July 31, 2018
Fiscally-challenged MoviePass July 31 announced it is increasing the monthly cost of its theatrical ticket subscription service 50% to $14.95 within the next 30 days.
Corporate parent Helios and Matheson Analytics said the service would also restrict subscriber access to new movies opening on more than 1,000 screens during the first two weeks of release.
“These changes are meant to protect the longevity of our company and prevent abuse of the service,” CEO Mitch Lowe said in a statement. “While no one likes change, these are essential steps to continue providing the most attractive subscription service in the industry.”
MoviePass said the move would cut monthly churn by 60% and prevent abuse of the service. It claims to be generating $4 to $6 per subscriber in non-subscription (concessions) revenue in the current third quarter.
“Over the past year, we challenged an entrenched industry while maintaining the financially transparent records of a publicly traded company,” Ted Farnsworth, CEO of Helios, said in a statement. “We believe that the measures we began rolling out last week will immediately reduce cash burn by 60% and will continue to generate lower funding needs in the future.”
Approaching the one-year anniversary of its standard $9.95 price point, MoviePass has grown to more than 3 million members, and claims to be contributing to “record” box office growth, responsible for about 6% of the nation’s total box office sales in the first half of 2018.
Much of that sub growth has been fueled by a business model that enables users to watch movies for free 30 days out of 31-day month. The more subscribers frequent theaters, the more MoviePass has to pay exhibitors full face-value for each ticket consumed.
The service said it would continue with surge pricing for more popular movies, partnerships with 3rd party media inventory to increase scale and reach of marketing efforts driven by data; creating strategic marketing partnerships and promotions with studios, content owners, and brands, and integration of Moviefone.com to support the media buys of brands and studios
The service also operates MoviePass Ventures and MoviePass Films, which acquire, fund and distribute indie movies.
Regardless, news of the changes didn’t stop HMNY shares from falling – down more than 5% at 75 cents per share in midmorning trading.
On Yahoo Finance, hosts discussed their dissatisfaction with MoviePass.