(Bloomberg) -- MoviePass, a startup trying to disrupt the theater business, has joined forces with Moviefone, a company founded nearly three decades ago to deliver film showtimes.
Helios and Matheson Analytics Inc., a majority owner of MoviePass, acquired Moviefone from Verizon Communications Inc., according to a statement Thursday. Verizon and its Oath unit, which was formerly AOL Inc., gained an ownership stake in MoviePass as part of the deal. The terms weren't disclosed. Oath will continue to sell Moviefone's digital advertising.
The deal could help accelerate the growth of MoviePass, which allows customers to watch one film a day in a theater for less than $10 a month. Started in 2011, MoviePass said in February it had more than 2 million subscribers. However, the company is burning cash quickly since more frequent viewing by subscribers leads to increasing losses. MoviePass has been warned by its accountants that its long-term viability is in question.
MoviePass plans to earn money by aggregating data on moviegoers' habits, advertising and merchandise sold through its platform, and by possibly gaining a share of refreshment sales at movie theaters.
Founded in 1989, Moviefone delivers movie show times and tickets, among other entertainment information. It's perhaps best remembered for an episode of “Seinfeld” when Cosmo Kramer takes phone calls pretending to be Moviefone's information hotline.
To contact the reporter on this story: Gerry Smith in New York at gsmith233@bloomberg.net.
To contact the editors responsible for this story: Crayton Harrison at tharrison5@bloomberg.net, Kevin Miller, Janet Paskin
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