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Eric Atreides

Moviepass and its Impact on the Box Office

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Ho-ly Shit.

 

The definitive story of how a controversial Florida businessman blew up MoviePass and burned hundreds of millions (paywalled) (Business Insider)

 

Utterly damning.  These are the key bits that many long suspected:

 

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(Mitch) Lowe dreaded the company's power users, those high-volume MoviePass customers who were taking advantage of the low monthly price, constantly going to the movies, and effectively cleaning the company out. According to the Motion Picture Association of America, the average moviegoer goes to the movies five times a year. The power users would go to the movies every day.

 

"Before Mitch came on it was, 'How do we slow down those users?'" one former employee said. "With Mitch it was just, 'F--- those guys.'"

 

Per Lowe's orders, MoviePass began limiting subscriber access ahead of the April release of the highly anticipated "Avengers: Infinity War," according to multiple former employees. They said Lowe ordered that the passwords of a small percentage of power users be changed, preventing them from logging onto the app and ordering tickets.

 

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MoviePass was losing at least $40 million a month by the end of July 2018, in the midst of a record summer movie season. On July 26, the company ran out of money to load on MoviePass cards. Helios & Matheson borrowed $5 million in cash to get it running again, according to a filing with the SEC.

Hollis Johnson/Business Insider

 

But the temporary loss of cash led Lowe to make "Mission: Impossible — Fallout," among the most anticipated releases of the year, unavailable on MoviePass. He also ordered that half of subscribers be frozen out the weekend of its release, former employees said. Complaints once again appeared online, leading MoviePass to send out a tweet saying it was "working on a fix towards this technical issue."

 

A company spokesperson said: "The week 'Mission: Impossible' was released, the merchant processor that funds the MoviePass membership card stopped advancing funds for the purchase of movie tickets for our subscribers. As a result the number of tickets we could purchase was greatly reduced."

 

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Hui Chen, the first compliance counsel expert at the US Department of Justice, described Lowe's actions as "certainly unethical and could be illegal."

 

"If a company is essentially interrupting its service on purpose so that the customers would not be able to use it as promised, that sounds like cheating to me," Chen said. "Without having any further knowledge I don't want to make a legal characterization to call it fraud, but it certainly sounds like it's cheating the customers. That kind of cheating is at least unethical and it's easily something that would be illegal with the right set of circumstances."

 

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Per Lowe's orders, big blockbusters would no longer be available on the app. MoviePass also enforced what it called a "trip wire," an automatic shutdown mechanism for all users that would be activated if MoviePass went past a certain amount balance. If money ever ran out, subscribers would see the following message on the app: "There are no more screenings at this theater today."

 

The trip wire started at a few million dollars, but eventually it wound down to a few hundred thousand.

"It was a guessing game," said a former staffer. "There were some days we actually got all the way through without the trip wire going off." MoviePass did not respond to a request for comment on the trip wire.

 

There's a lot more at the link, talking about how these guys got involved with MoviePass the first place and just what the founder of MoviePass (who was forced out before all of the above happened) is up to nowadays.

 

Just an eye popping, if not surprising read.

 

NB:  The founder of MoviePass, Stacey Spikes, was against the $10m plan from the beginning, as he rightly saw it as wildly unsustainable.  Just a wild read from start to finish.

 

Edited by Porthos
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1 minute ago, Ryan Reynolds said:

I used moviepass 3 times in the past 7 days without any issue. But I don't expect them to last.

It talks a little bit about the current state of MoviePass at the end of the article:

 

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Starting in late 2018, tens of thousands of subscribers began canceling the service. In April, after much of MoviePass management was fired or had quit, internal data that I obtained showed the company's subscription count had fallen from over 3 million to about 225,000.

 

Since the July 4 shutdown, Farnsworth and Lowe are nowhere to be found, as most of the staff have yet to learn the cause of the company's halt, one source said. At present, service has been restored to 40% of subscribers, according to a company spokesperson.

You're in that 40% number, presumably.  If that 40% is accurate, that is. Given some of examples given in that article between what a company spokesman said and what was actually going on, 40% might be a wildly inflated number.

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f6c.jpg

 

====

 

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HMNY today said that it formed a strategic review committee comprised of independent directors, to identify, review and explore all strategic and financial alternatives for the company. Options include a sale of the company in its entirety, a sale of company assets like MoviePass, Moviefone and MoviePass Films. Today, MoviePass notified its subscribers that it would be “interrupting the MoviePass service” effective September 14 because its efforts to recapitalize MoviePass have not been successful.

 

In July, the company had suspended the service to work on what it said were technical improvements as well as an effort to recapitalize the operation, which at its peak had burned through tens of millions of dollars a month.

 

“The company is unable to predict if or when the MoviePass service will continue,” HMNY said in a press release. “The company is continuing its efforts to seek financing to fund its operations. There can be no assurance that any such financing will be obtained or available on terms acceptable to the committee.”

 

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No one should be surprised; the signs it was in deep trouble have been around for months.

The founder of Moviepass warned that the policies adapted by the current management would be disasterous;and so it has turned out.

Bottom line; in the last year of so , it was a good deal for the customer, but a lousy one for the company. 

 

Edited by dudalb
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14 minutes ago, Eric #TeamKong said:

Whaaaaaaaaaaaaaaattttt

in part bitter reactions under that

 

What will that be about?

 

Here is still lockdown, but we might not have curfew starting tonight or in 3 days (depends on how ... those rule immediately after reaching that kind of number, or only it will change after 3 days in the same Inzidenz-rule group they do for certain things) = no cinemas still 😕😢😕

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