MoviePass’ clientele received an unexpected message last week from the subscription service’s “director of barketing.”
With black, fluffy ears, puppy dog eyes and a MoviePass bandana, “Chloe” reached out to let users know the company is “listening,” “learning” and “changing.”
“I’d like to explain why from time to time you may have had a ‘ruff’ experience with us but it turns out that I’m a dog and I can’t talk,” penned Chloe, who apparently can write. “What I do know is that I see these humans working like crazy to make MoviePass better and better for you as fast as possible. ”
Though Chloe is certainly meme-worthy, this particular PR stunt lacked luster for users frustrated that, with the company’s constantly changing terms, they were getting almost no bang for their buck. The email was one of many blunders the service has made since its meteoric rise last year.
From thousands to millions
MoviePass has been around since 2011, but the service originally used a tiered pricing model that offered unlimited movies for a $50 price tag. For obsessive moviegoers in cities where ticket prices keep soaring, that rate may have been worth it. But only around 20,000 people were willing to pay MoviePass’ prices for access to their local theater.
That changed in August 2017, when MoviePass CEO Mitch Lowe decided to slash subscriptions to $9.95 per month for what amounted to basically unlimited movies.
“After years of studying and analysis we found that people want to go to the movies more often, but the pricing keeps going up, and that prevents them from going more,” Lowe told Variety at the time. “We’re making it more affordable for people.”
It took less than a year for the service’s subscription base to skyrocket to 3 million, accounting for more than five percent of U.S. box office receipts. But that gargantuan growth proved unsustainable; by May 2018, the company was losing around $22 million per month.
MoviePass made several tactical errors when calculating its subscription cost. One was that users would not actually use their service; like so many subscriptions, the expectation was that a good number of people would sign up for the deal and then forget it existed. But when residents in states with movie ticket prices hovering in the double digits can pay for unlimited movies for $9.95, it turns out they not only subscribe, but they also go to the theater.
The other assumption was that the massive amounts of data MoviePass collected about its subscribers would pay off. Touted as this century’s oil, data collection can tell companies who you are and where you go. And as Lowe pointed out, MoviePass has a lot of data about its users: Their addresses, locations, ages, and demographics. But all of that information has yet to be monetized in a way that could save the service from its money-losing model.
In addition to those missteps, MoviePass has jumped aboard projects destined to fail through MoviePass Ventures, a subsidiary that co-acquires films. The most infamous example is “Gotti” starring John Travolta, which managed to earn the elusive zero percent rating on Rotten Tomatoes. MoviePass promoted the film to its subscribers, but it still became yet another unwise gamble. Given MoviePass’ downward financial spiral, it is no wonder that stock in its parent company Helios & Matheson Analytics Inc. is now worth less than two cents per share.
When MoviePass dropped its prices, the terms seemed too good to be true. And they were.
After MoviePass started encountering financial problems, it introduced a number of modifications to its model, including peak pricing and ticket verification. Now, the $9.95 plan covers only three movie tickets a month, with lowered prices for additional tickets.
MoviePass has also limited the selection of films subscribers can attend. On its website, users can view a calendar with “supported movies.” Newer or high-performing films don’t usually make it on the list. In mid-November, none of the recent blockbusters — “Bohemian Rhapsody,” “The Grinch,” “A Star Is Born” — was supported.
In this context, an email from the “director of barketing” is not what users want to receive. They’re looking for information about why their subscription has become relatively worthless compared to when they enrolled, and what MoviePass is doing to make it better.
After MoviePass grew in popularity, AMC Theatres decided to follow suit. The movie theater chain began its own subscription service, which for $19.95 per month allows users to attend up to three films each week.
AMC Stubs A-List gives subscribers access to all films and dates, including opening nights, and does not impede people from seeing the same movie twice.
But even A-List has its shortcomings; the service just announced a price hike in its most popular states. The affected areas will experience either a $2 or $4 increase in price starting in January, though current subscribers won’t be affected until 12 months after they signed up.
All of this is to say that movie subscription services are a tricky business, and there are few models that are attractive to customers seem to be sustainable long-term. Though adorable dogs may be able to fix most things, “Chloe” likely is not the answer to these companies’ problems. But decades from now, subscribers will be able to tell their grandchildren about how back in their day, a puppy ran the marketing department for a company that let you could go to unlimited movies for $9.95 a month. That legacy makes it all worth it.