Early Monday morning, Moviepass announced that it’s killing the unlimited movie plan that saw it rocket to fame and financial ruin. Instead, it’s switching to a model that will limit customers to just three movies per month. It’s not all bad though — the price of the plan is back to $9.95, reversing a plan that MoviePass announced just last week that would have seen the price increased to $14.95 per month. 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.
The new plan will go into effect on August 15th, and apply for all new and most existing customers. MoviePass says that existing customers will have the “opportunity” to transition to the new plan whenever their monthly subscription comes up for renewal, while people who have paid for an annual subscription will stay on the current (but rather limited) unlimited plan until their annual subscription runs out.
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. MoviePass’s pricing is cheaper than Sinemia — MoviePass is $9.95 per month for three tickets, while Sinemia is $14.95 for three movies — but MoviePass still has some restrictions on what movies you can see, while Sinemia has zero restrictions on what movies you can see, and also lets you into IMAX and 3-D shows as well.
The one big question about MoviePass’s new plan is what big movies you’ll be able to see. MoviePass recently announced that it wouldn’t be letting customers get tickets for any big release in the first two weeks of its opening, which caused a predictable backlash. In the press release announcing its new plan, the company said “the new plan will include many major studio first-run films.” That’s better than including no major studio first-run films, but the wording obviously implies that some releases are still going to be blacked out.
The new plan is a final attempt for MoviePass’s parent company Helios and Matheson to avoid going bankrupt. Since MoviePass rolled out its all-you-can-watch plan for $9.95 last year, the company has been burning through cash, as it loses money on almost every customer. The losses were predicted to be around $45 million for the last few months, and with Helios and Matheson running out of cash, the company has been forced to take increasingly drastic action. It took out an emergency loan in order to keep the service afloat, and at the same time has been tinkering with raising prices, introducing peak pricing, and blacking out some movies in an attempt to stem the losses.
From some perspectives, MoviePass is like any other early-stage Silicon Valley startup: it’s losing money but driving extreme subscriber growth, and undercutting the existing market while doing so. But since MoviePass doesn’t get any kind of deal from movie theaters — it buys tickets for its users at standard box-office prices — the more subscribers it adds, the more money it will lose. There’s some kind of vague plan in the future to monetize data about its users or to use its subscriber base to negotiate deals with movie chains, but the business plan will have to be particularly excellent to turn MoviePass’s dire financials around.
