New studio releases have been restored to the new pricing plan as Wall Street bets the Struggling movie service is running on fumes. The company is trying to burn less cash so it can stay in business.
Making the business headlines over the weekend, is MoviePass, the struggling movie subscription service, who have announced it will limit customers to three movies per month. The new pricing plain, has changed yet again, this time down to $9.95 per-month, while limiting subscribers to three movies a month. The new plan takes effect August 15. MoviePass says 85% of its customers already see no more than three per month.
“Beginning August 15, 2018, MoviePass subscribers will transition to the new plan upon their renewal, which gives subscribers up to three movies a month for $9.95, and up to a $5.00 discount for any additional movie tickets,” Helios and Matheson Analytics, the parent company of the struggling movie subscription and ticketing service, said in a statement.
The new pricing model for MoviePass follows a cash crunch for Helios and Matheson and a plunge in its share price, a steep fall for MoviePass after it launched a year ago by offering as many as 30 tickets a month to the local cinema for the price of one. Despite the cratering share price and Wall Street concluding MoviePass is running on fumes and not expected to survive, Helios and Matheson with its new plan restored major studio first run films and suspended peak pricing and ticket verification after a series of subscriber complaints.
“We have heard our MoviePass community and we will not be raising prices to $14.95 a month,” the MoviePass parent said after unveiling the price hike last week. The new plan is aimed at moviegoers who typically see three movies or fewer a month.
“Additionally, the new plan addresses past misuses which imposed undue costs on the system, including ticket scalping, unauthorized card usage and other activities, which in the past necessitated the use of certain remedial measures that have sometimes been inconvenient for our subscribers,” the statement from Helios and Matheson said.
As part of its new model, MoviePass is doing away with a bunch of other changes, too.
The company will suspend surge pricing, which sometimes added as much as $8 to the cost of an individual ticket. And it will no longer enforce ticket verification, which required users to take a picture of their ticket stub and submit it to the company as a way to stop abuse of the service.
The new plan will also include “many major studio first-run films,” according to the company. That reverses a change announced last week that would have cut access to blockbusters within the first two weeks of release.
MoviePass CEO Mitch Lowe described the changes in an interview with The Wall Street Journal.
“I should have accelerated the process of reducing the burn faster in hindsight,” he told the newspaper. “Now I realize no matter how patient investors say they will be, they never are.”
The stock gained 2 cents on Monday after the new plan was announced.
Two weeks ago, the company also borrowed $5 million in cash to pay its merchant and fulfillment processors after it had a service outage and couldn’t afford to pay for movie tickets. It later said it paid back that loan.
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