What happened

Can MoviePass become a blockbuster once again?

Investors are hoping so. News that MoviePass is trying to reinvent itself with a three-tiered pricing model sent shares of MoviePass owner Helios and Matheson (HMNY) stock soaring more than 16% in early Friday trading. The stock's currently up only 3% at 1:20 p.m. EST, though, so it would appear that enthusiasm is already waning.

Should it be? Or can MoviePass pull off a successful sequel?

Moviegoers watching a film, eating popcorn and drinking soda

Find your seats and silence your cellphones, folks. The MoviePass sequel is about to begin! Image source: Getty Images.

So what

You be the judge. Here are the three tiers MoviePass says it's going to offer subscribers in 2019:

  • A "select" tier costing $9.95 per month (or as much as $14.95 in higher-priced markets) that entitles subscribers to a "special selection" of up to three movies per month, apparently with significant restrictions on which movies can be watched, and when -- so basically, the current, widely panned MoviePass business model.
  • An "all access" tier that better resembles the company's original offering, permitting subscribers to see up to three (ordinary, "2D") movies a month, but without restrictions on when the movies can be seen. This tier will start at $14.95, rising as high as $19.95 in some markets.
  • A "red carpet" tier that mimics the "all access" tier, adding only the option to see one of a subscriber's three-per-month films in a special format such as IMAX or 3D. This one will cost at least $19.95 a month, and go as high as $24.95.

Now what

MoviePass is attempting to goose enthusiasm for its new pricing plans by offering early adopters the option to buy a year-long subscription to its "all access" tier for $120 (or subscriptions for two people for $100 apiece); or to subscribe to "red carpet" for rates of $150 (for one) or $140 (apiece, for two) as an alternative. There are, however, a few caveats that may explain why investors are quickly losing enthusiasm for MoviePass's latest gambit:

  1. The restrictions: All of MoviePass's three-per-month plans are at least 90% less generous than the one-per-day plans it was selling -- for less! -- one year ago.
  2. The competition: The closer you look at the details, the more it appears that MoviePass rival AMC Entertainment (AMC 6.37%) is offering a better deal at $19.95 for three movies a week.
  3. MoviePass itself: Subscribers have been burned once, and they might feel twice shy about getting into bed with MoviePass a second time -- especially when they're asked to pay now, but not allowed to begin watching movies until 2019. Given how MoviePass has abused its customers' trust in the past, customers may not be eager to see how much MoviePass plans to change the terms of this deal a month from now.

Helios and Matheson investors should be similarly skeptical.