MoviePass is once again changing its rules

Danny Woods
August 7, 2018

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 effect, the new MoviePass plan is similar to Sinemia, another movie-subscription service that has been running for a while, offering customer a limited number of movie tickets per month.

"We discovered over several months of research that our customers value a low monthly price above almost everything else, so we came together to create a plan that delivers what most of our loyal MoviePass fans want, and one that, we believe, will also help to stabilize our business model", said MoviePass CEO Mitch Lowe.

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 company is trying to burn less cash so it can stay in business. 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.

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MoviePass, which is owned by technology services company Helios & Matheson Analytics, said it will keep its monthly subscription fee at $9.95 and will suspend peak pricing.

The business model change comes after weeks of controversy for MoviePass. The impact was immediate: the subscriber base has jumped from 20,000 then to over three million today. The new three-movie-a-month plan also appears to have fewer restrictions on peak times or premium movies, according to the company's press release.

MoviePass made headlines last month when the app suffered an outage because its parent company couldn't afford to pay for customers' tickets.

Following last week's news of a price increase, MoviePass has now announced plans to alter its standard monthly plan instead. 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 stock gained 2 cents on Monday after the new plan was announced.

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