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Movies Businesses The Almighty Buck

MoviePass Reportedly Changed Account Passwords To Prevent Users From Seeing Films (theverge.com) 49

Posted by BeauHD from the burning-through-cash dept.
MoviePass reportedly resorted to extreme tactics to prevent users from taking advantage of core features, according to a new report from Business Insider. In particular, the report highlights a strategy the company used to keep users from bankrupting it, by changing account passwords to prevent ticket purchases that might cost it money it didn't have. The Verge reports: Business Insider's report looks at how Ted Farnsworth, CEO of MoviePass parent company Helios & Matheson Analytics, and MoviePass CEO Mitch Lowe, transformed the company from a little-known subscription service to a nationwide sensation. It also delves deep into the questionable business strategies and tactics the duo used to keep the company afloat, all while it hemorrhaged money by fronting subscribers the full cost of a movie ticket. MoviePass was not immediately available for comment.

Business Insider's report outlined how the company took on a more adversarial stance toward power users that were costing it too much money. One employee noted, "Before Mitch came on it was, 'How do we slow down those users?' With Mitch [Lowe] it was just, 'F--- those guys.'" The company tried other tactics to actively make its service hard to use, like when it limited the ability for users to see high-profile films like Avengers: Infinity War and Mission Impossible: Fallout. Employees say Lowe demanded they change the passwords of "a small percentage of power users" ahead of those releases to prevent them from ordering tickets through the app, telling people that it was a "technical issue." The company also implemented a "trip wire," which would cut off users once the company reached a certain monetary threshold each day. Users were told "there are no more screenings at this theater today," when in reality MoviePass was disabling its services to prevent it from burning through too much cash.
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MoviePass Reportedly Changed Account Passwords To Prevent Users From Seeing Films More

MoviePass Reportedly Changed Account Passwords To Prevent Users From Seeing Films

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  • charge people money, and then deny access to the service they're paying for.

    MoviePass should be in the black anytime now. /s

    • Re:Certainly a much better business model (Score:4, Insightful)

      by That YouTube Guy ( 5905468 ) on Friday August 09, 2019 @08:15PM (#59072656)
      They might have better luck as an insurance company.

      • They might have better luck as an insurance company.

        If it's to reimburse people after they see a crappy movie, the company will go broke even faster ...

      • They might have better luck as an insurance company.

        Pretty sure that is exactly want they were thinking.

        They were using flawed actuary tables.

    • Re: (Score:3, Insightful)

      by jwhyche ( 6192 )

      Time for a class action lawsuit. People need to get together and sue these people. Put this bitch down once and for all.

    • MoviePass is just another scam company trying to set themselves up as a midlleman who skims a little bit of money from each transaction. But movie tickets already have nearly zero profit margin for theaters -- all the money goes to the movie studios, that's why theaters charge such ridiculous prices for food. So, there's nothing for MoviePass to skim.

      MoviePass is literally in the business of buying movie tickets at full price and then reselling them for less. Anyone with an IQ greater than zero can easil

      • MoviePass is literally in the business of buying movie tickets at full price and then reselling them for less. Anyone with an IQ greater than zero can easily figure out that there's no way to make money at this.

        But won't they make up for it in volume? lol

        Yes, Movie Pass is/was a losing proposition, I was surprised to see them launch their service and figured they go out of business in a year. They outlasted my prediction, but still, someone should have told them that the point of any business is to turn a profit. They must have missed that bit in their 2-day MBA class.

  • since the company shut down its operations in July, "Farnsworth and Lowe are nowhere to be found,

    I'd suggest checking beaches in South America.

    Though I wonder how much money there was left to run with?

  • hmmmm (Score:3)

    by meglon ( 1001833 ) on Friday August 09, 2019 @09:05PM (#59072716)
    That's the smell of a class action lawsuit waiting to be filed.

    • That's the smell of a class action lawsuit waiting to be filed.

      Yeah i guess.

      PLAINTIFF: I was only able to watch $3,896 dollars worth of movies after paying the one-time fee of $119.40.

      DEFENDANT: Look man, we passed out a shitload of really cheap movies.

      Movie Pass one time annual pass = $119.40

      Going to the movies every day for a year = $4,320

      How did they lose money?

      to quote fahrbot-bot "They might have better luck as an insurance company."

      • Re:hmmmm (Score:5, Informative)

        by meglon ( 1001833 ) on Friday August 09, 2019 @10:09PM (#59072890)
        And?

        Movie Pass said:pay us this ammount, and you get this benefit. If they then intentionally reduced that benefit, but kept selling the original package which they KNEW they would not fulfill.... that's fraud. It doesn't matter how you try to defend the company, this entire issue is based on Movie Pass INTENTIONALLY committing fraud.

        • And?

          Movie Pass said:pay us this ammount, and you get this benefit. If they then intentionally reduced that benefit, but kept selling the original package which they KNEW they would not fulfill.... that's fraud. It doesn't matter how you try to defend the company, this entire issue is based on Movie Pass INTENTIONALLY committing fraud.

          So what compensation is the plaintiff looking for?

          • Exactly. The damages will be zero. Or less than zero. But it could make a few lawyers rich and extract enough money to make sure they're gone for good.

