Moviepass Rolls Back Changes Adds Limit
Well the story of Moviepass has been quite the interesting one this year. The service is actually several years old but got onto everyone’s radar when they began offering unlimited movies for only $9.95 per month last year. Great deal right?
Of course it was and the company began bleeding money. Then, they enacted some changes. First they limited people to seeing the same movie once and required users to actually upload their ticket stubs. Not a huge deal for most people.
Next, they announced so called surge pricing. Popular new release movies would cost more. Then, they ran out of cash and announced that some popular movies wouldn’t be available at all. Finally, last week they announced a price increased to $14.95 per month. A lot of changes, but now they have backtracked.
Today the company announced the following changes as of August 15, 2018:
- The monthly price of $9.95 will remain the same. It will no longer increase to $14.95
- Surge pricing will go away
- Users will be limited to seeing only 3 movies per month and get discounts on additional movies
- Ticket verification will go away
The company claims 85% of MoviePass users only use their pass three times or less per month and they say this will have a minimal impact on customers. In their press release they even go on to say that those other 15% are causing all of the company’s financial issues.
“All along, we’ve known that we need to invest heavily to prove our business model and bring enough subscribers into the business to truly understand their usage patterns and allow us to leverage ancillary revenue opportunities,” said Ted Farnsworth, Chairman and CEO of HMNY. “However, one year and 3 million plus members later, it has become clear that a small number — only 15 percent — of the subscriber base has been stressing the system. We believe this new business model will immediately reduce our burn so we can refocus our efforts where they belong: making a permanent and positive change in this industry by creating an amazing theater-going experience and building a company that continues to benefit our nationwide community.”
As a reminder, the company recently did a reverse 250-1 stock split to try to prevent themselves from getting de-listed on the market. Thus far it has failed. Look how far the stock has fallen when factoring in the split.
Will This Work?
They have reversed course on a lot and have seemingly implemented a much more sustainable business model. I can only guess that they are actively seeking outside funding and that these changes will help them get that. They are still paying full price for tickets which means even a single ticket can lose them money, but at least they are eliminating those people who were overusing the program.
What are your thoughts? Will this complete overhaul be enough to save the company? Let us know in the comments!