What happened

Pretty sneaky, sis.

Less than three weeks after updating its terms and conditions to restrict monthly subscribers to seeing only three movies per month -- instead of the promised 30 -- but promising that "quarterly and annual subscribers will not be impacted until their renewal date," MoviePass pulled another fast one on Friday. In a mid-afternoon email to customers, the Helios and Matheson Analytics (NASDAQ:HMNY) subsidiary announced that annual subscribers will be affected after all. To be precise, MoviePass announced that all its subscribers will now be subject to the three-movies-per-month maximum, and any further movie watching will incur a surcharge.

That's lousy news for MoviePass annual subscribers but perhaps good news for Helios and Matheson investors, who are enjoying a 14.5% surge in stock price (as of 1:50 PM EDT) on the first full day of trading after the announcement -- perhaps on hopes MoviePass, and Helios, will benefit from a big influx of surcharge cash.

Contract going through paper shredder

MoviePass annual subscribers learned on Friday that their contracts weren't as sacrosanct as they might have hoped. Image source: Getty Images.

So what

At least, it could be good news if MoviePass subscribers don't decide that the company's service, which now offers access to 90% fewer films than originally advertised -- and limits the times they're viewable and the selection of films subscribers can see -- don't simply cancel their service.

That's a distinct possibility and an action MoviePass almost seemed to urge its subscribers to take last week, suggesting, "If this new plan no longer aligns with your viewing preferences, we completely understand and would be happy to offer you a refund for the remainder of your annual subscription" -- then providing a big red button to press to cancel. (Some users on Twitter complained, however, that the big red button didn't actually work.)

Now what

So will this latest plot twist turn MoviePass into a success story? I kind of doubt it.

By this point, it's hard to imagine there are any customers left that MoviePass hasn't completely offended and annoyed with its continual and unilateral changes to the terms of its contract. Cancellations seem inevitable, and subscriber growth at this point is probably a pipe dream. At the same time, even with all the restrictions MoviePass has added on, the Helios subsidiary's business model today can still be summarized as: "Pay us the cost of one movie, and we'll let you see two more for free."

That still sounds like a money loser to me.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.