MoviePass needs to, and will be raising prices and limiting new movies to do it.
In a Tuesday announcement, the company is telling customers that it needs to reduce its costs by 60 percent. Its plan to do this: Raise the service’s monthly cost to $15 a month in the next 30 days and limit availability for new, major-release movies during their first two weeks at the box office.
The announcements come nearly a year after MoviePass, which at the time let customers see one movie a day as long as it was a 2D screening. Before that, MoviePass could cost anywhere from $15 to $50 a month depending on a customer’s plan or region.
MoviePass said Tuesday that its service now has over 3 million subscribers and is “generating incremental non-subscription revenue of approximately $4 to $6 per subscriber per quarter.” MoviePass says this money comes from marketing efforts, thethat adds surcharges to some screenings, various promotions and .
But despite that, the company ran out of cash on Thursday leading into a four-day period, an and a then-unannounced blackout of the major release of . MoviePass confirmed Tuesday that the new Tom Cruise movie is the first film under the new policy of limiting major releases, which MoviePass says can be avoided should a studio decide to partner up with the service. In other words: Probably pay up.
“This is a strategic move by the company to both limit cash burn and stay loyal to its mission to empower the smaller artistic film communities. Major studios will continue to be able to partner with MoviePass to promote their first run films, seeding them with a valuable moviegoing audience,” the announcement said regarding the new policy.
MoviePass has always been a bit too good to be true. The $10-per-month subscription fee is often cheaper than the price of even one ticket to the movies, especially in major cities where a 2D screening can be as high as $17.
Seeing MoviePass adjust its plan and policies to help cut costs isn’t at all surprising considering how quickly the company is burning through cash. Customers however were not made aware of the policy change for new releases before last weekend, leaving many to take out their frustrations on the service over the weekend without that information.
Meanwhile other companies are touting their own competitors to MoviePass, which include, and an upcoming entry from Alamo Drafthouse.
First published July 31 at 7:54 a.m. PT.
Update 8:32 a.m. PT: Adds more details.