MoviePass Parent To Create Spinoff 'MoviePass Entertainment'

In an attempt to save MoviePass, its parent company- Helios & Matheson Analytics - announced a plan to spin off the division as a separate entity called MoviePass Entertainment Holdings.

The proposed MoviePass Entertainment Holdings would include: the shares of common stock of MoviePass Inc. held by HMNY, which currently owns 92% of the outstanding shares; the membership interests of MoviePass Films, HMNY's movie production company partnered with Emmett Furla Oasis Films; the membership interests of MoviePass Ventures, which was established to acquire completed films; Moviefone, which HMNY bought from Verizon's Oath earlier this year.

"Since we acquired control of MoviePass in December 2017, HMNY largely has become synonymous with MoviePass in the public's eye, leading us to believe that our shareholders and the market perception of HMNY might benefit from separating our movie-related assets from the rest of our company," Ted Farnsworth, chairman and CEO of HMNY, said in a prepared statement.

Earlier this year, MoviePass announced that it held 2 million subscribers for its service letting customers see one movie per day for just $9.95 per month. But it was too good to be true: The huge number of users caused a huge cash drain on HMNY and the company was forced to take out several loans. To stay afloat, MoviePass enormously changed its offer in August to limit customers to only three movies per month for the same price and limited access to wide-release movies during peak demand.

Read the original story on Variety.