The U.S. movie subscription service’s demise this weekend comes two years after it unveiled its wildly popular, $9.95 per month subscription fee, which initially allowed moviegoers to see a movie per day, and earning it three million subscribers at its peak.
MoviePass’ plan had been to use its growing subscription clout to secure pricing discounts from the major American theater chains, but those discounts never materialized. This forced MoviePass to tinker with its terms of service at the expense of increasingly irate customers, who found themselves subjected to surcharges and restrictions on available movies and showtimes, often with little to no advance notice.
The first sign of serious trouble for MoviePass occured July 26, 2018, when the service suddenly stopped working for moviegoers, as MoviePass temporarily ceased operations to raise five million dollars to pay its creditors. MoviePass CEO Mitch Lowe, a co-founder of Netflix (before it became the online streaming service of today) and the former president of the RedBox DVD and video game rental company, later issued a lengthy apology to subscribers via e-mail:
“I want to personally apologize to each of you for the inconsistencies and unreliability of our service over the past few days. We’ll be in touch with more updates as we have them.”
More recently, MoviePass’ parent company, Helios and Matheson, posted a whopping $126 million second quarter loss on August 14th. And over the 2018 Christmas holiday season, MoviePass was emailing former subscribers with a 53% discount off a one year subscription, it was viewed by many as a last ditch cash grab.
While almost no one saw MoviePass as a sustainable business model, one of the largest criticisms was the poor manner in which MoviePass treated its customers. Its unintended legacy, however, is that it drove its angry customers to the competing service offered by AMC Theaters, and similar recent services by other chains such as Regal Cinemas and Cinemark Cinemas.