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Tue, 17 Sep 2019
The MoviePass Mess Has Finally Come To An End
Furnished content.
Moviepass is no more. The company's all you can eat movie ticket business model never worked as advertised, and a letter to subscribers informed them that the service would be shutting down over the weekend. Users are supposed to be getting refunds without having to ask for them.MoviePass initially seemed like it might be a plausible idea, though in recent months the company has been exposed for being aggressively terrible at this whole business thing. The service initially let movie buffs pay $30 a month in exchange for unlimited movie tickets at participating theaters, provided they signed up for a full year of service. But it wasn't long before the company began hemorrhaging cash, something made immeasurably worse when it dropped its price point to $10 a month as part of a last ditch attempt to spur growth.A bombshell Business Insider expose offered a stunning look at the company's dysfunction, and executives' interest in focusing on flashy marketing instead of fundamental business basics. Particularly entertaining was the fact that as things began to fall apart, company CEO Mitch Lowe thought it would be a good idea to arbitrarily change the passwords of heavy users so they couldn't actually use the service as advertised:"Lowe dreaded the company's power users, those high-volume MoviePass customers who were taking advantage of the low monthly price, constantly going to the movies, and effectively cleaning the company out. According to the Motion Picture Association of America, the average moviegoer goes to the movies five times a year. The power users would go to the movies every day."Before Mitch came on it was, 'How do we slow down those users?'" one former employee said. "With Mitch it was just, 'F--- those guys.'"Per Lowe's orders, MoviePass began limiting subscriber access ahead of the April release of the highly anticipated "Avengers: Infinity War," according to multiple former employees. They said Lowe ordered that the passwords of a small percentage of power users be changed, preventing them from logging onto the app and ordering tickets." With that kind of "leadership," it's probably not too surprising that the effort fell apart. Granted the idea itself wasn't terrible, and individual movie chains have since adopted it with some fairly decent success, something acknowledged in the goodbye letter to company subscribers:"We still deeply believe in the need for the MoviePass service in the marketplace, to maintain affordable access to theaters and provide movie lovers with choices of where to go to the movies. In August 2017, MoviePass began a transformation of the moviegoing industry by introducing its low monthly price subscription service. Since then, others in the industry have followed our lead. Now, as a result of this transformation, movie lovers throughout the United States have the ability to see movies in theaters using subscription services at prices they can actually afford, albeit with limited choices of theaters using those services." SEC filings indicated that the company's net loss ballooned from $7.4 million in 2016 to $150.8 million in 2017, in no small part thanks to the $10 Hail Mary price hike attempted by the outfit. And while the company says it has formed a new strategic review committee to explore strategic and financial alternatives for the company, that likely means a bargain basement fire sale of the company's remaining assets in short order. There's also still that ongoing NY AG probe into allegations that the company misled investors as to the sorry state of the company's financials.
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posted at: 12:00am on 17-Sep-2019
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