AMC Entertainment Holdings Inc., the world’s largest theater chain, is weighing legal action against MoviePass over its low-cost cinema subscription, saying the service is unsustainable and bad for the industry.

MoviePass on Tuesday dropped the price of its monthly theater pass to $9.95 a month from $30 or more, offering consumers admission to one show every day at any cinema that takes debit cards, excluding Imax and 3-D screens. The company plans to pay exhibitors full price.

AMC, which charged moviegoers an average of $9.33 a ticket last quarter, said in a statement it’s consulting with attorneys about barring the service in U.S. theaters. The company said the plan was setting up consumers for disappointment if or when the product can no longer be fulfilled.

“While AMC is not opposed to subscription programs generally, the one envisioned by MoviePass is not one AMC can embrace,” the Leawood, Kansas-based exhibitor said.

AMC (AMC.N) shares rose 1.2 per cent to US$13.41 as of 10:09 a.m. in New York. The stock tumbled 61 per cent this year through Tuesday.

MoviePass Chief Executive Officer Mitch Lowe - who was also one of the founders of Netflix (NFLX.O) - called the AMC statement “bluster” and said that the only way the theater chain could refuse to work with MoviePass would be to decline the Mastercard debit cards that MoviePass subscribers use to buy tickets. The cards link to accounts controlled by MoviePass and are used to pay for tickets at full price.

“I’m worried about it, but I wish they would just sit down and talk to us,” Lowe said. “I’m sure at some point or another we’ll be best friends. We’re not asking them for anything, we’re paying full price, our customers are buying lots of concessions.”

MoviePass believes it can eventually make money by selling data on moviegoers’ viewing habits.

AMC refused to honor a MoviePass trial in San Francisco back in 2011, when the subscription was $50 a month. But the theater chain did agree to work with the startup in 2014 on a trial in Boston and Denver.