Here is the understatement of 2018: MoviePass had a rough year.
In March, the company came under fire once subscribers to the movie ticket service realized that it intended to monetize customer data, thanks to comments that CEO Mitch Lowe made at the Entertainment Finance Forum. But the MoviePass subscriber base still grew quickly over the first half of the year, since the deal it offered — up to one movie ticket every single day for a total cost of $9.99 per month — was too good to pass up.
By late July and August, however, MoviePass’s “too good to be true” business model was proving that it was, indeed, just that. A series of SNAFUs happened in rapid succession in August: Many former subscribers discovered that their accounts had been un-canceled. The company ran out of money and severely limited the number of tickets that subscribers could purchase each month. It was then sued by shareholders and investigated for fraud.
Before long, MoviePass had announced and then quickly reneged on several schemes for growing revenue quickly. Even as recently as October, irate former subscribers were receiving notices that they would be re-subscribed to new plans.
All of this chaos has had a predictably negative effect on the company’s reputation. And now it’s trying to fix that reputation, hoping to lure in both new and disaffected former customers while keeping what remains of its existing subscriber base. But it’s got a long uphill climb ahead.
The company’s latest effort to stabilize itself includes a three-tier subscription plan
MoviePass’s CEO Mitch Lowe and executive vice president Khalid Itum unveiled their plans for the future — including several new plans that subscribers can choose from — in a December 5 interview with Variety.
Lowe said the company has “a lot to prove,” to customers as well as to the movie theaters and studios that MoviePass still hopes to partner (or continue partnering) with. (To date, MoviePass’s business model has leaned more on the potential for future partnerships than strictly on subscription revenue.)
“We don’t just have to prove ourselves to our members, we also have to prove ourselves to the investment community, our employees, and our partners,” Lowe told Variety. “We believe we’re doing everything that we possibly can to deliver a great service and we’re in the process of fixing all the things that went wrong.”
During the interview, Lowe outlines a number of the ways MoviePass’s previous plans fell flat, including his admission that the company grew too fast: “People always used to tell me that fast growth can be as bad as slow growth, and I never believed them until now,” he said.
But he also defended the raft of changes that MoviePass has made in the second half of 2018, even if they’ve alienated many of the company’s already frustrated customers. “We’re a technology company and technology companies test, test, test, iterate, and then when they’re done with all that they do it all over again,” he said.
From a customer perspective, the most useful information Lowe had to share was that MoviePass plans to soon launch a new multi-tiered subscription plan, which is divided both by levels of service and by a subscribers’ geographic area. Here are the details Lowe and Itum outlined to Variety:
- The “select” plan, starting at $9.95 per month, will allow subscribers to see three movies per month at designated points during the films’ theatrical runs, with availability determined by MoviePass.
- The “all access” plan, starting at $14.95 per month, will allow subscribers to see any three 2D movies per month, at any point during the films’ theatrical runs.
- The “red carpet” plan, starting at $19.95 per month, will allow subscribers to see any three movies per month, at any point during the films’ theatrical runs, and include IMAX and 3D movies.
- The plans’ base prices will apply in areas of the country where movie ticket prices are lower on average — in the middle of the country and less urbanized areas. In more expensive markets like Los Angeles and New York City, monthly rates will range from $14.95 for the select plan to $24.95 for the red carpet plan.
MoviePass is also working to spin itself off from Helios and Matheson, the data mining firm that bought a majority stake in the company in the summer of 2017, before it began its explosive growth.
But even though its name has become synonymous with frustration for many subscribers and former subscribers, the company won’t be changing it. “MoviePass can be a great name again by doing the hard work of being very transparent and open and not only apologizing, but fixing the product,” Itum said.
MoviePass users who have heard promises like this before — and subsequently been frustrated by many new policies and plans — may still be skeptical. But if MoviePass can stabilize, provide a consistent service, and secure the influx of cash it needs to stay alive, it may still have a future.