Film-Tech Forum ARCHIVE: MoviePass Suspends Service (Again!)

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Posted by Jim Cassedy (Member # 4115) on 07-05-2019, 04:14 PM:

MoviePass Suspends Service, Citing Technical Problems

[Edited Version]
Starting July 4, MoviePass will be out of commission for the next several
weeks — at least — with the struggling theater-subscription service provider
saying it needs to fix technical issues and finish work on a new version of its app.

There was also a hint that the money-losing MoviePass business is running low on
funds. The company, in announcing the temporary shutdown, said it “plans to use
this time to recapitalize in order to facilitate a seamless transition and improved
subscriber experience once the service continues.”

As of March 21, 2019, MoviePass’ parent company — Helios and Matheson
Analytics — said it had cash on hand of about $2.8 million and $13.1 million
on deposit with its merchant and fulfillment processors related to MoviePass
subscription revenue. Helios and Matheson said it netted $5.56 million in
new financing from “certain institutional investors,” which closed March 25.

~ BREAK ~

MoviePass said it put the service on hiatus starting at 5 a.m. ET on July 4.
The company said the suspension is due to “maintenance-related issues.”
It didn’t provide details on what the problems are or how the new MoviePass
app will be enhanced.

“Once we have resolved these technical problems, the service will be live
again. We estimate this process will take several weeks,” MoviePass said
in a tweet Wednesday.

☞COMPLETE STORY

Posted by Marcel Birgelen (Member # 6801) on 07-05-2019, 06:02 PM:

I guess the actual news should've read more like this: "We footed the bill for too many tickets during the holiday and we went through the secured credit line at the credit card company."

Posted by David Stambaugh (Member # 1102) on 08-08-2019, 04:17 PM:

https://www.slashfilm.com/moviepass-scandal/

MoviePass, the movie ticket subscription service which was all the rage in 2018, experienced such an explosive rise and tumultuous fall that I would not be surprised if someone ended up making a movie about it one day. And thanks to a recent in-depth report on the company’s questionable business practices, here’s a scene that could be used during the “beginning of the end” portion of the eventual film: CEO Mitch Lowe ordering his employees to change the passwords of heavy MoviePass users so they would not be able to log on and use the service. Read more about that and some of the other aspects of the MoviePass scandal below.

Were you a frequent MoviePass user who suddenly found yourself unable to log in to the service? Mitch Lowe knew you were costing the company tons of money, but instead of figuring out some other way to offset costs (or, you know, doing some actual math before dropping the price to an unsustainable $9.99 per month in the first place), he targeted some heavy users and changed their passwords without their knowledge.

Business Insider spent four months working on an article that chronicled MoviePass’s entire trajectory, and I thought that story about changing the passwords of a small group of heavy users was bad enough…but then I saw that after the company ran out of money in July 2018 and had to borrow $5 million in cash to keep it afloat, this happened:

“…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.”

In the wake of the Mission: Impossible fiasco, things somehow got even worse.

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.”

The full Business Insider article is worth a read, as it recounts stories like the time MoviePass worked with Jerry Media, a company involved with the disastrous Fyre Festival, and spent more than $1 million to host a Big Boi concert at Coachella while fielding tons of calls from subscribers who didn’t even have their cards yet.

MoviePass is still technically clinging to life (even though it has lost a colossal percentage of its subscriber base), but a compliance counsel at the U.S. Department of Justice told Business Insider that MoviePass’s behavior is “certainly unethical and could be illegal,” so it seems as if the company’s days are numbered.