The year was not friendly to MoviePass, and MoviePass, in turn, was rude to its subscribers. Its increasingly precarious financial position – the parent company Helios and Matheson, which had lost $ 137.2 million in the last quarter alone – has led to ever stricter restrictions on their service, from draconian anti-fraud measures, to price increases, to restrictions on available films and showtime you can feel like chasing Bigfoot. MoviePass was mocked too soon to be true. The critics were right.
After months of testing and business review, the company believes it has a solution: a set of new plans and pricing that more accurately reflects the cost of doing business. Starting in January, MoviePass will introduce a new pricing scheme that will only allow you to pay $ 1
Things are falling apart
It should not be like this. When the $ 10 perpetual plan hit the market in August 2017, Mitch Lowe, CEO of MoviePass, explained the path to success. Although MoviePass would initially lose money on subscribers, it would ultimately have a sufficient impact on the fact that theaters and studios would have no choice but to band together, share revenues with concessions, and throw marketing dollars onto a self-proclaimed savior of an emerging industry , Some of it has happened. But not nearly fast enough to beat the money that set MoviePass on fire.
"The real challenge was the speed with which we've grown and the size and scale, which has brought challenges we just did not anticipate," says Lowe, "growing to one million subscribers in four months and six million subscribers later, adding one million subscribers, the capital required, and the focus on our technology teams, who could scale the scale of all this, have caught our attention. " "
" At the end of the day, I think many people have lost sight of the fact that MoviePass is a technology company. Test and iterate, test and iterate tech companies. We almost made a mistake.
MoviePass Vice-President Khalid Itum
The first wave of customer complaints also came about as MoviePass even had difficulty in timely sending the debit cards that underpin the service to subscribers, but popularity also brought other issues In March, due to the industry's usual fraud, MoviePass demanded that some users take photos of their ticket stubs and upload them to the app, adding additional prizes in July, up to an extra charge $ 6 per ticket for popular shows Later that same month, Helios and Matheson had no more money left on the opening weekend for Mission: Impossible – Fallout which resulted in a system-wide failure Members whose plans had previously expired or were terminated, and asked them to withdraw a subscription, after which they ni e had asked.
This is the short list of complaints. On Wednesday, MoviePass filed 2,493 complaints against the Better Business Bureau, where it has an F rating. Helios and Matheson have been the subject of multiple class actions and investigations into securities fraud by the New York Attorney General . The company and its customers have fallen into an uncomfortable Ouroboros: the more money it lost, the more restrictions it had on its plans. In their latest third quarter earnings report, Helios and Matheson cited a "significant decline" in MoviePass subscribers. Those who are left see an average of less than one movie per month compared to 2.23 movies per month by March. Fewer customers who use your service less often are usually alarming. In the case of MoviePass, the light stays on.
"At the end of the day, I think many people have lost sight of MoviePass being a technology company Testing and iterating, testing and iterating tech companies We almost made a mistake," says Khalid Itum, executive vice President of MoviePass, who oversees much of the company's day-to-day business. In turn, MoviePass may have lost sight of the fact that it is also a consumer services company, and these tests and iterations may feel quite as if they were being torn up.
Yes, a restart seems to be alright. Suppose it is not too late.
The New Deal
Here's a little more detail about these new plans: The bottom layer, called Select, is very similar to MoviePass's current iteration, which restricts subscribers' view. The company attempted to contain losses in July. This past weekend meant that only four of the top 20 films were available at the box office and that there were not more than two titles available on a particular day.
In fact, for many people, Select might turn out to be a worse deal than what they currently have. People in small markets still pay $ 10, while medium-sized markets pay $ 13 per month, and the main markets charge $ 15. Lowe and Itum declined to say whether current subscribers, regardless of their geographic location, would be accommodated at their current interest rate of $ 10. Nor would you say what percentage of existing MoviePass customers currently fit in each shift.
