Saturday was the final curtain for the MoviePass subscription service. The company called it quits after failing to recapitalize and revamp the company after a series of misfires over the last several years. In true MoviePass fashion, however, the company is officially calling it a service disruption. By all accounts, however, it looks like this is the end for the beleaguered company. MoviePass promised to issue refunds for subscribers for services for which they have already paid.
Subscribers will not be charged during the service interruption. At this point, we are unable to predict if or when the MoviePass service will continue, CEO Mitch Lowe wrote in a message to subscribers.
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The company said it still believes in the concept of MoviePass, but it could not find a sustainable model during its two years in business. Here is an excerpt from MoviePasss message to subscribers:
Since August 2017, MoviePass has tried a variety of pricing and business models, each of which is challenging on its own. MoviePass had many additional problems including running out of money which disrupted service (August 2018), re-enrolling subscribers after theyd canceled their service (August 2018), parent company Helios and Matheson spinning off the company (January 2019), parent company losing NASDAQ listing (February 2019), pivoting to a new business strategy (March 2019), over-reporting $6.6 million in Q3 2018 revenue (March 2019), accusations against MoviePass of changing the passwords of power users (August 2019), and a security breach exposing tens of thousands of customer data and credit information (August 2019), to name a few.
In addition to these issues, AMC Theatres, Cinemark and Regal Cinemas launched their own successful movie ticket subscription services. Sinemia launched one too, but it did not last long. The company filed for bankruptcy in April 2019.
So far, AMC Theatres has had the most notable success. AMC launched its AMC Stubs A List movie ticket subscription for VIP moviegoers in June 2018. The subscription was an extension of AMCs loyalty rewards program. The company set a modest goal of 500,000 subscribers within its first year, but it far exceeded that. By the end of the second quarter of 2019, the company reported more than 900,000 subscribers. AMC Theatres raised prices during its first year, but to its credit, the price increase was announced in November, to go into effect in January. This increase did not seem to have an impact on subscriptions.
This summer, Regal Cinemas launched Regal Unlimited Movie Subscription Pass, an unlimited movie subscription service with three-tiered pricing, starting at $18 per month. The service has only been available since the end of July, so it is too soon to tell what the results of that service will be. Suffice it to say, AMC, Regal and Cinemark can all learn from MoviePasss example.
We are not at all surprised by the shuttering of the MoviePass service, only that it didnt happen sooner. For the last two years, MoviePass changed its model and its pricing so many times that it was hard to keep up. On top of that, the company failed to be transparent and its poor management and business practices are to blame for the companys lack of success. It wasnt that the market wasnt ready for a movie ticket subscription service – clearly this is something avid moviegoers want. It was that MoviePass couldnt get it right.
Here are a few lessons learned:
- Thoroughly research and test subscription models and pricing before launch. If adjustments are needed, explain them clearly and in advance.
- Always be transparent with your subscribers, including owning up to mistakes.
- Manage expectations and have a clear plan in place for communicating problems to subscribers and other stakeholders.
- Ensure you are properly capitalized to avoid payment-related service interruptions.