MoviesPass feels that it finally has a business model that is financially feasible. MoviePass parent Helios and Matheson Analytics (NASDAQ:HMNY) is introducing a new three-tiered pricing plan that will kick in next month, one that becomes more expensive as the restrictions ease for the multiplex-viewing service.
The existing plan that currently allows subscribers to see three movies a month on nonpremium screens -- but only from a thin pool of titles and showtimes that MoviePass makes available on any given day -- will continue at $9.95 a month for folks in economically challenged markets where movie prices are cheap. Others will have to pay either $12.95 or $14.95 month depending on their geographical market, a 30% to 50% increase over what they're paying now.
The price points only get higher from here. The new mid-tier All Access plan will allow moviegoers to see any three nonpremium flicks they want at $14.95 to $19.95 a month. The highest-tier Red Carpet plan that sets members beck between $19.95 a month and $24.95 a month includes one premium screening among the three movies they catch in any particular month. All the plans are going to be hard sells now.
Back to the future
Helios and Matheson amassed a huge MoviePass audience with a bad business model, and now it's paying the price -- if only it could afford to pay the price. Membership peaked at 3.2 million this summer. Helios and Matheson isn't as keen about promoting its subscriber count now that traffic is going the wrong way, but it did note in its latest financial update that it experienced a "significant decline" in subscribers during the third quarter.
The new tiers may win some props in the investing community for their fiscal feasibility, but it's not going to be enough to stop the bleeding of subscribers. The plan offers a weaker value proposition than rival Sinemia, and folks living within driving distance of an AMC Entertainment (NYSE:AMC) multiplex would be nuts not to jump on the AMC Stubs A-List program that has jumped to 500,000 members since its early summer launch.
AMC's Stubs A-List pricing is comparable to MoviePass' Red Carpet offering, but it includes up to dozen movies a month, and they can all be premium screenings. The ability to make reservations ahead of time, receive expedited access at the concession stand, and not be tethered to a financially flimsy company make AMC the clear winner in the new pricing environment.
MoviePass is also offering discounted plans for folks paying a year or even two years ahead of time, but only brazen souls with a hunger for risk would trust Helios and Matheson with two years of money for a service that may not make it through the next few months. MoviePass burned its first batch of annual subscribers by devaluing the platform as the paid memberships played out. There is still value in the MoviePass brand, but largely outside of the 3 million subscribers that saw the service deteriorate before their shielded eyes. It's now time for AMC and its smaller multiplex-running rivals to cash in on the subscription model that MoviePass helped pioneer. MoviePass will be on the outside looking in with its new tiered pricing, and no model is financially feasible if subscriber counts keep shrinking.