Cliffhanger: Will big price hike in MoviePass fee save subscription service?

Movie theater subscription service MoviePass, which has been hemorrhaging cash even as it gains new users, announced a 50 percent price hike Tuesday in a struggle to survive.

MoviePass also will limit the availability of some films during the first two weeks after a movie's launch, according to a news release. The steps come days after the company, owned by data analytics firm Helios & Matheson Analytics Inc., filed a regulatory filing acknowledging that it needed to take on a loan after it had trouble paying processors.

The company, which in 2016 got an investment from Dallas-based Studio Movie Grill, said the measures are designed to help it become profitable.

Last August, MoviePass launched a new pricing program that allowed users to see a first-run movie a day for about $10 a month. It would pay the theater owner standard fare, which on the weekend in a major city for a top movie could be more than $14 a ticket. So for every movie per month after the first, theoretically the service was losing money.

Industry watchers, especially segment leader AMC, derided the MoviePass model as unsustainable.

The effort to stem the crimson tide starts now.

To reduce costs and improve revenue, the company said it will increase of the standard pricing plan to $14.95 a month within the next 30 days. Also, first-run movies opening on 1,000 or more screens will be limited in their availability during the first two weeks, unless made available on a promotional basis, the company said.

"To drive attendance to smaller films and bolster the independent film community, MoviePass will begin to limit ticket availability to blockbuster films," the release said. "This change has already begun rolling out, with Mission Impossible 6 being the first film included in the measure. This is a strategic move by the company to both limit cash burn and stay loyal to its mission to empower the smaller artistic film communities."

Ted Farnsworth, chairman and chief executive of Helios said in a statement, the company believes "the measures we began rolling out last week will immediately reduce cash burn by 60 percent and will continue to generate lower funding needs in the future."

But subscribers, some of whom were unable to access the service during the problems with the processor, have taken to social media to complain about the ever-changing rules.

The company said Friday it secured a $6 million loan from Hudson Bay Capital Management in a bid to keep its service going, according to Bloomberg. 

MoviePass launched years ago but gained notice last August when it launched the $9.95 monthly program. It says its "community has grown to more than 3 million members and in turn has contributed to record box office growth, responsible for approximately 6 percent of the nation's total box office sales in the first half of 2018."

In response, both Plano-based Cinemark and AMC have launched their own subscription programs.

Twitter: @krobijake