In response to criticism of the decision, MoviePass CEO and former Netflix executive, Mitch Lowe, said the rules are being put in place to cut down on fraud. In fact, the one-movie policy was something the company dabbled with in the past. Lowe told THR, “When we took that policy down, we saw some people turning MoviePass into a cottage industry, standing in front of a theater selling their tickets to Star Wars, or whatever.”
However, recent financial reports released by MoviePass’s parent company, Helios and Matheson Analytics (HMNY), highlight what could be the true reasoning behind these decisions. The company revealed that it was selling $150 million in new stock to help fund MoviePass, which is burning through $20 million a month. In total, Helios recorded a $150.8 million loss in 2017, largely from MoviePass, as outlined in the company’s recent annual report.
To make things even stranger, MoviePass recently partnered with the bankrupt iHeartRadio to provide a plan that comes with a three-month trial of the radio streaming service. However, users are now discovering that after the free three months, they are being billed $9.95 monthly for iHeartRadio unless they contact the company directly to cancel.
The impact of these questionable decisions by MoviePass is clearly negative, and many are taking to Twitter to express their less-than-enthusiastic responses to these new policies.
BREAKING NEWS: MoviePass kills repeat and unlimited movies, and will cost you $10 more each month if you’re not careful. Sign up for MoviePass, and after three months you'll be billed $9.95 monthly for iHeartRadio unless you contact the subscription radio service to cancel.
— Dave Vescio (@DaveVescio) April 28, 2018
glad i got moviepass while it was still unlimited. it’s like a subscription service that lets me increase black panther’s global box office by a whole $15 every time i wanna use the nicest bathroom at the mall
— demi adejuyigbe (@electrolemon) April 27, 2018
Time will tell whether the subscription service with over 2.5 million users will continue its meteoric growth, or if it will succumb to the massive losses incurred by its seemingly unsustainable pricing model.