MoviePass announced Monday that it’s slashing its offer to subscribers as the movie ticketing company deals with major financial woes.
Starting Aug. 15, MoviePass subscribers will be allotted three films per month, a significant reduction from the current one movie a day allowance.
MoviePass chief executive Mitch Lowe told The Wall Street Journal that 85 percent of the app’s 3 million subscribers already see three or fewer movies a month.
“They will not be affected at all by this program, and even better, they’ll stop hearing MoviePass is going out of business,” Lowe told WSJ.
MoviePass made headlines last month when the app suffered an outage because its parent company couldn’t afford to pay for customers’ tickets.
That parent company, Helios and Matheson Analytics Inc., hadn’t paid the contractors who process their customers’ payments, so the contractors stopped processing them. Strapped for cash, the company was forced to take out a $6.25 million loan to pay the merchant and fulfillment processors. The company has since paid back the loan, reported WSJ.
In an effort to slow the cash bleed, MoviePass announced soon after that it was raising the subscription fee to $14.95 a month, adding surcharges to certain popular movies, and blocking customers from seeing new movies during their first two weeks of release.
But the new stipulations and increased price angered customers and doubled the cancellation rate of subscriptions, Lowe told WSJ. So the company has settled on customers paying $9.95 a month to see three films.
“We’ve been whipsawing people back and forth,” Lowe said. “I think we’ve got it now.”