MoviePass’ reality TV-level spiral from a promising startup to absolute shitshow hits all the markers for poor business management and abysmal consumer-facing service. But according to a new report, MoviePass’ also intentionally disrupted its own service by changing user passwords and activating a so-called “trip wire” to cut off its users from certain screenings.
This bit of dumbfounding but somehow unsurprising news surfaced in a sweeping report from Business Insider’s Jason Guerrasio detailing MoviePass’ short but complicated inside history the begins from its earliest days under founder Stacy Spikes—who was eventually fired from his own company—to its present state as a scandal-ridden corpse. The report lays out in detail how the company’s top brass botched crises involving mounting losses and unsustainable consumer demand—including, apparently, borking its own service.
According to Business Insider, which cited former employees familiar with the matter, MoviePass CEO Mitch Lowe instructed employees to change the passwords of a “small percentage of power users” ahead of the release of Avengers: Infinity War in an attempt to cut off their ability to order tickets. Lowe allegedly took a similar approach ahead of the release of Mission: Impossible—Fallout, another 2018 blockbuster for which Lowe ordered MoviePass customers be “frozen out the weekend of its release,” Business Insider reported, attributing the issue on Twitter to a “technical issue.”
Readers at the time shared frustrations about issues obtaining Fallout tickets both online as well as directly with Gizmodo. Aside from instances where the film just straight up wasn’t available in some areas, users also claimed at the time that screenings for all films required surge fees as steep as $8. The company’s response to user complaints varied from pointing to a convoluted limited ticketing model to blaming technical issues.
Aside from ordering subscriber access to blockbuster screenings be shut off, however, Lowe reportedly also had some other brilliant ideas for managing demand. According to Business Insider, the company implemented a so-called “trip wire” for keeping down costs to MoviePass—beginning with a multi-million dollar cap before being whittled down to “a few hundreds of thousand”:
MoviePass also enforced what it called a “trip wire,” an automatic shutdown mechanism for all users that would be activated if MoviePass went past a certain amount balance. If money ever ran out, subscribers would see the following message on the app: “There are no more screenings at this theater today.”
Neither MoviePass nor Helios & Matheson Analytics, its parent company, immediately returned a request for comment. However, a MoviePass spokesperson told Business Insider in a statement that during the week of Fallout’s release, “the merchant processor that funds the MoviePass membership card stopped advancing funds for the purchase of movie tickets for our subscribers. As a result, the number of tickets we could purchase was greatly reduced.”
As for Avengers? A spokesperson for the company told Business Insider that MoviePass rolled out an update prior to the film’s release that was intended to curb abuse of the service, such as by using workarounds to obtain multiple tickets for a single screening or sharing membership cards.
Perhaps unsurprisingly, MoviePass founder Spikes told Business Insider earlier this year that the company’s $10 all-you-can-watch business model was a “promotional thing” intended to help the company reach 100,000 subscribers but that it was not, as is now painfully clear, intended to be a long-term solution.
Spikes, by the way, is just fine. For the recent issue of Inc. Magazine, Spikes is quoted as saying he hasn’t “had a ‘poor me’ moment since” the firing and seems largely pretty at peace with the fact the someone else drove his business straight into a brick wall while he was forced to watch from the sidelines.
In any event, it’s probably time to say MoviePass is beyond the possibility of making a comeback and that this report is more of a post-mortem than a portrait of a company at a crossroads. The future of movie theater subscriptions seems to point toward individual cinemas and chains creating their own versions of an all-you-can-watch plan. But MoviePass, for all its mindboggling missteps, will go down as the one we can thank for breaking the mold.