MoviePass CEO Mitch Lowe
What was the Accusation?
MoviePass, a subscription service that allowed its customers to see one regular format film every day for a monthly fee, launched initially in 2011. The price of the service varied based on region, but was usually in the $35 to $45 range. With the subscription, customers would use a mobile application to select a film, after which MoviePass would load a pre-paid credit card with the exact price of the ticket at the customer’s local theater. MoviePass experienced some success with this model as word of mouth spread about the savings that could be generated from paying for a subscription versus individual tickets. Major cinema chains, such as AMC and Cinemark, were not too thrilled about this new model. Once MoviePass dropped its monthly price to $9.95, the number of customers skyrocketed, but the company could not sustain the growth. MoviePass CEO, Mitch Lowe, began experimenting with ways to save money. He introduced a new system in which some screenings would attach a “peak pricing” fee to certain movies on top of the base subscription price. These peak screenings usually included films in their first couple of weeks of release or particularly popular films. At the end of July in 2018, the company experienced an outage that was later revealed to be caused the company not being able to pay its bills. MoviePass was forced to borrow $5 million just to stay afloat, but not before agitating its customer base. In response to their ire, Lowe, issued a memo, asking his customers to be patient as he seek the best way to keep the company sustainable.
Key Apologia Strategies:
Mortification, Corrective Action, Bolstering
First, we sincerely apologize for the inconvenience caused from the temporary outage in the app over the past day. We have handled the issues on the back-end, and our app is now up-and-running with stability at 100%. We thank you for your patience and your ongoing support.
This month, we introduced demand-based pricing to MoviePass. The first of those features, Peak Pricing, has rolled out nationally. Bring-a-Guest and Premium Features (ie., upgrades IMAX 2D & 3D, RealD, and more) will begin rolling out soon. We will continue to refine Peak Pricing and adjust the algorithm to take into account a lot of the feedback we’ve received in the past couple of weeks, and we thank you for your patience as we continue to evolve MoviePass into the best low-cost option in entertainment. Together, we are reviving moviegoing – and everything that goes along with it.
As we’ve shared with you before, rather than raise the price of the subscription, we’ve decided to enable all of you to have the choice between high value (ability to see up to one movie a day) at a low cost ($9.95) versus the flexibility to see whichever movie you want, wherever and whenever you want to see it. In other words, you can choose to see a movie in high demand on Opening Weekend for a small additional surcharge, or wait to see a popular movie a bit later in its theatrical run at no additional cost.
As we continue to evolve the service, certain movies may not always be available in every theater on our platform. This is no different than other in-home streaming options that often don’t carry the latest shows or movies that may be available on other services. For example, you can’t ever find Game of Thrones on Netflix, nor is Season 4 of Schitt’s Creek available there yet. Here at MoviePass, we have strived to make every movie in theaters available to you as part of your subscription, and Peak Pricing has allowed – and will continue to allow – us to do so.
Some of the feedback we’ve received from you about Peak Pricing is that more of you are using e-ticketing in our app. When you go to a MoviePass e-ticketing theater, you are helping theaters who are actively working with us to ensure that MoviePass remains the best low-cost option. Peak Pricing has also begun driving traffic to weekdays and off-peak hours, which is vital to the entertainment ecosystem and to the health of theaters across the country. Similarly, we are hearing loud and clear from studio and independent distributor partners who support the MoviePass model that our app placements are driving more of you to enjoy their films over others in the marketplace.
We share all of this with you as we believe in explaining to you, our customer, why we are doing what we are doing. We ask for your understanding and vocal support during this time, as we continue to fundamentally change an industry that hasn’t evolved much in years. In fact, ticket prices have risen so much that it’s now simply too expensive for many of us to go to the movies.
MoviePass’ mission is to make moviegoing accessible to everyone and to enhance the power of discovery – but we need your support as we refine our model for the long-haul.
Can’t find the movie you want to see on the app? Go to Twitter and let the studio behind it know. Want more e-ticketing theater options in your area, so that the movies you want to see peak less? Let your theater know you want them to partner with MoviePass.
We’re MoviePass and because of you, we are more than three million strong.
Al-Heeti, A. (2018, July 27). MoviePass outage: Read the full apology from CEO Mitch Lowe. Cnet. Retrieved from: https://www.cnet.com/news/moviepass-outage-read-the-full-apology-from-ceo-mitch-lowe/
Chow, A. R. (2018, July 31). Tracking MoviePass’s bumpy history as turmoil continues. New York Times. Retrieved from: https://www.nytimes.com/2018/07/29/business/moviepass-service-outage-finances.html