Changes to the subscription plan are set to take effect August 15.
Of late, MoviePass has been in the news for all the wrong reasons after it announced that it will be increasing its subscription prices and add surge pricing for popular movie tickets.
MoviePass has faced a few challenges in the last couple of weeks.
MoviePass, the financially troubled movie subscription service, is limiting screenings to three a month, the service announced Monday.
The company said in a statement that the new limit, which is supposed to reduce the amount of cash MoviePass burns through, will only affect the 15 percent of its subscribers who see more than three movies per month using the service.
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MoviePass announced a new subscription plan allowing subscribers to entertain themselves with a new movie everyday at the cost of just $9.95 a month just around this time past year. The reversal comes after a customer outcry; the $9.95 monthly fee will remain in place.
Under the previous plan, customers could see one movie per day in theaters. Furthermore, peak pricing and ticket verification is being suspended under the new plan. The impact was immediate: the subscriber base has jumped from 20,000 then to over three million today.
"They will not be affected at all by this program, and even better, they'll stop hearing MoviePass is going out of business", Lowe told WSJ. On July 26, the company had to borrow $5 million in cash to pay for movie tickets.
Though the company gained more customers, it struggled to keep up financially, as it has to pay the full price of a ticket at most theaters.
MoviePass CEO Mitch Lowe blamed the change on the small number of users who were taking advantage of the "unlimited" promise. The stock rose 3 cents to 10 cents per share in early trading Monday, soaring over 45 percent on the new plan news.