Movie theater stocks have been rebounding in the last year with recent months hitting post-COVID-19 pandemic box office records. Could the return of a subscription service that helped bring more people to movie theaters provide more upside for movie stocks?

What Happened: Stacy Spikes, the co-founder of MoviePass, is bringing the company back in a relaunch that could be a big event for the movie theater market.

A bankruptcy court judge approved Spikes’ bid, according to Business Insider. The bid amount was not disclosed publicly.

“I can confirm that we acquired MoviePass out of bankruptcy on Wednesday,” Spikes told Business Insider. “We are thrilled to have it back and are exploring the possibility of relaunching soon.”

The news follows a report by CinemaBlend from earlier this year that MoviePass could rise from the dead. MoviePass plans to relaunch a movie ticket subscription service next year.

“We believe, if done properly, the theatrical subscription can play an instrumental role in lifting moviegoing attendance to new heights.”

MoviePass was part of a bankruptcy auction from parent company Helios and Matheson in June 2020. No bids were placed at the time of the original auction with the minimum bid set at $250,000. Helios and Matheson valued the company between $1 million and $10 million at the time.

Spikes confirmed his bid was below the $250,000 amount. The bid did not include customer data or email addresses from the original MoviePass.

A website has been created at iwantmoviepass.com, where users can sign up to be notified when the service launches.

Related Link: Too Good To Be True: The Rise And Fall Of MoviePass

Why It’s Important: MoviePass became a trending topic in the movie and stock world for many years by offering a subscription service that could disrupt the movie theatre business.

The company provided subscribers unlimited movie trips for $40 a month. The offering was not profitable and the company bled through money before being bought out by Helios and Matheson.

A transition under Helios and Matheson saw the company launch a $10 monthly plan offering one movie theater trip per day. Subscriptions jumped from 20,000 to 100,000 in two days on the new plan. The company had more than three million subscribers within a year.

Spikes was fired from MoviePass in 2018 by Helios and Matheson executives. Spikes said he raised concerns about the $10 price point.

While MoviePass ultimately failed the first time around, it led to changes in the movie theater industry. AMC Entertainment Holdings Inc (NYSE:AMC) and Cinemark Holdings, Inc. (NYSE:CNK) have since launched their own membership programs that offer a limited number of monthly visits.

The business model created by MoviePass transformed the movie theater industry and helped bring in additional revenue, particularly for weekday and non-blockbuster movies. MoviePass paid the full ticket price to the movie theater operators, generating full margins for operators and an increase in concession revenue along the way.

The rebirth of MoviePass could be a positive and a negative for movie theater stocks. The launch could lead to an increase in attendance and increased revenue for operators. People may choose to end their monthly subscription with movie theater companies with MoviePass providing a potentially lower monthly cost and allowing more options.

Another stock to watch will be IMAX Corp (NYSE:IMAX). MoviePass offered upgraded pricing to include free IMAX movies. If this is part of the relaunched offering, it could help boost box office revenue for the premium screen format company.

Image by anncapictures from Pixabay