To remain alive MoviePass has had to make dramatic changes. The service, which allows its subscribers to see one movie per day at the theater, has increased the price for its standard plan to $14.95 per month from $10. The change takes place in the next 30 days.
Some major releases are now going to be “limited in their availability” with the service during the first two weeks they appear in cinemas. It was not clear how “limited” the films would be to those using MoviePass. The company said that the blockbuster movies might be made available by the use of promotions.
Subscribers of MoviePass have reported restrictions of a similar nature already. For instance, the smash-hit Mission Impossible – Fallout opened across the country last weekend and was not available for some subscribers of MoviePass.
The changes in the company’s policy come amidst serious problems financially for the business, which last week borrowed $5 million in order to pay for the movie tickets for their cardholders.
On Tuesday, the CEO Mitch Lowe of MoviePass, in a prepared letter sent to users said he would like to personally apologize for the unreliability and inconsistencies of the company’s service over the past couple of days. He also wrote about the changes the company made.
MoviePass not only has problems with cash flow, but is facing major competition. Not even an hour after the announcement of its planned changes on Tuesday were released by MoviePass, AMC the theater chain said it enrolled more than 175,000 subscribers in its own new service of a similar nature over the first five weeks the service had debuted.
AMC charges its members $20 a month. With that payment, subscribers can view three movies per week at any AMC theater. It is expecting to reach membership of 1 million within the next couple of years.
MoviePass has over 3 million members, but analysts question whether it will be able to remain in business. Stock in Helios and Matheson, its parent, has fallen by over 99% since the fall of last year. The market value for the company plunged from more than $8.8 billion to under $1 million.
On Tuesday, shares more than doubled after the announcement by MoviePass of the price increase, but it rapidly gave all that back. The stock ended the day lower by close to 40% at 50 cents a share.
The company, in its plan for profitability, noted that its cost cutting helped to bring its cash burn under control. It has been going through between $20 million and $40 million monthly.