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Movie subscription service MoviePass, controlled by Helios and Matheson Analytics Inc. (NASDAQ: HMNY), said Monday that its latest new subscription plan and business model will take effect August 15. Under the new plan, which began life last year as a monthly service allowing subscribers to see an unlimited number of movies a month in theaters, subscribers will be entitled to view three movies a month at a monthly fee of $9.95. That’s the same fee the company once charged for unlimited visits to theaters.

This means MoviePass will not raise its subscription price to $14.95 a month, as it recently announced. The company said the new plan is based on “usage by the bulk of our subscribers who have historically used MoviePass to attend three movies or fewer a month.” Only 15% of MoviePass subscribers view four or more movies monthly.

MoviePass CEO Mitch Lowe said:

We are well aware that during our journey to innovate moviegoing — a form of entertainment that over time has become unaffordable and broken — we’ve encountered many challenges. However, any industry-wide disruption like MoviePass requires a tremendous amount of testing, pivoting, and learning. … We are now creating a framework to provide the vast majority of subscribers with what they want most – low cost, value, variety, and broad availability – and to bring some moderation to the small number of subscribers who imposed undue cost on the system by viewing a disproportionately large number of movies. We believe this new plan is a way for us to move forward with stability and continue to revitalize an entrenched industry and return moviegoing to everyone’s financial reach.

Color us skeptical. MoviePass must have gone into the business with some idea of how often an avid moviegoer goes to a screening in a theater. By offering unlimited viewing, the company probably figured it could make a marketing offer it would not have to keep. The only way MoviePass would ever have made money is for it to raise prices and hope subscribers never went to more than three movies a month.

The average U.S. ticket price for a movie last year was over $8. At a subscription price of $9.95, a subscriber still costs MoviePass more than the price of a subscription if that subscriber goes to just two movies a month. Keeping the price low and hoping that subscribers will continue to pay even if they don’t use the service seems to be the business model.

A 250-for-one reverse stock split effected just two weeks ago failed to stop the bleeding. The Helios and Matheson share price jumped from $0.08 to around $21.00. Then the company had to borrow some $5 million to meet a scheduled payment, and the stock dropped by 50%. Since then losses mounted, except for the day the company announced the $14.95 monthly fee plan, when the stock gained nearly 15%. But the rise in price was accompanied by a cut in services, and the share price increase didn’t last.

At last look, Helios and Matheson shares traded at $0.11 against a 52-week low of $0.06 a share. The split-adjusted high, according to Yahoo Finance, is $9,715. More than 216 million shares had traded hands before noon Monday.

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