MoviePass has launched a “peak pricing” surcharge for the most popular titles at the most popular showtimes.
The service, which had warned subscribers in late June that peak pricing was coming, began including the surcharge on some of its showtimes on Thursday. It said such showings would be marked with a red lightning bolt icon and would cost between $2 and $6.
“Peak Pricing goes into effect when there’s high demand for a movie or showtime,” MoviePass told subscribers. “You may be asked to pay a small additional fee depending on the level of demand. You can avoid the surcharge by selecting a different showtime or movie. Over the coming weeks we’ll also be introducing Peak Pass, which will allow you to waive one peak fee per month.”
The service also said, “Note: the actual Peak Pricing surcharge will vary based on showtime and movie title.”
Ad additional statement issued later Thursday said, “Today, we began rolling out Peak Pricing in select markets with the intention of keeping our subscription service attractive while offsetting the high costs associated with heavy demand of certain films or showtimes. We are still in a testing period with this feature, and to start, members can expect a surcharge fee of anywhere between $2 and $6 dollars, depending on demand of the showtime in question.”
“Peak Pricing will roll out to all subscribers over the next few weeks; however, members on an annual or quarterly plan won’t experience the Peak Pricing feature until their membership renewal date,” it added. “In the coming weeks, we’ll also be introducing Peak Pass, which allows members to waive one peak fee per month.”
MoviePass has more than 3 million subscribers and allows customers the chance to see a movie a day for a monthly fee of $9.99. But Wall Street has been losing faith in whether MoviePass can survive by selling data about its customers and striking marketing partnerships. The issue took a major hit after a May 8 filing with the Securities and Exchange Commission that revealed it had $15.5 million in available cash at the end of April, plus $27.9 million on deposit with merchants while monthly expenses totaled $21.7 million.
The company, owned by Helios and Matheson Analytics, recently launched a $164 million bond sale, announcing that it had reached an agreement with institutional investors to issue convertible notes for that amount, as well as 20,500 shares of preferred stock.
Stock of Helios and Matheson was off 2 cents to 19 cents a share on Thursday to close at another all-time low. The issue has continued to decline in recent days in the wake of AMC’s launch last week of a discount pricing program allowing customers to see three movies a week for a $19.95 monthly fee.
In a SEC filing Thursday, Helios and Matheson said a special meeting of shareholders will be held July 23 at the Empire State Building in New York City to increase the number of the company’s authorized common stock from 500 million to 5 billion and approve a one-time reverse stock split.