MoviePass, the struggling movie theater subscription service owned by Helios & Matheson Analytics, saw its subscribers decline by a big rate during the third quarter.
The Wall Street Journal, citing a Securities and Exchange Commission filing made Thursday (November 15), reported MoviePass’ parent said in the filing that it saw a decline in subscribers, but didn’t provide a figure on how many. Due to the subscriptions decline, Helios recorded an impairment charge of $39 million against the goodwill of the MoviePass unit for the third quarter. According to the Wall Street Journal, the dip in subscribers came after MoviePass began limiting customers to viewing three movies per month for the $9.95 a month fee. It was much more limiting than what MoviePass was offering a year earlier when it launched, which was one movie per day.
Helios said in the filing that each subscriber on average saw 0.77 movies a month in September, which is lower than 0.85 in August and 2.23 in March. Helios lost $130 million, or 20 cents a share, for the third quarter, compared with a loss of $43 million, or $5.79 a share, in the year-earlier period. Revenue came in at $81 million, which was higher than $1.2 million in the third quarter of 2017, noted the Wall Street Journal. “Without raising additional capital, there is substantial doubt about the company’s ability to continue as a going concern through November 15, 2019,” Helios said in Thursday’s filing.
In late October Helios & Matheson announced the board had signed off on a preliminarily plan to spin off MoviePass. In a press release, Helios and Matheson said it is creating a new subsidiary called MoviePass Entertainment Holdings Inc. that would take ownership of the shares of MoviePass and other film-related assets held by Helios and Matheson. The new company would hold the shares of MoviePass common stock, the movie theater subscription service, membership interests of MoviePass Films and HMNY’s movie production company.