As MoviePass faces an uphill battle to stay afloat, the subscription moviegoing service on Tuesday announced that it would raise its monthly price to $14.95 from $9.95 and limit the access to virtually all wide-release movies during their first two weeks in theaters.
MoviePass parent company, Helios & Matheson Analytics, whose stock has declined 98 percent in the last month, said the changes should help reduce costs and cut the company’s monthly burn by roughly 60 percent.
The company said these are the beginnings a long-term growth plan to protect existing subscribers and set the business up for future sustainable growth.
“These changes are meant to protect the longevity of our company and prevent abuse of the service. While no one likes change, these are essential steps to continue providing the most attractive subscription service in the industry,” MoviePass CEO Mitch Lowe said in a statement. “Our community has shown an immense amount of enthusiasm over the past year, and we trust that they will continue to share our vision to reinvigorate the movie industry.”
Of the major changes MoviePass is making, outside of hiking its price, subscribers will now have limited access to first run movies opening on 1,000 or more screens during their first two weeks in theaters, unless the movies are made available on a promotional basis.
MoviePass users complained on Twitter over the weekend when they learned they couldn’t see “Mission: Impossible — Fallout” at most major theater chains. In Los Angeles, the movie was showing at Landmark theaters, which has an exhibition partnership with MoviePass.
MoviePass said that studios would still be able to partner with the service to promote and make available their major new releases. MoviePass hopes that partnering with studios, exhibitors, brands and other companies, as well as integrating its film finance arm MoviePass Ventures and its production arm MoviePass Films, will help increase its revenue streams.
Seeing as MoviePass pays the full amount for a movie ticket each time a subscriber goes to the theater — and in some major cities the cost of a ticket can balloon to more than $20 — despite only pulling in, now $15 a month per subscriber, the company made its latest changes to stop the bleeding.
Shares of Helios & Matheson, which owns 92 percent of MoviePass, have plummeted roughly 100 percent in the year to date as the company has done everything in it’s power to try to bolster the stock and avoid being delisted on Wall Street.
“Over the past year, we challenged an entrenched industry while maintaining the financially transparent records of a publicly traded company,” Helios & Matheson CEO Ted Farnsworth said in a statement. “We believe that the measures we began rolling out last week will immediately reduce cash burn by 60 percent and will continue to generate lower funding needs in the future.”
Helios & Matheson has poured tens of millions of dollars into the subscription moviegoing service, fueling its booming growth to three million-plus users.
But that subscriber growth has proven costly: The company reported $40 million in MoviePass losses in May, and anticipated that to grow to $45 million in June — with just $18.5 million cash on hand as of May 31.
In an April filing with the Securities and Exchange Commission, Helios & Matheson reported losses of $150 million in 2017, thanks to MoviePass and the lower subscription price launched last August — up from just $7 million in losses the year before.