MoviePass abandons price hike, caps films at 3 a month
New York – MoviePass, a discount service for movie tickets at theaters, is walking back a planned 50 percent price increase following a subscriber backlash. But the cash-starved company will soon impose a cap of three movies per month, instead of one every day.
The company says the new plan will include “many major studio first-run films,” though there will be exceptions the company didn’t specify. In doing so, MoviePass is rescinding a recent cost-cutting move of barring viewings of most major releases during the first two weeks.
MoviePass has shown that many moviegoers will make time to hit theaters when movies are affordable, despite more convenient options such as Netflix and video on demand. U.S. movie ticket sales are up 8 percent so far this year, according to comScore. MoviePass claims credit for some of that.
MoviePass has grown to 3 million subscribers, from about 20,000, since it slashed monthly rates nearly a year ago to $10, from as high as $50.
But that success has proven costly. Because MoviePass typically pays theaters the full cost of tickets – $15 or more in big cities – a single movie can put the service in the red. Its parent company recently had to take out a $5 million emergency loan to pay its payment processors after missed payments resulted in service outages.
MoviePass has made many haphazard changes in recent weeks to reduce costs, including blocking most or all evening screenings, regardless of when the movie came out. That has led to complaints from subscribers, some of whom have threatened to leave for a rival plan from the AMC theater chain.
Though MoviePass says it’s not raising monthly prices to $15, there’s still a hidden price increase. The company already has a three-movie plan for $8 a month. Now, it will be $10.
MoviePass is also rescinding other cost-cutting measures, including surcharges for popular movies and show times and requirements to send photographs of ticket stubs to combat fraud.
MoviePass says the new cap will affect only about 15 percent of subscribers – those who now watch four or more movies a month.
The new caps take effect Aug. 15, though those with annual subscriptions won’t be affected until their renewal date.
The stock price of MoviePass’ parent company, Helios and Matheson Analytics Inc., increased 19 percent to close Monday at 8 cents, though it’s still down from nearly $50 a month ago, adjusted for a reverse stock split.