- MoviePass on Tuesday said it would raise its monthly subscription price to $US14.95 within 30 days.
- The service will also begin to limit users’ ability to see movies released on more than 1,000 screens.
- The changes are intended to cut the company’s monthly burn rate by 60%, according to a press release.
The company also announced that movies released on more than 1,000 screens would be “limited in their availability during the first two weeks, unless made available on a promotional basis.”
These steps have been taken in the hope of cutting the company’s monthly cash burn by 60%, according to the release.
On Monday, Business Insider reported that MoviePass had held an all-hands meeting in which CEO Mitch Lowe announced the app would no longer make available major Hollywood releases like this weekend’s new release, Disney’s “Christopher Robin,” and the following week’s shark thriller, “The Meg.”
“While no one likes change, these are essential steps to continue providing the most attractive subscription service in the industry,” Lowe said in Tuesday’s release. “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.”
The news comes close to the first anniversary of MoviePass’ drastically changing its business model by offering the service for just $US9.95 a month (for one movie a day in theatres). The low price point made the service a hot-button topic in the movie industry, with AMC Theatres, the largest movie-theatre chain in the world, vocally expressing a lack of confidence in MoviePass’ business model; it has since started its own monthly subscription service.
Helios and Matheson Analytics, MoviePass’ parent company, had an average monthly cash deficit of $US23 million in the first quarter of 2018, which rose to $US40 million in May and an estimated $US45 million for both June and July. In the past few weeks, Helios and Matheson has struggled to keep its stock above $US1 and suffered multiple service interruptions.
“Over the past year, we challenged an entrenched industry while maintaining the financially transparent records of a publicly traded company,” Helios and Matheson Analytics’ CEO, Ted Farnsworth, said in the release. “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.”
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.