Last Summer I worked at a local movie theater and let me tell you, we hated MoviePass. Sure, it brought in revenue, but it was a lot more hassle than standard ticket sales. MoviePass is a movie subscription service and app that burst into prominence in late 2017 by offering essentially unlimited movies (one a day) at a price of $9.95/month that attracted 150,000 subscribers in two days after its announcement. By the end of the year there would over 1,000,000. And in April it had ballooned to 3,000,000. MoviePass became able to offer this deal as it was backed by investors who hoped MoviePass would gain enough of a subscriber base to use as leverage against theater to obtain better deals and become a major player in the movie theatre ecosystem. Essentially, the investors sought to subsidize moviegoers until the company gained the power to restrict MoviePass from working with certain theaters that did not give into the pressure. Until then, MoviePass and its investors would lose money, and lose money they did. Some $20,00,000 by April 2018. As the number of users grew app crashes and bugs, like account terminations and mysterious charges MoviePass refused to take responsibility for, would increase and go unaddressed for extended periods. The chaos would continue to compound when MoviePass revealed it could not pay its bills and required a $5,000,000 loan, an announcement soon followed by a 50% subscription price hike to $15/month and a slashing of movie options, no more free A-list releases, something I would be yelled at over in my ticket booth frequently. Soon after this would come a 90% cut in the number of movies the service offered a month, from a max of 30 to a mere 3 movies.
Both customers and theaters would begin to feel their heads bounce like ping-pong balls as changes to MoviePass regarding monthly pricing, surge pricing, inconsistent and inconvenient film restrictions, and a litany of consistent bugs and crashes. Not more than a few months could go by without MoviePass substantially altering its business plan. I was witness firsthand to the substantial frustration this caused for hundreds of movie-goers, many of whom soon spoke loudly of dropping the service after one too many bad interactions. Not a day went by without some complication or ruckus over app issues or user confusion over recent changes to the app. Often small crowds would build up out front and inside the theatre as people tried to figure out what was going on, disrupting lines and normal ticket sales. By summer’s end MoviePass’ coffers were demolished from subsidizing a summer’s worth of tickets and the company would report losses of $130,000,000 over that quarter alone alongside a marked loss in subscribers. Something that became apparent in my last few weeks working, as MoviePass users became a much more uncommon occurrence.
It was a fascinating experience to witness the perfect storm of what not to do as a company and the risks one takes with an innovative new business plan. Poor communication with customers on changes, terrible customer service (more than a few customers were hung up on in front of me after asking reasonable requests for clarification on changes in company policy or when they were seeking explanations for unwanted charges), offering too good a deal to have been reasonably sustainable, failure to address technical issues, and a clear underestimating of the people’s willingness to aggressively suck every last drop of value out of something offering “unlimited” movies. There was quite a bit of account sharing going on, artificially increasing the number of subscriptions that maxed out their movie-limits. Currently the service offers itself at $10/month, if you sign up for a year, and allows daily movies, at the risk of locking your account if you see too many movies a month. Considering the regular rules changes, this stipulation is rather vague and disturbing. What movie lover wants to play Russian roulette with a subscription service? Fewer and fewer, evidently.
Sources Used:
https://www.nytimes.com/2018/07/31/movies/moviepass-timeline.html
https://www.nytimes.com/2019/04/10/smarter-living/moviepass-amc-sinemia-movie-subscription.html
Art: https://thenextweb.com/insider/2018/07/28/moviepass-should-be-paying-us/
