MoviePass reverses pricing changes, but adds monthly movie limit

A Movie Pass card

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Instead, subscribers will now be limited to three movies a month, with MoviePass offering a discount of up to $5 for each additional ticket.

MoviePass Chief Executive Mitch Lowe said in an interview that the new policy, which takes effect August 15, will reduce the company's cash burn rate by more than 60% and make its attempted transition to profitability "more manageable". The company brought in Netflix co-founder Mitch Lowe to run the service, and he promptly lowered the monthly subscription rate and increased the number of movies users could see.

"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", MoviePass said in a press release.

"It has become clear that a small number - only 15 percent - of the subscriber base has been stressing the system", Ted Farnsworth, the CEO of parent company Helios and Matheson, said in a news release.

MoviePass, which generally pays movie theaters full price for each ticket while only charging users their subscription fee, has been struggling financially in recent months.

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"We have heard our MoviePass community and we will not be raising prices to $14.95 a month", they added. The beleaguered movie theater subscription company is also canceling two other recent changes - "peak pricing" surcharges for popular movies and a ticket verification process - that were meant to stop the company from bleeding money. And it will no longer enforce ticket verification, which required users to take a picture of their ticket stub and submit it to the company as a way to stop abuse of the service.

"I should have accelerated the process of reducing the burn faster in hindsight", he told the newspaper.

The stock plunged from $39 last October to just 8 cents last month.

Now, more than 3 million people subscribe to MoviePass.

Early Monday morning, Moviepass announced that it's killing the unlimited movie plan that saw it rocket to fame and financial ruin.

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