Why MoviePass is doomed to fail

During my stay in Los Angeles between 2013 and 2016, I was a MoviePass holder for at least 2 years. Given I was an international student, having a card that turned my moviegoing experience similar to Netflix (economically speaking) was nothing but a godsend.

However, back then the prices were as follows: $35 per month, then $40, only for 2D showings, and you could use the service to see a movie once every 24hrs. Titles could only be seen once.

Now, the terms are basically the same, but the cost is $10 per month all over the US territory, however, the added a few change at their TOS. In simple words, they are as follows:

  • You can’t walk out of a movie more than once per month;
  • They can charge $25 if you use your MP service to do anything but buying a 2D showing (including buying a ticket for rewards only);
  • If you cancel you can’t rejoin for 9 months (before was 90 days);
  • 12-month commitment.

Those are all reasonable limitations, right? And I’d agree with you if they were able to enforce them. Unfortunately for them, and luckily for users, they are absolutely not.

moviepass -c ardBut let’s go with order.

As you might know or might have imagined given the price-tag, MoviePass does not make any money. On the contrary, as this well written Wired article illustrates, the more subscribers are there the more money the bigger the loss. The customer needs to watch just one movie to make MP a loss.

As that Wired article also tries to illustrate – or better, how the MoviePass CEO is trying to say, is that they can sell the information of each user, which gives them leverage and ultimately can lead into making money – through spot-on advertising, for example. Which in the end is the ultimate goal, apparently.

What do I think about this? Nothing much, every company on the planet now can sell your account details if you agree to that option. I don’t think it’s immoral, in the end, we have to face marketing and ads whether we like it or not because that’s an everyday thing. So why not getting advertising that is spot-on for me? It just makes sense and doesn’t waste anyone’s time.

Unfortunately, I don’t think this is the case for MoviePass.

Why? Easy: the MoviePass system does not gather ANY significant data. And I am making this statement even if I take into account the possibility that MP updated their technologies in the last year and a half. Which honestly is not that high of a hope, since they took a long time to adjust the Android app back then and it took as much time to fix a few exploit.

Let’s start with the easy thing, regarding the impossibility for them to enforce their term of service: as much as they might like to think, they can’t track what you’re doing. So, for instance, they can’t know whether you walk out of a movie theater or not or they can’t know if you buy the ticket and get into the theater.

The worst thing though is this: they can’t know if you buy a ticket for the movie you selected in the app because the card statement shows you only the vendor, not the product you bought. So basically right now you could select Call Me by Your Name on the app but buy a ticket for The Post. Given this, you can watch any title as many times as you want.

So how they want to start spot-on marketing if they can’t guarantee the users have watched what they told MoviePass? This directly devalues the information they are selling, and valuing data by itself is not an easy task at all.

Back then also you could use MoviePass to buy a ticket for any premium shows, you just had to pay the difference with your own money (and of course this would only work at kiosks).

MoviePass - AppSomeone on Reddit pointed out that they slightly overcharge the card, so that if you try to do what I’ve described above MoviePass could notice as you used 100% of the amount out of the card, instead of 99.99%. Which is something that makes a lot of sense, but the app and the charging system seems to be connected one way, with the app triggering the charge on the card, but the card can’t alert the app (hence MP) if all the money have been used. So, the only way for MP to detect a violation is to manually check every card statement, because their automation system was absolute elementary school level if they had that.

And generally speaking, their technology just sucks. If you have an Android phone you can fake your position, and the MP app does not realize that, which means you can check in wherever you are to any theater, which means a lot of things.

Don’t get me wrong: for costumers, MoviePass is a great deal. But from a business and technological standpoint, there are a lot of holes they need to figure out if they want to survive. No wonder theaters chain, namely AMC, are starting to limit the service. And no wonder the service itself might start soon to limit its operations

In the end, I think it’s a very ideological system, but ultimately doomed to fail. Chain-centered subscriptions (liek the Vue one in the UK) might be the solution.

Source Wired: How Does MoviePass Make Money?
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