MoviePass is continuing to alter its business plan in attempt to keep the company afloat, but the latest announcement is a dramatic change to what made the company so enticing for moviegoers. CEO Mitch Lowe has announced that starting on August 15 MoviePass subscribers will only be able to see three movies a month (via The Wall Street Journal). MoviePass originally offered moviegoers the opportunity to see one movie every 24 hours.
Lowe said the “three movies per month” decision was made partially because 85% of MoviePass users only see three films or less each month. “They will not be affected at all by this program,” Lowe said. “and even better, they’ll stop hearing MoviePass is going out of business.”
The business model change comes after weeks of controversy for MoviePass. At the end of July, the service went dark because the company ran out of money, forcing MoviePass to borrow $5 million in cash to get the service back online. In attempt to burn less money, MoviePass announced it would not be offering major tentpole releases like “Mission: Impossible – Fallout” on its service during the first two weeks of release. The company also raised its subscription fee to $14.95 per month, up from the previous $9.95 per month fee. The price increase and restriction on new releases are being revoked, meaning MoviePass will still be available for $9.95.
Lowe also announced the “three movies per month” model will abandon the controversial “surge pricing” that went into effect last month. Surge pricing added an additional fee to see popular movies, but the company received backlash for charging more money during non-peak showtimes and having surge pricing that ran as high as $8 dollars for each film.
“We’ve been whipsawing people back and forth,” said Mr. Lowe. “I think we’ve got it now.”
MoviePass’ new model makes it similar to AMC Theaters’ premium subscription program called AMC Stubs A-List, which allows its subscribers to see three movies a week for $19.95 per month. MoviePass subscribers who see more than three films a month will get a discount of $2 to $5 a ticket, if they purchase through the MoviePass app.