Subscribers of MoviePass may now have to spend slightly more money when they return to the theater.
The service that allows is customers to see one movie per day for a price of $10 per month, introduced surge pricing on Thursday.
MoviePass told its customers that its model for Peak Pricing will trigger whenever a large amount of demand exists for a movie. For example, if a subscriber wants to see a popular showing of the most recent Jurassic World movie, he or she may be warned by the app that a higher price will be charged to score the ticket.
Moviegoers also will be told when a specific showtime will not have the added fee, but is increasing in demand and might have the added fee soon, according to information sent to MoviePass customers via an email.
The highly popular service started telling its customers in June that surge pricing was on the way. It’s the most recent tweak to a model Wall Street has scrutinized as one that difficult to believe.
MoviePass pays cinemas for tickets that its customers use. Due to having such a low monthly rate, the company takes a loss when clients use the movie pass.
Helios and Matheson, the parent company for MoviePass, it now getting low in cash. The company recently revealed in one of its government fillings that it burned over $40 million in just May operating MoviePass.
At the end of May, the company had just $18.5 million worth of cash, plus accounts receivable of $30.3 million.
Earlier in the week, the company told regulators of its wish to sell stock and debt securities in the amount of $1.2 billion to raise capital. The stock at the company closed Thursday at 19 cents per share.
MoviePass just recently announced it has surpassed the 3 million mark for subscribers and is attempting to draw in more in order to stay afloat. Company executives hope to have 5 million members before the end of 2017 a number they believe will help make it profitable.
MoviePass, through a prepared statement on Thursday, said it remained in the testing period with its surge pricing, which will reach all of subscribers during the next couple of weeks.
To begin, it said its members should expect fees of $2 to $6. Members on a quarterly or annual plan will not need to pay surge pricing until their subscription is renewed.