MoviePass Announces Price Hike, Limited Availability On Major New Releases

It's been a highly volatile couple of weeks for MoviePass. Its parent company, Helios and Matheson Analytics Analytics Inc. (HMNY), has seen its share price fluctuate after a reverse split and now the company plans on implementing new measures after borrowing an emergency $5 million. Chief among the new measures is a price hike for the app’s standard subscription to go along with tightened restrictions on major releases, according to the company press release.

MoviePass will raise the price of its standard subscription, which allows subscribers to see one movie every 24 hours, to $15 per month. It was lowered to $10 per month in August 2017, which kickstarted a massive rise in subscriptions. MoviePass will also continue charging surge fees for popular movies on top of the subscription.

On top of the pricing changes, the app will block users from seeing major, first-run releases during their first two weeks in theaters. Tickets will be available for those movies on a limited basis. However, as a cost-cutting measure, they might be difficult to get through the app. Many users experienced this already over the weekend when “Mission: Impossible — Fallout” tickets were inexplicably not available days after it opened.

What at first seemed like a glitch is now a new policy, which is combined with the 33 percent subscription hike.

MoviePass called all of these changes ways to “compress its timeline to reach profitability.” Since the service grew in popularity, there have been questions about the sustainability of its business model. Those questions were likely answered Friday, when Helios and Matheson ran out of money to pay its processors, prompting it to borrow $6.2 million from investment firm Hudson Bay Capital Management, paying $1.2 million for $5 million in cash.

Helios and Matheson saw its shares plummet Monday to $0.80, less than a week after the company underwent a reverse stock split and amid concerns that it could be delisted from the Nasdaq. On Tuesday, the share price reached $2.00 but proceeded to drop as low as $0.46.

The $9.95 subscription price to MoviePass was such a boon to consumers that many believed it wouldn't last, especially in cities where the average price of a single movie ticket can exceed $15.