MoviePass subscribers are going to get whiplash with the amount of back and forth changes the service has been announcing over the last week. Seriously, after outages put the subscription service on an apparent doomsday countdown, MoviePass has been spending the last week-plus to try to figure out what changes need to be made to become profitable. And guess what? All that news from last week is thrown out the window, as the subscription service announces yet another plan.
As a quick recap, the movie-watching service has been in a freefall after it was announced that the company is rapidly running out of money, and required an emergency loan to keep the lights on. From there, MoviePass announced that changes to their $10 per month service would include a price hike (to $15 a month) and blackout dates on first-run movies debuting in over 1,000 screens. Needless to say, announcing to your paying customers that their service is getting more expensive, with far less benefit, was not a rousing success.
MoviePass’ parent company, Helios and Matheson, saw its stock tumble to record lows, with the threat of being delisted from the NASDAQ looming.
Now, just a matter of days after announcing those incredibly subscriber-hostile changes, the company has realized the error of their ways and announced even more changes. Forget the price hike! Your subscription will still only cost $10 a month. But remember those unlimited movies? Yeah, forget about that! Now, you only get 3 a month. Ugh.
“Because only 15 percent of MoviePass members see four or more movies a month, we expect that the new subscription model will have no impact whatsoever on over 85 percent of our subscribers,” the company said in a statement (via Variety).
So, the big plan to save Moviepass is to take the biggest selling feature of the service and remove it from the equation. As we’ve seen in our vocal comment sections on social media, many subscribers were fine paying a little extra for the unlimited movies. But now, will those people be okay with paying the same price but for less chances to see movies? Especially considering the two-week blackout on most new releases? That’s a lot to ask of anyone paying for the service.
“We are well aware that during our journey to innovate moviegoing — a form of entertainment that over time has become unaffordable and broken — we’ve encountered many challenges. However, any industry-wide disruption like MoviePass requires a tremendous amount of testing, pivoting, and learning,“ CEO Mitch Lowe said in a statement. “We discovered over several months of research that our customers value a low monthly price above nearly everything else, so we came together to create a plan that delivers what most of our loyal MoviePass fans want, and one that, we believe, will also help to stabilize our business model.
Lowe has never been one to mince words, and he continues his brutal honesty here. He saw the reaction to raising the price last week and decided to artificially keep the price lower by taking the other half of the equation away. Apparently, the company believes 85% of the subscribers won’t even notice a difference, therefore it’s okay to upset the service’s most frequent users. Hmmmm. Not sure that logic pans out.
But there is a silver lining for MoviePass. The parent company, Helios and Matheson, has seen a much-needed positive impact on its stock price. Early trading has the stock up 28% to 9-cents a share. Of course, Helios and Matheson needs an approximate 1100% increase in the stock price to avoid delisting by NASDAQ. So, let’s not celebrate just yet.