After weeks of chaos that's left many customers without a means to access the one-price, almost unlimited moviegoing experience they signed up for, MoviePass has announced an overhaul to its pricing and attendance offerings that dramatically dials back the one-movie-per-day promise that lured so many people to the service in the first place. MoviePass pays full price for each ticket a subscriber uses, meaning that after a subscriber sees a second movie in a month, the company is operating at a loss. The company brought in Netflix co-founder Mitch Lowe to run the service, and he promptly lowered the monthly subscription rate and increased the number of movies users could see. The change to three movies per month takes effect August 15.
"One year and 3 million plus members later, it has become clear that a small number - only 15 percent - of the subscriber base has been stressing the system". At $9.95 per month, MoviePass is significantly cheaper than a single movie ticket.
The company also announced Monday that it will keep the monthly subscription price at $9.99.
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The change replaces a previously announced plan to raise prices to $14.95 a month. That reverses a change announced last week that would have cut access to blockbusters within the first two weeks of release. "Now I realize no matter how patient investors say they will be, they never are". In a Securities Exchange Commission filing in April, Helios and Matheson Analytics (HMNY), MoviePass's parent company, disclosed that it estimated its average cash deficit was over $20 million a month for the seven months through April.
MoviePass has grown to 3 million subscribers, from about 20,000, since it slashed monthly rates almost a year ago to $10, from as high as $50.
The stock gained 2 cents on Monday after the new plan was announced. The company has since paid back the loan, reported WSJ.