At this point, it's hardly a surprise to hear that MoviePass, a service which allows users to see a film per day at the theater for only $9.95 a month, has been struggling financially. Things are starting to look so bad, though, that parent company Helios and Matheson plans to raise $1.2 billion to keep the subscription service running.
As The Wrap reports, Helios said that stock, debt, warrants, units, and subscription rights might be offered "from time to time in amounts, at prices and on other terms to be determined at the time of the offering." During a filing with the SEC (Securities and Exchange Commission), they explained they intend to use the proceeds "for general corporate purposes of Helios and its subsidiaries and/or to support MoviePass and MoviePass Ventures operations."
A report earlier this year pointed out how MoviePass was losing more money than it was making, which means that Helios and Matheson, who own 91.8% of MoviePass, seem to be feeling the pressure. Only last month, the majority owners announced they were planning to raise $164 million through bond issuance, hoping to keep the business afloat and combat their own stock price from continuing to fall.
With over three million MoviePass users, the $9.95 monthly fee, which is even cheaper if paid annually, has proved very costly to investors despite immense growth. Competition for the service is already beginning to pose a serious threat, too, with AMC theaters announcing their own similar service titled AMC Stubs A-List. At $20 a month for three movies per week at AMC theaters, it's perhaps not quite as tempting a deal for consumers, but there's a far higher chance it'll still be around next year than MoviePass.