data" Myth: We learned that "data" isn't a magic wand. Knowing someone likes Marvel movies isn't worth $30 a month in losses.
How to Navigate Movie Subscriptions Today
If you’re looking to save money at the cinema in the post-MoviePass world, you have to be more strategic than just carrying one red card.
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First, check your local theater loyalty programs. If you have a specific theater you visit 90% of the time, their in-house sub is almost always the better deal. AMC Stubs A-List is widely considered the gold standard because it includes IMAX and Dolby Cinema without extra fees.
Second, the new MoviePass is best for "the theater agnostic." If you like going to independent cinemas or small local chains that don’t have their own apps, the credit-based system works well. Just don't expect the "unlimited" glory days. Those are gone.
Actionable Steps for Moviegoers
- Audit your frequency. If you see more than two movies a month, a subscription is a no-brainer. If you see one, you're better off paying out of pocket and avoiding the monthly fee.
- Look for "Discount Tuesdays." Most major chains still offer $5 to $7 tickets on Tuesdays. This is often cheaper than any subscription "credit" value.
- Check the "Fine Print" on credits. If you use the new MoviePass, remember that credits usually roll over, but only up to a certain point. Don't let them expire.
- Download the theater apps directly. Even if you don't subscribe, the free tiers of theater loyalty programs (like Cinemark Movie Rewards) usually waive online booking fees, which can save you $2 per ticket.
The original MoviePass was a beautiful, chaotic disaster that proved people still love going to the movies—they just don't want to pay $20 to do it. It forced a stagnant industry to modernize. While the original company died under the weight of its own impossible promises, the way we watch movies was changed forever by that little red card.