            • Exactly. The damages will be zero. Or less than zero. But it could make a few lawyers rich and extract enough money to make sure they're gone for good.

              So when we can no longer get $3000 of movies for $119.40 we win?

              The evil will be squelched?

              I think I get it now.

              • Re: (Score:3)

                by meglon ( 1001833 )
                Well, a complete idiot might learn that lesson from this. A person with a little bit of integrity might learn the lesson that businesses shouldn't commit fraud... or break other laws for that matter. Given the vigor you're trying to give cover to illegal activity with, i might suggest the local DA in your area start looking at you for criminal activities... you seem to think the law doesn't matter.

                • Re: (Score:2)

                  by Kjella ( 173770 )

                  Sadly unless there's some real criminal consequences it's probably the wrong lesson. Those arguing for a class lawsuit doesn't see that the company is imploding, they'll never see any money from that. As CEO I'm sure he got a fat paycheck, if he gets to keep the money and doesn't go to jail the scam worked out for him.

                • Well, a complete idiot might learn that lesson from this. A person with a little bit of integrity might learn the lesson that businesses shouldn't commit fraud... or break other laws for that matter. Given the vigor you're trying to give cover to illegal activity with, i might suggest the local DA in your area start looking at you for criminal activities... you seem to think the law doesn't matter.

                  I'm afraid the "local DA" will be sadly disappointed when they look into my dealings if they are hoping to find criminal conduct.

                  Unfortunately playing devils advocate when contemplating your absurd notion of a class action law suit is != to being a criminal.

                  Perhaps an SEC lawsuit? But thanks for trying to interject some thinly veiled threats into the conversation, i can "see" you better now.

            • Re: (Score:1)

              by Khyber ( 864651 )

              "Exactly. The damages will be zero. Or less than zero."

              Except Fraud is a felony, so we'd be looking at criminal prosecution in which restitution could be ordered to be paid to the victims of the fraud.

              • Criminal prosecution has nothing to do with the civil suit. The most the restitution would be is the amount they paid, and they probably got that back on the first ticket.

                • Each time MoviePass fraudulently prevented a member from claiming a ticket they stole the value of the ticket from the member. While the member was not out more than the price of the membership, MoviePass did enrich itself by the full price of the ticket it failed to provide.

                  • They didn't enrich themselves if they didn't have the money. Easy argument. They merely prevented further debt to their investors.

            • Re: (Score:2)

              by tlhIngan ( 30335 )

              Exactly. The damages will be zero. Or less than zero. But it could make a few lawyers rich and extract enough money to make sure they're gone for good.

              The damages are not zero. If the patron was forced to pay for a ticket that MoviePass was supposed to pay for, that's a loss for the patron. Given it was probably "an event" so the patron brought friends and made plans to see that movie, they would probably pay up.

              You can probably excuse it every now and again, but given this was a intentionally done in order

              • Exactly. The damages will be zero. Or less than zero. But it could make a few lawyers rich and extract enough money to make sure they're gone for good.

                The damages are not zero. If the patron was forced to pay for a ticket that MoviePass was supposed to pay for, that's a loss for the patron. Given it was probably "an event" so the patron brought friends and made plans to see that movie, they would probably pay up.

                You can probably excuse it every now and again, but given this was a intentionally done in order to not deliver on their contracted service, that is breach of contract.

                Doesn't matter if MoviePass has the money or not. The goal isn't just to recover the damages, but to punish. After all, you and I can't uphold our end of contracts just because we don't want to, so why would MoviePass or any other company get away with it?

                I get your point but they weren't forced to see a movie, and I doubt anyone that goes to see a movie every day ( the "power users" they blocked) were coordinating massive social events around each visit such that it constituted an "obligation" to buy a ticket.

                Password doesn't work, no movie. A hardship, or an inconvenience?

                Was there a crime probably. Does it constitute a class action suit? maybe , but probably not.

                • Re: (Score:2)

                  by tlhIngan ( 30335 )

                  I get your point but they weren't forced to see a movie, and I doubt anyone that goes to see a movie every day ( the "power users" they blocked) were coordinating massive social events around each visit such that it constituted an "obligation" to buy a ticket.

                  Password doesn't work, no movie. A hardship, or an inconvenience?

                  Was there a crime probably. Does it constitute a class action suit? maybe , but probably not.

                  Well, consider it this way. I have MoviePass and see a lot of movies. My friends don't and see

  • MoviePassword Incorrect?

  • Imagine a cyborg future where senses would have to be subscribed to. Things would likely go low-res at minimum though.

  • How can anyone, even deluded millionaires with too much money who need to invest in something something computers internet, how could MoviePass seem like a good idea.

    I have an even better idea, and it will grow my subscriber base like nothing ever seen before.

    I'm going to start a subscription service where I sell $10 notes for $5. You have to subscribe to my service for $5 per month and every month I'll send you a fresh, crisp $10 bill.

    I'm going to haemorrhage money like it's going out of fashion (although

  • Comment removed based on user account deletion
    • Sign up with a temporary card number and kill the card immediately before the first billing. At least it'll waste some trivial portion of their resources, and they'll never recoup it.

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