MoviePass is changing its prices again. Yes, really
Posted December 6, 2018 11:05 a.m. EST
(CNN) — MoviePass wants to win back angry customers.
The movie subscription service on Thursday announced a new, complicated pricing structure that is dependent on geography and the kind of movies customers want to watch.
Starting in January, MoviePass will offer three plans that members can choose from. The first, called "Select," starts at $10 a month and will allow subscribers to see three movies each month. The company will announce available titles a week ahead of time. The plan excludes movies during their opening weekends, and limits customers to standard 2D movies.
A second level, called "All Access," starts at $15 a month. The plan allows customers to see any three 2D movies each month at any time during their theatrical run.
The highest tier, called "Red Carpet," starts at $20 a month. It also limits subscribers to three movies, but they can choose from films shown in special formats such as IMAX or 3D.
Not every customer will be charged the same monthly fee. MoviePass says the price for each tier will vary by "zone," with the highest level costing as much as $25 in some markets. The company says the different prices are designed to reflect the "differences in the average ticket price" around the country.
It's been a rough year for MoviePass, which upset many of its original members by tweaking and changing the terms of its service several times. But executives say they are confident the latest plan will help them regain the trust of old members while winning over new ones.
"Change is necessary. We won the hearts of millions of moviegoers, now we need to win back their confidence," said MoviePass CEO Mitch Lowe in a statement. "We realize that the past year brought our subscribers many modifications and even some surprises, some of which weren't well-received; but we listened, we reassessed, and we believe we are primed to offer the American consumer the absolute best offering across America in 2019 and beyond."
MoviePass exploded in popularity more than a year ago when it began charging $10 a month for the ability to see a movie every day. Its membership swelled to more than three million paying customers, but critics derided the model as unsustainable.
By May, it became clear that MoviePass was running out of money. The company began introducing changes to its plan, including surge pricing and ticket verification. Neither were well received by customers.
MoviePass announced in June it would raise the price of a subscription to $15 before reversing course and limiting the number of movies people could see instead.
Meanwhile, the stock price of parent company Helios and Matheson (HMNY) has plunged more than 99%, putting the company in danger of being delisted from the Nasdaq. The company tried to artificially boost the price of the stock this summer, but the value has continued to plunge. The stock is bow worth about 2 cents a share.
Helios and Matheson is also facing other problems.
Board member Carl Schramm, an economist and Syracuse University professor, quit his job in August and claimed that executives mismanaged the business and withheld crucial information from the board.
Purported stockholders also filed two federal class-action complaints against Helios and Matheson in August, claiming the company made "materially false or misleading" statements to the market. The company said at the time that it intended to "vigorously defend" itself and believed the complaints were "without merit."
And the New York attorney general is investigating whether the company misled investors about its finances. That probe is being conducted under New York's Martin Act, an anti-fraud and investor protection law.
Helios and Matheson said in October that it was "fully cooperating" with that investigation.
"We believe our public disclosures have been complete, timely and truthful and we have not misled investors," the company said at the time. "We look forward to the opportunity to demonstrate that to the New York Attorney General."