Also the selection of choices will probably not improve much. MoviePass plans to establish availability based on a Itum model called an "inventory-driven model", in which cinemas can dictate MoviePass show times based on the seats they occupy. In other words, the seats nobody wants.
Itum argues that the plan should still address people who value the price more than the election. And in a vacuum it could be. However, MoviePass faces rivals like Sinemia, a similar service that currently offers three tickets a month for $ 9 per month non-inventory 2D movies. For $ 20 a month, AMC Stubs A-List offers three films a week including IMAX and 3D screenings. For rare moviegoers, the Cinemark Movie Club subscription worth $ 9 could be more attractive. It's just a 2-D movie per month, but with no other restrictions, includes a 20 percent discount on concessions and lets you roll unused tickets from month to month.
The other new MoviePass plans fortunately allow you to see which movie you want. The three-movie plan "All Access" includes geographic price levels of $ 15, $ 18, and $ 20, while the "red carpet" plan will get you into an IMAX or 3D movie for one of these three films, at $ 20 , 22 USD. or $ 25. All plans are from month to month. If you live near an AMC, finding a case for them is difficult, especially if you live in an expensive, large market.
"I just think theatrical chains start their subscriptions, the economy works much better for them," says Leo Kulp, media analyst at RBC Capital. "Every time MoviePass or Sinemia buy a ticket, they pay full freight costs, they do not get any offsetting concessions or online ticketing revenue, exhibitors pay half of the ticket price and can benefit from the concessions and other additional sources of revenue third parties just can not . "
The best new MoviePass deal comes in the form of gift subscriptions. For a limited time, if you buy two or more, All Access costs $ 120 or $ 100, and Red Carpet costs $ 150 or $ 140 if you buy many times. No matter where the receiver lives, the price is the same.
However, they also assume that MoviePass will be released in about a year. Helios and Matheson's Q3 filing stated that "without significant additional funding, there is considerable doubt about the company's ability to continue until November 15, 2019."
But Lowe and Itum argue that the slower cash burn is the cause. A not-so-bad situation – but at the cost of paying customers – and that the new plans will keep it afloat.
"When introducing these new plans, it builds on a model that is much more sustainable and has much more up," says Lowe. "Will it be just as big? Probably not, but it will be healthy and strong."
Lowe says that MoviePass created many enemies when it made the Kool-Aid Man entrance in the scene. The exhibitors hated that they devalued the cinema experience. Itum says the studios have been holding back on MoviePass's attempt to reduce profits.
The new MoviePass offers companies an olive branch that the company has disturbed so much. The barbarians at the gate have not just given up their siege, but are building trade routes instead. However, it offers fewer concessions to the actual moviegoers, many of whom at best had a stony year with the ministry.
"It seems to me that the MoviePass brand is down," says Kulp. "I do not think it can not be repaired."
"The best marketing we can do is fix the product and keep our promises."
This may require a thorough renovation. It is unclear in what form this might look like or what some of the business activities of MoviePass should look like. In April, MovieFone was bought and involved in several original films through MoviePass Ventures. Maybe Helios and Matheson also fits MoviePass out of the way as a separate unit; Whether this will happen and what impact it might have remains uncertain.
"I think our mission really creates more empathy and gets Americans to go back to the movies," says Itum. "But in a similar way, when we did this thorough business review, thinking not only about the economy and the business model and the pricing and cost structure, but also what we did, that could have been empathetic – where are we now and how? can we regain trust, how do we recognize, apologize or not apologize, and I realize that the best marketing we can do is to fix the product and keep our promises. "
Whether MoviePass makes it so soon it will play out. If so, then you have a decent deal if you want to go to the movies reliably a couple of times a month and not get locked up in AMC cinemas.
But it seems worth waiting to see if MoviePass has improved for moviegoers as much as for studios and theaters. The success of MoviePass has led to a handful of imitators offering viable alternatives. They may not be perfect, but they have not led their subscribers through so many plot changes.