Financial pressures on MoviePass's parent company’s stock has forced the subscription in-theater service to raise its monthly pricing and limit ticket availability for blockbuster films.
MoviePass is a theater subscription service in which users can see one movie per day per month. It will be raising its monthly subscription fee from $9.95 to $14.95 in the next 30 days.
Parent company Helios and Matheson Analytics made the adjustment as part of a cost-reduction plan. It recently did a reverse stock split and took on an emergency loan to meet pressing cash needs.
Helios and Matheson Analytics stock rose nearly 100% on Tuesday on the news, then settled into a 5% increase to $0.80 a share afterwards. Recently, the company has been in danger of being de-listed on Nasdaq as its stock was trading under $1 a share for a extended period.
The company said it would also limit the availability to customers of first-run movies during the first two weeks of release on over 1,000 screens.
Over this past weekend, the company witnessed complaints from consumers who were unable to use their subscription at theaters to see the big summer hit "Mission Impossible -- Fallout."
Analysts say the problem is that MoviePass pays theaters full price for each ticket. Last week, MoviePass ran out of money and was unable to pay for tickets.
AMC Theaters, which has been in a battle with MoviePass over its low-price service, said its business plan is unsustainable. Recently, AMC countered MoviePass with its own monthly subscription service, charging $19.95 per month and limiting subscribers to three movies per week.
In addition to its subscription business, MoviePass believes it can make money selling customer research data.
Last summer, MoviePass dropped its monthly pricing from around $50 a month to $9.95, and its membership rocketed to 1 million from 20,000.