The cost of an average movie theater ticket in 2017: $9.
It's not difficult to see how the MoviePass service, which allowed a subscriber to attend up to 30 days of theatrical movies for only $10 per month, could face financial problems when a subscriber attended more than one movie per month.
To stem the bleeding, the Federal Trade Commission alleges MoviePass deterred frequent customers from using its service by:
- Invalidating passwords by claiming “we have detected suspicious activity or potential fraud” and responding to customers weeks later,
- Requiring submission of the physical movie tickets for approval through an app - the app had shortcomings recognizing the submitted photos resulting in cancelled customer accounts, and
- Grouping "subscribers based on how often they used the service, then, once the group hit an unannounced limit, the people in the group would be unable to use the service."
As a MoviePass subscriber in 2017, I faced some challenges using the service. But I can easily say that I watched a bounty of theatrical movies that year!
MoviePass, the failed subscription service that promised unlimited moviegoing for $9.95 a month, agreed on Monday to settle Federal Trade Commission accusations that it knowingly deceived customers, making the service difficult to use, and exposed their personal data. The service, which began in 2011, attracted more than three million subscribers after it offered a deal in 2017 that seemed too good to be true: unlimited movies in theaters for $9.95 a month, or less than the cost of a single ticket in many locations. Its marketing materials said it was good for “any movie, any theater, any day,” including “all major movies” and “all major theaters.” The company hoped that by subsidizing full-price tickets for millions of users, it could negotiate bulk prices from theaters and find other ways to make money from its users. That never happened, and executives, looking to cut costs, focused on trying to make its most active users less active, according to the F.T.C. complaint.