The company will keep the monthly subscription price at $9.95.
"Because only 15 percent of MoviePass members see four or more movies a month, we expect that the new subscription model will have no impact whatsoever on over 85 percent of our subscribers", the company said on Monday.
In effect, the new MoviePass plan is similar to Sinemia, another movie-subscription service that has been running for a while, offering customer a limited number of movie tickets per month. That still works out to something of a deal if you watch enough films in theaters, but it's still going from unlimited movie tickets to just three per month.
Additionally, peak pricing and ticket verification will also be suspended.
"While most of our loyal subscribers shared the passion for this new accessible movie experience and experimented fairly, the fact is that a small number have used our business model to a point where it was compromising the business' long-term stability", he said in a statement.
Two law firms announced on Monday that they have begun seeking defendants for class action litigation against MoviePass parent company Helios and Matheson Analytics, claiming that the company over-inflated MoviePass's profitability when presenting information to investors, who then lost money.
Now, more than 3 million people subscribe to MoviePass.
The embattled MoviePass is taking out all the stops to survive.
The stock plunged from $39 last October to just 8 cents last month. 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.