Blogocentric Formulations

This Just In - August 6

MoviePass slashes the number of movies a user can see by 90 percent  
Written as part of "This Just In..."   for "Blog Harbor from The Talent Pond" 

If you're not familiar with MoviePass, it's a pretty remarkable service. When it first started, the idea was that you can go to a theater and see as many movies as you want, for only $9.95 a month. If that deal seems like it's too good to be true, it turns out that it actually was. MoviePass has had a rocky past few years as it's struggled to find a way to become profitable.

At first, I assumed the company was subsidizing the movie tickets as a loss-leader in order to gather data to sell to the studios. Unlike the studios' current generalized methods of getting demographic data, if you have someone with a profile buying tickets on an app, that's an immense amount of data you could provide. You would know who sees movies, how often they see them, what times of day they're going, when they're inclined to see another movie, et cetera, et cetera, et cetera. That now doesn't appear to be the case, though, because the company has desperately been trying to find a way to make the company profitable where ticket sales are concerned.

As of December 2016, MoviePass had 20,000 subscribers. In August 2017 they switched to the popular $9.95/month subscription which allowed you to see one movie per day, which also saw their subscriber base exponentially increase. They had 600,000 subscribers by October 2017, one million subscribers by December 2017, two million by February 2018, and three million by June 2018. So they grew fast; much faster than the company anticipated. Since then, MoviePass has tried a variety of different strategies to tweak their pricing, including:

Eliminating IMAX, 3D, and other premium format screenings
Only allowing subscribers to see each movie once
Surge pricing (i.e., additional fees) for in-demand movies
Restricting which theaters subscribers can go to
Requiring subscribers to take photos of their movie tickets and submit them
Implemented and subsequently reversed price changes repeatedly

Each time they make one of these changes, they email their subscribers and say, "We're so sorry for all of the problems with the app (they also have frequent technical issues) and we'll fix them. By the way, here's how we're going to change your membership." And now, this latest announcement from MoviePass is that they're now limiting users to no more than three movies per month.

I'm a MoviePass subscriber and the reason I'm writing about them today is not because I want to bash a company who's clearly financially struggling to make things work, but rather to point out all the ways to not go about righting the ship. And that mainly revolves around not frustrating your existing customers with constant changes to the user experience. I get that they grew too fast; they never expected to have three million subscribers at this point, and if every one of those subscribers saw two movies a month, it would cost them about $30 million per month. But they have just changed this so often that they now appear messy, disorganized, and desperate.

My wife and bought an annual subscription, so there's very little effect on us (short of the company filing bankruptcy, which is a distinct possibility), but most people are on a monthly subscription so every single month they have a new set of rules and guidelines they have to follow. You literally have to plan your movie-going trips by checking the app, making sure the movie isn't blocked out, and jumping through whatever new hoops the company has decided you have to jump through in order to use the service. It's no surprise that the more conspiracy-minded users are convinced that the company is intentionally trying to make it difficult to use their service so they can save money on movie tickets. Personally, I'm more inclined to think they're just really inept at fixing the problem of too much growth too fast.

I sympathize with their plight, but I think MoviePass needs to pick a course of action and stick with it. Their stock has cratered from $48 per share a month ago to $0.09 per share today as a result of all this tumult and frantic changes. They raise the price to $14.95 a month and then a week later reverse it back to $9.95 a month when they get complaints. They're letting customers lead them around by the nose and their reactive responses aren't doing them any favors. What they really need to do is figure out at what price point the service hits their profit goals. If it's $14.95 instead of $9.95 and only a max of one movie a week, then state that clearly and stick with it regardless of how many people complain.

It might be too late, though. Instead of a carefully implemented plan that loses some subscribers (which they probably need to have happen), they're instead hemorrhaging subscribers who have become so frustrated with the service that they'd rather not deal with it at all. It wouldn't surprise me at all if MoviePass declares bankruptcy in the next few weeks or months... so I guess they only thing I can really do at this point is make sure I see as many movies as possible until then, right?