No price hike, but new caps on MoviePass discount tix plan

NEW YORK (AP) — MoviePass, a discount service for movie tickets at theaters, is walking back a planned 50 percent price increase following a subscriber backlash. But it will soon impose a cap of three movies per month, instead of one every day.

The company says the new plan will include "many major studio first-run films." It's not immediately clear whether MoviePass is completely rescinding a recent policy of barring viewings of most major releases during the first two weeks.

MoviePass has shown that many moviegoers will make time to hit theaters when movies are affordable, despite more convenient options such as Netflix and video on demand. At some theaters, it has been common to see long lines with people holding red MoviePass cards, which subscribers can use to charge a movie to the service.

MoviePass has grown to 3 million subscribers, from about 20,000, since it slashed monthly rates nearly a year ago to $10, from as high as $50.

But that success has proven costly. Because MoviePass typically pays theaters the full cost of tickets — $15 or more in big cities — a single movie can put the service in the red. Its parent company recently had to take out a $5 million emergency loan to pay its payment processors after missed payments resulted in service outages.

Though MoviePass says it's not raising prices to $15, there's still a hidden price increase. The company already has a three-movie plan for $8 a month. Now, it will be $10.

MoviePass is also rescinding other cost-cutting measures, including surcharges for popular movies and showtimes and requirements to send photographs of ticket stubs to combat fraud.

MoviePass says the new cap will affect only about 15 percent of subscribers — those who now watch four or more movies a month.

The new caps take effect Aug. 15, though those with annual subscriptions won't be affected until their renewal date.