MoviePass parent company Helios and Matheson has announced a preliminary plan to spin off the struggling movie subscription service into its own company.
“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,” Helios and Matheson CEO Ted Farnsworth said in a press release.
Helios and Matheson doesn’t want to just be known as “Moviepass’ parent company”
The plan would create a new holding company called MoviePass Entertainment Holdings, which would contain shares of MoviePass, MoviePass Films (the company’s film production arm), MoviePass Ventures (which looks to co-acquire and distribute completed films), and Moviefone, which still exists.
To say MoviePass has been struggling lately would be an understatement, and it’s easy to see why Helios and Matheson would want to spin it off into its own company to distance MoviePass from its brand. Earlier this year, MoviePass temporarily went down because it ran out of money, and its most recent quarterly earnings from August show that Helios and Matheson has been burning through cash trying to keep the service afloat. And the company has only been able to do this by constantly changing rules of its service to limit films and deter subscribers from, well, actually seeing movies.
Last week, news broke that Helios and Matheson was under investigation by the New York attorney general’s office over fraud concerns, which allege that the company misled investors.