MoviePass is now officially dead and can be buried. The movie ticket subscription service and its parent Helios and Matheson Analytics (OTC:HMNY) have both declared bankruptcy and will seek liquidation through a Chapter 7 filing rather than reorganization under Chapter 11. 

Having changed how the movie industry sold tickets, it was unable to find a sustainable model for its discounted service. But after it shuttered operations last fall, the bankruptcy filing indicates there is no chance MoviePass will be resurrected. 

That makes two movie ticket subscription businesses that have closed, and seemingly calls into question how long AMC Entertainment (NYSE:AMC), Cinemark (NYSE:CNK), and Cineworld's (OTC: CNWGY) Regal theaters can continue offering their own ticket subscription plans.

People crying at theater

It was a sad ending for the MoviePass story. Image source: Getty Images.

The mourning after

The benefit of the plans offered by AMC, Cinemark, and Regal is that unlike MoviePass or Sinemia (the other terminated subscription service), they are essentially paying themselves for the tickets sold. Because they're only selling tickets to their own theaters, they're not paying the full cost of the tickets. 

While they're also not making a full profit on a ticket, as they would if they had sold it through the box office, they're not in the same situation as MoviePass or Sinemia, which had to pay the full listed price and then sell it to the public at a discount.

Yet even though the theater operators are paying themselves, they're not all the same. Regal, for example, most closely resembles the defunct subscription services -- and could be the riskiest.

Ends of the spectrum

As the name implies, Regal Unlimited offers subscribers an opportunity to see an unlimited number of movies for a monthly fee beginning around $18. That's limited to just 200 theaters and only covers 2D films, so it does limit the costs.

But for $5.50 more, subscribers can visit all Regal theaters. That would appear to risk being a money loser for Cineworld after just a couple of movies, though it might make that up with concession stand sales, and there are surcharges that apply to see movies in Imax, 3D, and other different formats. It also may be counting on the average moviegoer seeing only a half-dozen or so films a year, but still renewing the subscription each month. 

Cinemark's Movie Club probably is the safest option in terms of profit. It offers just one 2D movie a month for $10, and members can roll over unused tickets. It also gives film buffs discounts on concession purchases.

Top of the list

That puts AMC Entertainment somewhere in the middle. It is the biggest service left standing after the demise of MoviePass and Sinemia. It had some 900,000 subscribers at the end of the third quarter, and it's a good bet it will have over 1 million when it reports full-year results on Feb. 27. 

AMC Stubs A-List lets subscribers see as many as three movies a week for anywhere from $20 to $24 a month depending upon where they live (which could be costly to AMC if members see 12 movies or so a month). But AMC believes the program is actually profitable.

The company says the average A-List member sees just 2.4 movies a month, and because a member typically brings along a guest who pays full freight for a ticket, adding in the money they spent on food and beverage makes it a profitable side business. It's how AMC Entertainment can continue thriving, even though theater attendance for the industry was down in 2019.

Streaming's rising toll

According to AMC, attendance at its U.S. theaters is on the rise, hitting 61.1 million patrons in the third quarter, up almost 4% from the year-ago period. While year-to-date attendance is down 1.3%, industry attendance fell 4.6% in 2019 to 1.24 billion, no doubt a victim of the continuing rise of streaming video.

Certainly AMC benefited from some blockbuster films in the third quarter, and we'll get to see whether it was able to carry that momentum into the fourth quarter with films like Star Wars: The Rise of Skywalker. But it seems the Stubs A-List service is helping to juice the figures well above the industry averages. 

As it turns out, movie ticket subscription programs can be profitable, but apparently only if they are being run by the theater operator itself. Buying a ticket at full price and selling it at a discount, as MoviePass and Sinemia did, should never have been seen as a viable business model. 

Not many people believed either of the two would last and make a good investment, but at least the eulogy at MoviePass' funeral can say it shook the foundations of the theater industry (even if it came crashing down on top of it).