MoviePass Chief Executive Mitch Lowe said in an interview that the new policy, which takes effect August 15, will reduce the company's cash burn rate by more than 60% and make its attempted transition to profitability "more manageable".
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 says 85% of its customers already see no more than three per month.
Movie theater subscription service MoviePass will not be raising prices, as it had announced last week, but will instead be capping the number of times that subscribers can visit movie theaters. At $9.95 per month, MoviePass is significantly cheaper than a single movie ticket. The beleaguered movie theater subscription company is also canceling two other recent changes - "peak pricing" surcharges for popular movies and a ticket verification process - that were meant to stop the company from bleeding money. That reverses a change announced last week that would have cut access to blockbusters within the first two weeks of release. In a Securities Exchange Commission filing in April, Helios and Matheson Analytics (HMNY), MoviePass's parent company, disclosed that it estimated its average cash deficit was over $20 million a month for the seven months through April. Still, 450,000 of the company's 3 million subscribers will feel a pinch.
The stock gained 2 cents on Monday after the new plan was announced.
Though the company gained more customers, it struggled to keep up financially, as it has to pay the full price of a ticket at most theaters.
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