MoviePass announced a new subscription plan allowing subscribers to entertain themselves with a new movie everyday at the cost of just $9.95 a month just around this time last year. AMC Theaters called the service unsustainable soon after its introduction, accompanied by threats of legal action; MoviePass has indeed been struggling to continue its burn since then.
Just last week, the company announced that it would be upping the price of its subscription to $14.95 a month. Today, it has decided to go back on that decision – the subscription cost will stay at $9.95/mo. Instead, subscribers will now be limited to three movies a month, with MoviePass offering a discount of up to $5 for each additional ticket.
As per MoviePass, only 15% of its three million users watch four or more movies in a month, and thus this move won’t affect the bulk of its users. CEO Mitch Lowe told Wall Street Journal in an interview that the decision will bring the company’s burn rate down by an astounding 60%, making its attempt to profitability “more manageable,” adding:
“I should have accelerated the process of reducing the burn faster in hindsight. Now I realize no matter how patient investors say they will be, they never are.”
The new plan will not affect annual subscribers until their plan is renewed, but monthly subscribers will be moved to the new plan after August 15.
MoviePass will also suspend peak pricing and ticket verification for users on the new plan, and ticket restrictions on new movies – such as the one introduced with Mission Impossible: Fallout last week – are being revoked as well.
Source: BusinessWire (MoviePass)