The MoviePass saga has been one for the record books. MoviePass went viral last summer. The program jumped to a million subscribers in just a few months. Unfortunately, the template will be a boon for AMC (NYSE:AMC) giving AMC stock has plenty of upside.

That sparked explosive gains in the stock price of parent company Helios and Matheson Analytics Inc (NASDAQ:HMNY).

But now, despite continued robust user growth, MoviePass has seemingly gone bust because the numbers just don’t make sense. HMNY stock has collapsed and competition is entering the fold.

At this point, it seems like the market has already dug a grave for MoviePass and its parent company HMNY. But what will be the catalyst which does make MoviePass a relic of the past?

AMC just launched its own MoviePass-type program, but at a price that makes much more sense.

That program, because it is financially viable and controlled by the same guys who operate movie theaters, may ultimately prove to be the nail in the coffin for MoviePass.

Here’s a deeper look.

MoviePass and AMC Stock

The story of how MoviePass got to where it is today is as entertaining as it is necessary to understand to see where MoviePass will go next.

Last summer, the monthly subscription movie attendance program went viral after prices were cut to $10 per month.

Go to the movies as many times as you want for only $10 per month? Seemed like a steal.

Everyone hopped on board. MoviePass jumped from 20,000 subs to 600,000 subs seemingly overnight, and hit a million subs by the end of the year.

Naturally, MoviePass parent company HMNY saw its stock price soar alongside supercharged MoviePass user growth. HMNY stock ran from $2.50 in September 2017 to nearly $40 by early October 2017.

But then the bubble popped.

MoviePass kept getting more and more subscribers. Today, the subscriber base stands north of 3 million, and management is projecting 5 million users by the end of the year.

But the dollars, which never added up in the first place (MoviePass essentially loses money if a member goes to the movie just once a month), started to erode near-term investor euphoria.

MoviePass has changed its pricing scheme multiple times over the past several months, but ultimately, nothing has changed the fact that the company is burning through cash at such a rapid rate that tomorrow is no sure thing.

As a result, HMNY stock now trades under $0.20, a far cry from the $40 this stock fetched in October of last year. Indeed, at these prices, it seems like the market is just counting down the days to the MoviePass apocalypse.

Why AMC Could Bring About Doomsday For MoviePass

The MoviePass apocalypse just became much more tangible with the launch of AMC’s new monthly subscription plan, called Stubs A-List, which allows consumers to see up to 3 movies per week for $20 per month.

Indeed, I think AMC Stubs A-List will result in huge MoviePass cancellations, and significantly hamper the company’s survival odds.

The best way to explain this is through my personal experience. I love going to the movies. So do my friends.

We were all MoviePass members, and consistently go to the movies about 2 to 3 times per month. But now, we are all cancelling our MoviePass memberships and hopping on the Stubs A-List program.

Why? MoviePass was great because it was cheap. But there was nothing else great about the platform. The actual purchasing of movie tickets was a somewhat clunky and complicated process that couldn’t be done in advance.

The number of restrictions was also starting to pile up, including not being able to watch anything but a basic 2D movie without any frills and not being able to go to certain theaters because they had ended their partnership with MoviePass.

In other words, everyone loved MoviePass because it was cheap, and that was about it.

But now, AMC’s movie subscription is also really cheap, offers still great value (who sees more than 3 movies a week?), allows advance ticket purchases online, includes all movies, and has zero AMC theater restrictions.

In other words, it is cheap, and a whole bunch more.

Ultimately, AMC’s Stubs A-List program will hurt MoviePass, mostly because MoviePass has no leverage in this situation.

Its only leverage is its 3 million subscriber base, but AMC’s monthly program will steal a bunch of those subs because, realistically, consumer don’t need to see more than 3 movies a month.

Also, they like the convenience of being able to buy tickets in advance and see any movie, without restrictions.

If I’m right here, and the MoviePass sub base does dwindle as a result of AMC’s Stubs A-List program, then the MoviePass apocalypse is close.

Bottom Line on MoviePass and AMC Stock

MoviePass was a genius idea. Taking the movie theater model, simplifying it, and making it a subscription model is the future.

But MoviePass overshot itself by thinking they could gain scale, and use that scale as leverage to negotiate ticket prices down with movie theater operators.

After all, movie theater operators own all the content, distribution, and venues, so they have most of the leverage.

Now, movie theater operators are adopting the subscription model at more sustainable price points, and that will ultimately erode any leverage MoviePass had in the first place.

Investment takeaway? Avoid HMNY. Buy AMC stock.

As of this writing, Luke Lango was long AMC.