from the giant-mess dept
Originally, the Moviepass business model seemed like a semi-sensible idea, though we were quick to wonder if it would ever actually make a profit. Under the model, users paid $30 (eventually $10) a month in exchange for unlimited movie tickets at participating theaters, provided they signed up for a full year of service. There were of course caveats: you could only buy a ticket per day, and could only buy one ticket per movie. It also prohibited users from viewing 3D, IMAX, or XD films. Still, the proposal was widely heralded by some as a savior for the traditional, brick and mortar, sticky floor movie industry.
While it looked like the effort was going well, that appears to have been a ruse. A four month investigation by Business Insider (warning possible paywall) is well worth a read, documenting how the effort was bleeding money due to many of the issues Mike asked questions about back in 2012. The outfit went to great lengths to mislead investors that the effort was going well when it was really losing millions of dollars after blowing a fortune on trying to build technology that could easily and quickly geo-match users with theaters in their neighborhoods.
A 2017 price drop to $10 per month resulted in all kinds of breezy press coverage, but all but ensured the project would never make money. In reality, the outfit was struggling so much it couldn’t even keep pace with the demand for membership cards:
“The company was overwhelmed by its overnight success and couldn’t keep up with demand. A quarter-million new subscribers were signing up every month, and MoviePass customer-service lines were flooded with complaints from people who had been waiting weeks for their cards. MoviePass had lowballed the number of cards it would need after the price drop. It got to a point where the vendor making the MoviePass cards didn’t have enough plastic and had to call on its competitors to fulfill all the card orders.”
But way more interesting perhaps is some of the super sketchy practices the company engaged in to try and keep up the illusion of success. Like arbitrarily changing user passwords so they couldn’t actually use the service they paid for:
“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.”
Users on Reddit thought the errors were just another glitch. In reality, they were just being blocked from using a service they’d paid for by an imploding company that was losing at least $40 million every month by the end of July 2018. It’s all another lovely example of executive incompetence, and the giant chasm that often exists between the illusion of success and actual success, especially for companies that prioritize splashy parties and marketing over fundamentals like basic customer service.