MoviePass is back to offering unlimited movies to new subscribers, but there are a couple of extra asterisks aimed at curbing consumption and fraud. With parent company Helios and Matheson Analytics (OTC:HMNY) hitting a new 52-week low on Wednesday just ahead of the move, the update continues to make the model unsustainable, but at least MoviePass will go down swinging.

Outrage sparked among the MoviePass community when it started capping usage for new members on April 13, bundling the multiplex service with an extended iHeartRadio free trial, but limiting the plan's usage to just four movies a month. MoviePass executives suggested that the unlimited pass may not come back, but it did on Wednesday. Helios and Matheson likely realizes it will never grow beyond their existing 2 million subscribers if it offers a plan that's financially feasible. Scale now and pay the price later seems to be the mantra again for MoviePass.

MoviePass homepage showing $9.95 a month plan for unlimited movies.

Image source: MoviePass.

At the movies 

Today's MoviePass offering isn't the same as it was three weeks ago. All members of the service that allows up to one daily traditional screening at a movie theater can no longer see the same movie again. The restrictions kicked in this past weekend, just as Avengers: Infinity War hit the silver screen. Each account is also locked to a single smartphone, a move designed to curb fraud. There are also more members now tasked with sending MoviePass a snapshot of the ticket stub of the movie they're seeing before reserving another check-in time, again, to limit the platform's abuse. Folks were sharing their MoviePass passwords and debit cards, using the debit cards for other in-theater purchases, scalping tickets, or just buying tickets to collect multiplex rewards without actually seeing the movies.

The changes will curb overall usage, something that may make the service less compelling to those who were milking MoviePass dry, but you can almost hear the, "Bye, Felicia," bleeding through walls of its accounting department. Selling unlimited daily screenings of movies for $9.95 is a hard model to turn profitable when MoviePass is paying retail prices that are higher than that for a single movie in most instances.

Helios and Matheson argues that it will eventually be able to offset its operating costs by striking subsidy deals with theater owners, pitching ads, or selling user data to marketers, but all of those revenue streams are like trying to dig yourself out of a hole with a spoon. Spoiler alert: That hole is a gravesite. MoviePass is losing an average of $20 million a month on a cash basis in the six months ending in March, and that red ink is only going to grow as the platform's popularity expands.

The goal now has to be to ramp up quickly and hope that achieving critical mass will either smoke out a patient cash-rich suitor or establish a base that's large enough to withstand the inevitable defections the moment that MoviePass prices its service for sustainability. MoviePass is in a race against available funding. Buckle up.

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