"Because only 15 percent of MoviePass members see four or more movies a month, we expect that the new subscription model will have no impact whatsoever on over 85 percent of our subscribers", the company said on Monday.
In effect, the new MoviePass plan is similar to Sinemia, another movie-subscription service that has been running for a while, offering customer a limited number of movie tickets per month. It is backing away from a plan, announced just last week, to raise the price to $14.95.
The company says this will allow it to create a "long-term and sustainable business model".
"Any industry-wide disruption like MoviePass requires a tremendous amount of testing, pivoting, and learning", CEO Mitch Lowe said in a statement, adding that the new pricing will "help to stabilize our business model".
In addition, subscribers to the new plan can also receive up to a $5.00 discount for any additional movie tickets. MoviePass recently announced that it wouldn't be letting customers get tickets for any big release in the first two weeks of its opening, which caused a predictable backlash.
MoviePass will reduce the number of movies its subscribers can see by 90 percent, with subscribers in the $9.95 monthly fee tier seeing their movie allowance decrease from one per day to three per month. And it will no longer enforce ticket verification, which required users to take a picture of their ticket stub and submit it to the company as a way to stop abuse of the service.
"I should have accelerated the process of reducing the burn faster in hindsight", he told the newspaper.
Helios and Matheson stock has plunged as investors have grown increasingly doubtful about the viability of MoviePass. Helios & Matheson shares have fallen almost 100 percent this year, to 10 cents. Peak pricing surcharges are also being rolled back, and the frustrating requirement for subscribers to send a photo of their purchased tickets to MoviePass will be ended. The company has since paid back the loan, reported WSJ.