MoviePass finally declared itself dead this past week. This would seem to finally close the book on a tumultuous experiment that put the spotlight on a then six-year-old company and created buzz around a deal so good, it couldn’t be true.
Except it was. Just not forever. For that brief window of time users got (mostly) unfettered access to a 2D movie every day for only $9.95 per month, starting in the Fall of 2017 and going until the Summer of 2018 when the release of Mission Impossible: Fallout bottomed out the company’s money reserves. After that the service became a maze of retooled user agreements and reneged deals. Users were limited to three movies per month (higher-priced unlimited options were later advertised, but I have no knowledge of them being implemented), then three movies per month from a “select list” (often limited to films only available in major cities). All sorts of dirty tricks were employed to keep users from actually taking advantage of MoviePass including turning off the service for later showtimes to changing the passwords of the most frequent users without their knowledge. It’s this last nonsense that will stand as MoviePass’s legacy.
MoviePass’s demise has been dissected as a business failure, as a welcome market disrupter and as a reveler of a healthy market of would-be indie and documentary theater goers who aren’t being served by the race to give bells and whistles to multiplex audiences. It was all of those things. But in the toxic cloud kicked up by MoviePass’s collapse, it’s hard to see the benefits of the experiment. Instead let’s focus on that palpable schadenfreude even MoviePass’s proponents (like yours truly) are feeling and what it says about where this all went wrong.
I wrote a year ago that MoviePass was finding problems because it had a unique arrangement where none of the parties at the point of transaction represented MoviePass’s interests. The theater was getting its ticket money, the user was seeing a cheap movie and MasterCard was making its 2.5% (or so) commission. MoviePass had tried and failed to recruit theater chains into its plan from its earliest incarnations and so had decided to enter their field by force, using credit card agreements as their entry window (theaters cannot selectively take some MasterCards and not others).
MoviePass made theaters a reluctant, sometimes hostile participant in the experiment. This was a good strategy. Theaters have been notoriously slow on the uptake as movies adjust to competition from streaming services and larger average screen sizes at home. Many theaters have responded by subtracting seats and screens and adding amenities, meaning ticket prices went up even as options for films to watch have gone down. Theaters, like newspapers, risk ossifying into institutions too slow to adapt even as there is a demand for them to meet. MoviePass’s thesis – that cost was the only barrier to many people going to the movies regularly – was proved correct. They planned to use the overwhelming numbers of subscribers in their care as leverage with the reluctant theaters and an incentive to advertisers*.
Since MoviePass couldn’t partner with theaters in that transaction, it had to be partnered with the movie goer.** Then they swaggered through that partnership like a pimp with poor business instincts. The company’s management demonstrated time and time again that it thought its subscribers were idiots disconnected from communicating their experiences with one another, despite the fact that MoviePass required a decently smartphone-savvy clientele. Every correction MoviePass took, it foisted more blame and burden onto the user. Some of it was subtle, like when it disallowed repeat viewings of the same title to “encourage users” to seek out “a variety of movies.” Much of it was blatant, as when it began requiring some users to upload a photo of their purchased ticket or be banned as someone making a purchase other than the one reported.
On the week of July 4th, users found the service shut down “for maintenance” during one of the busiest movie-going weekends in America. Leaving aside the technical puzzle of interrupting an app’s function for an undetermined amount of time for maintenance like it’s a giant shared water heater or something, the company’s financial woes were no secret. Almost exactly a year before the service had experienced an unexpected outage which turned out to be due to a lack of available funds. While I wouldn’t expect a company to text its users a direct “we’re screwed,” the strategy to put forth a blatant falsehood sent the message that MoviePass management thought the people they were counting on to revitalize movie watching were just suckers. And the longer they suggested that, the more right they became.
It takes a lot of nonsense to practically give away movies to the public and yet become an emblem of how not to treat customers, but the company pulled it off. Adding to the password shenanigans and bad-faith shut down (as well as many other grievances big and small), there was a data breach where tons of sensitive customer data was left without basic protections. Then, when the app briefly worked again before going dark for good, it gave users the option to switch to a “Free Plan.” This plan’s benefit: zero movies for the low cost of no money. It allowed you to effectively cancel, but do MoviePass the courtesy of technically being a subscriber. This suggests a scheme to inflate subscriber statistics. Recruiting a group you’ve continually lied to into a new lie for your benefactors is some next level shady corporate stuff.
Perhaps CEOs of large companies think shady business practices are alien enough to the unwashed masses that they can be disguised? MoviePass’s need to conspire with users to upend theatrical movie exhibition and the company’s shrinking staff meant an unusually thin barrier between the machinations of the CEO Mitch Lowe (also of big red-colored movie revolutions like Red Box and Netflix) and the customer. The company’s repeated strategy of going back on advertised features, blaming the customer for the changes, then making belated half-assed apologies began taking on the cadence of a snake-oil salesman rolling into town expecting to be able to get the hayseeds to line up at his bidding, only to discover that the hayseeds know the definition of words like “unlimited” and “corporate malfeasance.”
On Wednesday Ted Farnsworth, the former CEO of MoviePass’s parent company Helios and Matheson Analytics made moves to purchase the company with the hope to resurrect it yet another time. His attitude does not bode well for success. “We would have been fine if people hadn’t gamed the system, shared passwords, and engaged in consumer fraud,” he claims about a service that for the past year could only be put to its advertised use through gaming and fraud.
With the app down, I’m having to do a little estimating, but at the final bell*** I watched approximately 48 movies using MoviePass, coming to about $3.93 per ticket. I ended about a dollar higher than my per movie cost at the six month point, a pace I think I would have maintained had MoviePass not actively defended against it. Certainly I feel I benefited – as did my local theaters – from this crazy experiment.
I’m looking hard at the Regal Unlimited Plan as it works with the theater nearest me, but it’s more expensive and doesn’t include my local indie theater. I would welcome back a MoviePass. Just not MoviePass.
* It also had some cockamamie ideas about making and distributing movies itself, the less said about, the better.
** Credit card companies are not viable partners, only stand-by observers whose function is to siphon money from every single transaction in America because… we decided we didn’t want to carry paper, I guess?
*** I never cancelled after subscribing in December 2017. For the past three months the app has not worked for me nor have I been charged. My final MoviePass movie was Booksmart.
For a wider view on MoviePass than just the last eighteen months, see Doug Laman’s retrospective (linked at the top of the article).