Another day, another subscription plan from MoviePass.
The struggling ticket-buyer said Monday that it will not raise its prices to $14.95 in the wake of customer dissatisfaction. The monthly subscription price will remain $9.95, but MoviePass is imposing new restrictions. Beginning on Aug. 15, MoviePass customers will be able to see up to three movies a month, a drop off from the movie-a-day that the service once offered users. The company said it will also give subscribers up to a $5 discount for any additional movie tickets they buy.
“Because only 15 percent of MoviePass members see four or more movies a month, we expect that the new subscription model will have no impact whatsoever on over 85 percent of our subscribers,” MoviePass said in a press release.
MoviePass has been running on fumes in recent weeks. The company is short on cash and its stock is languishing at less than a dime a share. Moreover, it’s now facing increased competition from theater chains such as AMC, which has gotten into the subscription game with A-list, a service that gives customers access to three movies a week for $19.95. In recent weeks, MoviePass has had widespread service outages and was forced to borrow an emergency $6.2 million to meet its financial obligations. It paid the loan back in full in a matter of days.
MoviePass has had a tumultuous year. The service attracted some three million customers after it unveiled its low-price, movie-a-day offering some twelve months ago. However, it has been dogged by questions about its business model. MoviePass pays full price for many of the tickets it buys from theater chains, meaning it effectively subsidizes its customers’ movie-going. It has long claimed it can make money by exploiting its users’ data and selling advertising.
“We are well aware that during our journey to innovate moviegoing — a form of entertainment that over time has become unaffordable and broken — we’ve encountered many challenges. However, any industry-wide disruption like MoviePass requires a tremendous amount of testing, pivoting, and learning,“ MoviePass CEO Mitch Lowe said in a statement. “We discovered over several months of research that our customers value a low monthly price above nearly everything else, so we came together to create a plan that delivers what most of our loyal MoviePass fans want, and one that, we believe, will also help to stabilize our business model.
Annual subscribers will not be affected by the new plan until their renewal dates, MoviePass said. Subscribers can still cancel the service at any time. Last week, MoviePass said it would not allow customers to see major blockbusters in the first two weeks of their release. It’s unclear if that rule will still be in effect as MoviePass says its new plan will “include many major studio first run films.”
The new plan seemed to meet Wall Street’s approval. Shares of Helios & Matheson, the data firm that owns MoviePass, were up 28% in early morning trading at 9 cents a share.