For a glorious year, MoviePass offered virtually unlimited movie tickets—one per day in a standard movie format—to any movie, at almost any theater, for just $9.99 per month in the US. Unfortunately, the economic reality of a deal that seemed too good to be true has set in. It was, indeed, too good to be true.

In March, MoviePass started asking members to take pictures of their ticket stubs so it knew they weren’t giving away the tickets. Members were then barred from seeing titles more than once. MoviePass introduced surge pricing next. And the app later blocked access to blockbusters altogether. Now, the company is planning to raise prices. Customers are starting to look for the exit.

The movie-ticket subscription service had nearly everything going for it—an industry-altering concept, a CEO with ties to Hollywood and Silicon Valley, financial backing from its parent Helios and Matheson Analytics, and fiercely loyal customers who bought into its vision for cheap movies. But the underlying economics of MoviePass never made sense. Its members went to the theaters too often and MoviePass was charging too little to stay in business at its current pace. Its other revenue streams, like advertising and investing in films, weren’t growing quickly enough to close the gap.

On Thursday, the company issued a press release to show people it was “still standing” after Helios and Matheson shares plummeted about 92% to $0.14 this week. (That was after a 1-for-250 reverse stock split that adjusted the price from $0.09 to $21.25 on July 24.)

MoviePass existed long before its parent company became the apple of short-sellers’s eyes. Launched in 2011, by two entrepreneurs, Stacy Spikes and Hamet Watts, the company set out to bring Netflix’s all-you-can-watch model to movie theaters and revive moviegoing, which has declined over the last decade (pdf). The idea was to charge subscribers a flat monthly rate—$50 per month back then—and pay theaters for the tickets they used from the revenue it made on subscriptions and partnering with studios to promote titles within the app.

In 2016, former Netflix executive Mitch Lowe, who consulted for MoviePass briefly when it was starting out, was hired to replace Spikes as CEO. (Spikes became the co-chairman.) Soon after, Helios and Matheson, previously in the consulting and tech businesses, took a majority stake in the company. And, with backing from its new parent company, MoviePass slashed its price in August 2017 to $9.99 per month—a price subscribers of services like Netflix and Spotify were likely more used to paying. It was betting on the gym membership model, where infrequent theatergoers offset the heavy users. At $50 a month, the service was only attracting heavy users. But at around $10, the casual movie fan could be swayed. The problem was that they too started going to the movies more frequently.

MoviePass’s subscriber base shot to 3 million from 12,000 members in less than a year. To keep prices low, MoviePass aimed to cut deals with theater owners to get money back for the moviegoers it sent them and a part of their concession revenues. But the big theater chains had invested hundreds of millions of dollars upgrading their theaters with higher-end movie formats like IMAX and 4D, along with luxury experiences including reclining seats, lounges, and food and beverage services to lure audiences back to cinemas. They weren’t interested in working with a service that ostensibly cheapened their offerings. Why would people buy tickets to an 3D showing at full price when MoviePass was offering unlimited standard passes for roughly the same cost?

“At a point where everywhere in the industry globally, exhibitors are investing heavily on new premiums auditoriums, MoviePass comes in and offers this plan with the caveat that you can’t see movies that have a premium ticket price,” Daniel Loria, editorial director at, told Quartz. “That creates a question mark… For movie theaters, we spent all this money making movie theaters great, if we bring in subscriptions, it has to be in a sense that it can validate that investment.”

AMC Theatres was the most vocal in its disapproval. But a few smaller chains, like Landmark Theatres and Studio Movie Grill, partnered with MoviePass on things like online ticketing and in the ability to select seats within the MoviePass app.

Subscribers, meanwhile, were getting their money’s worth going to the movies about twice a month. The company expected members to go less often over time. It might’ve worked if summer movie season hadn’t swept in with a strong slate of movies like Avengers: Infinity War, The Incredibles 2, and Mission: Impossible—Fallout that members wanted to see. Helios and Matheson was paced to burn more than $45 million in July, up from an average of $27 million per month from October to June, because of the strong summer box office. MoviePass says it contributes 6% of box office receipts in the US, which total more than $7 billion so far this year.

Other revenue streams like advertising and partnering with studios to promote films within the app have grown, but not quickly enough. Helios and Matheson generated $1.4 million in revenue from MoviePass marketing and promotions last quarter, ending March 31, and another $47.2 million from subscriptions. But the combined segments still contributed a $98 million loss to Helios and Matheson’s bottom line that quarter. Helios and Matheson has also begun investing in and producing films like the critically acclaimed American Animals and the critcally panned Gotti through new subsidiaries, to get a chunk of the money studios are making from more people going to the movies. Those ventures started in earnest after the company’s last earnings report.

MoviePass’s money woes have started to show. The service went down temporarily last week after it missed payment to its merchant and fulfillment partners. Since service returned, users on social media have continued to complain of issues that prevent them from getting tickets, including screenings that appeared earlier in the day on the app disappearing in the evenings at most theaters.

MoviePass did not immediately return Quartz’s inquiry about what’s causing the continued service issues.

Meanwhile, new competitors like Sinemia and subscriptions from theater chains like AMC and Cinemark, perhaps inspired by MoviePass’s popularity, have snapped up customers who are frustrated or losing confidence in MoviePass.

Many MoviePass subscribers, however, have been unfailing to the end. They’ve put up with most of the radical changes to their service, technical troubles, and nearly non-existent customer service—all in the name of cheap movies. Whatever its flaws, 30 or so movie tickets a month for less than the cost of one at most theaters in the US was too good a deal to walk away from. And, most of all, the company was the first to truly try to change the economics of the movie industry to make moviegoing more affordable again.

Users on Twitter and Reddit are still applauding what MoviePass has tried to do. “In case tonight was my last MoviePass experience, I poured one out for them,” one user, posted on a subreddit dedicated to MoviePass on July 31, as widespread service issues thwarted other MoviePass customers from seeing movies across the country.

Others are finally fed up and cancelling their subscriptions.

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