If you’ve been keeping tabs on MoviePass, get out your notebook because the service is changing once again.
Following a series of outages, an embarrassing lack of funds, and restrictions on this past weekend’s biggest film, MoviePass is finally explaining what’s going on, sort of. In a press release on Tuesday, the movie theater subscription platform’s parent company, Helios and Matheson Analytics, said it’s reshuffling how its plans will work in a way that will apparently cut the amount of cash it’s burning by 60 percent.
First, it’s raising the monthly price of a subscription to $14.95 within the next 30 days. At the moment, the price is the same $9.95 per month that it introduced a year ago. If you previously signed up for a yearly subscription, MoviePass tells Gizmodo that the terms you agreed upon at the time will remain unchanged.
Clarifying reports from Monday that the company will stop providing tickets for major blockbusters, MoviePass confirmed that “First Run Movies opening on 1,000+ Screens” will be “limited in their availability during the first two weeks, unless made available on a promotional basis.”
Over the weekend, many users found that tickets for Mission: Impossible - Fallout weren’t available in their area. The company explained that it would only be available in the relatively small number of theaters that offer e-ticketing but didn’t say why. Now we know that MoviePass is backing away from the films that theatergoers want to see most and praying that Hollywood comes calling ready to make a deal to share profits.
The press release makes some lofty statements. Citing an online poll from National Research Group, Helios claimed that when MoviePass recommends films, partners with studios, or promotes its own movies, it currently accounts for 20 percent to 45 percent of the national box office. However, as of June, it reportedly accounted for just five percent of the overall box office.
Other changes to its business model included vague pronouncements like a “continued rollout and refinement of the Peak Pricing program,” and “integration of Moviefone.com to support the media buys of brands and studios.”
The company says it’s “accelerating” its plans to become profitable, something it believes will happen once it hits 5 million subscribers. (Helios says MoviePass currently has “more than 3 million” subscribers.) The question is whether subscribers will become disillusioned if they have to wait two weeks to see blockbusters. Otherwise, it will be reliant on the small but loyal independent film audience to bolster its rolls.
The average price of a movie ticket in the U.S. is currently around $9, so the new subscription price is still a bargain if you see at least two movies—and the company has long maintained that it wants to expand the type of films that viewers take a chance on. This is obviously a desperate move that follows its need for an emergency $5 million loan last week just to keep the service going. But MoviePass is trying to spin it as an ideological decision, saying, “This is a strategic move by the company to both limit cash burn and stay loyal to its mission to empower the smaller artistic film communities.”
The company’s stock cratered on Monday, and following the new plan announcement it more than doubled in price... for less than an hour. At the moment, it’s below the $1 mark, where it started this morning.