At the beginning of 2018, Brian Kinstlinger, an analyst for the investment bank Maxim Group LLC., made a prediction.

Six months earlier, executives at Moviepass Inc. sold a majority stake (estimated just shy of 66%) in their rising company to Helios and Matheson Analytics Inc. (one of those big, vague data companies like “Cambridge Analytica” that sounds just uninteresting enough to arouse suspicion), for an undisclosed sum. As part of the deal, they overhauled their business model, slashing the price of their subscription service 80%. In that week alone, the company’s reputation spread by orders of magnitude, and their customer base shot up from the thousands to the millions. By 2018 nearly 2 million Americans had Moviepass, and the company accounted for 3-10% of any given movie’s U.S. ticket sales. By all accounts, the trend was only going up. So Kinstlinger made a prediction. This company was on the rise: buy Helios and Matheson, get in on Moviepass.

As part of his prediction, Kinstlinger added a sort of disclaimer: if there was anything to worry about with Moviepass, it’s their access capital, their rainy day fund. “We estimate this offering gives MoviePass an estimated seven months of cash to finance over usage by members.”

I’m writing this article almost seven months to the day, from when Kinstlinger published his predictions. Helios and Matheson is plummeting on the stock market, down from $14 last week to below $1 per share today. If I open the Moviepass app on my phone right now, it won’t work.

Why?

Because they’re broke. On July 26th–one week short of Kinstlinger’s timeline–the company ran out of money. Citing “technical issues” (read: technically we’re broke), the company took down their service and there’s no guarantee it’ll ever fully come back.

If that’s the case, let this article be an elegy to America’s most backwards, cost-effective, convoluted, terrible, great company.

Moviepass, Inc. was founded by a former Netflix executive and president of Redbox, Mitch Lowe–a Tim Allen-looking guy with a “barbecue dad” vibe. Lowe, more than anyone, represents the essence of the Moviepass brand: he’s brash, act-first-think-second, smiley and reckless. He has compared his company to “riding a wild bronco”, and in that regard he is right on the nose. Lowe began Moviepass in 2011, but it didn’t really become Moviepass until the corporate buy-in six years later. Prior to then, it was a niche service geared towards cinephiles, with subscription plans ranging from $15-50 a month.

The product is simple: a subscription service for movie theaters (much in the way Netflix is to on-demand). You can use your Moviepass-issued debit card to see one movie a day, for no additional charge. You can’t see the same movie more than once, nor 3-D or special event showings, but other than that, you’re free to see 0-31 movies every month at no extra expense to you. Moviepass pays the proper authorities on your behalf.

Whereas the service is quite simple, anyone learning about Moviepass for the first time will find the mathematics of their business model quite head-scratching. As of last summer, Moviepass is just $10 a month (for a short stint around the holidays last winter, it even dropped to $7 a month!), but in major cities, a standard movie ticket can run you upwards of $16. You see the problem, then? When Moviepass was $50 a month, you’d have had to see at least a few movies every month to make your subscription worthwhile. Today, even just one visit to the movies every month and a half will mean you’re more than cutting even.

In practice, the numbers get outright ridiculous. For example, personally, in just seven months since I first got a card, I’ve paid Moviepass $70. I’ve seen 49 movies in that time span (I can tell, because of a helpful “History” feature in the app). Factoring in the average price of a ticket in my area, Moviepass Inc. has lost just shy of $800 on me alone in this past half-year. Perhaps not everybody sees as many movies as I do. But you can imagine why that wouldn’t necessarily make up the difference.

Naturally, this raises the question of how Moviepass makes money. The short answer is: they don’t. But they try, in some diverse and strange ways. The most powerful tool in their arsenal is their ability to advertise movies. According to the company’s internal data (which you can believe or not, depending on how trustworthy you find Mitch Lowe’s face), Moviepass accounts for 3% of domestic box office sales regularly, but up to 10% for movies it advertises. You’d need some Bayesian math to figure out exactly how much that tick up amounts to, but suffice to say, Moviepass–because it reaches so many of America’s most enthusiastic moviegoers–has power to influence industry viewing habits.

By dropping their price to $10 a month, however, the company needed new sources of revenue. Being that they were bought out by a data analytics firm, it’s safe to assume data harvesting became a big chunk of what Moviepass exists for. A company like Helios and Matheson can take a financial hit from customers if they can turn around and sell those same customers’ data, much in the way social media companies are known to do. In March of this year, Lowe formally admitted to the practice; actually, he boasted about it. In a keynote speech titled “Data is the New Oil: How will Moviepass Monetize It?”, at the Entertainment Finance Forum in Hollywood, Lowe said this:

“We get an enormous amount of information. Since we mail you the card, we know your home address, of course, we know the makeup of that household, the kids, the age groups, the income. It’s all based on where you live. It’s not that we ask that. You can extrapolate that. Then because you are being tracked in your GPS by the phone, our patent basically turns on and off our payment system by hooking that card to the device ID on your phone, so we watch how you drive from home to the movies. We watch where you go afterwards, and so we know the movies you watch. We know all about you. We don’t sell that data. What we do is we use that data to market film.”

The statement reads Orwellian, but what’s shocking is less the reality of the model than Lowe’s brashness in admitting to it. Plenty of companies freely trade similar data of yours, and just don’t like talking about it. For Moviepass, owned by a big data firm, whose primary objective is to advertise movies, it’s a powerful tool. It doesn’t explain why the app sent me a notification to see “Gotti” a couple weeks back–a movie I wouldn’t see if you Clockwork Orange’d me to the front row–but you can imagine the promise of such information, if used correctly. And it’s not even exclusive to the movie industry: if Mitch Lowe really does know everything about you, that’s worth something to just about anyone anywhere trying to sell you anything.

So, to sum it up, we have a company losing money every time a customer buys what they’re being sold, using everything they can about that customer’s life to somehow make up those losses. It’s just a circus of business school no-nos. The question, at this point, is who wins in this scenario? Clearly, the customer, unless that data is being used in nefarious ways that offset those individual net gains. The movie industry on the whole wins with Moviepass: studios get paid the same for a regular ticket and a Moviepass ticket, and just as Netflix increases the content people watch at home, Moviepass has encouraged more people to go out to theaters more often than they had beforehand. Small movie theaters win when more people are coming and buying concessions. Big theater companies– AMC and Regal–lose, because Moviepass far surpasses the benefits of their own rewards programs.

It certainly doesn’t seem like Moviepass itself is winning here. The more popular they’ve become, the more customers they get–markers, in any other organization, of great success–the closer they get to actually shutting their doors and emptying their desks. In the background, Helios and Matheson are on life support. And in a truly Mortal Kombat-level finishing move, AMC, just a few days prior to Moviepass’ embarrassing fallout, announced their own subscription plan: 3 movies a week for $19.95 a month.

When Moviepass does officially croak (unless, God willing, some even larger dark money group comes and swoops it up), it will mark the end of one of planet Earth’s very few services for which you can make over a thousand dollars worth of ROI per year. It’ll be sad but, just like any other good Hollywood thriller, it’ll have to come to an end far earlier than we would’ve hoped. For my money (specifically, $70 of it), this movie was as fun as any Bond iteration, as confusing and off-putting as any DC superhero flick, as wild as any Mission: Impossible.

Nate Nelsonis an NYC-based writer and podcast host.

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