MoviePass Struggles With Communicating Business-Model Changes

Thom Weidlich 08.09.18


MoviePass, the subscription service for moviegoers, has struggled over the years to find the right business model — and to communicate it. That situation has gotten worse of late, to the point where the company seems to be running out of cash. It’s an interesting example of the intersection of operations and communications.

The company’s origins go back to 2011, but it only took off in August 2017, when it lowered its price so that subscribers could see a movie a day for $10 a month. It had 2 million customers as of this February and 3 million as of June.

MoviePass’s terms of service have changed many times, confusing customers. For example, in early July it added peak pricing (like Uber) for certain movies and times. It just announced on Monday a new revamp, which got rid of the peak pricing.

The most recent flip flops went on during the course of a week (and just before that it had to communicate about system outages).

On Tuesday, July 31, it announced it was accelerating “its plan for profitability.” MoviePass said that in the next 30 days it would increase the monthly fee to $15. It would limit availability of first-run movies during their first two weeks of screening, and it would continue to refine the peak pricing. “These changes are meant to protect the longevity of our company and prevent abuse of the service,” CEO Mitch Lowe said in the release (one issue it’s dealt with is ticket scalping).

Lowe also put out a statement of his own in which he admitted the company’s customer service needed improvement and regretted “our lack of proactive communication with you” during the technical snafus. “We are working hard to improve the communications to our community moving forward,” he wrote.

‘Still Standing’

Two days after that, on Aug. 2, MoviePass issued a strange press release apparently prompted by industry sniping that the company was on its last legs. The headline was “MoviePass: We’re Still Standing,” which doesn’t inspire confidence. Mostly the statement focused on the company’s influence on increasing box-office receipts this year, which it has wisely been touting. Still, it admitted it was “going through a rough patch.”

Then on Aug. 6, it announced its new subscription plan effective Aug. 15. The monthly rate would remain $10 after all (“We have heard — and we have listened to — our MoviePass Community and we will not be raising prices to $14.95 a month”), but subscribers would be allowed only three free movies per month and a $5 discount thereafter. And … it was suspending the peak pricing.

“We are well aware that during our journey to innovate moviegoing — a form of entertainment that over time has become unaffordable and broken — we’ve encountered many challenges,” Lowe admitted in the release.

That may be, but we wish MoviePass would put more thought into how all these twists and turns are affecting customers. There may not be a better way to communicate the constant business-model changes, but that may be the point. It shows an interesting connection between operational and communications challenges. Unfortunately, in this case it also shows that MoviePass has been giving its customers whiplash.

Photo Credit: Shutterstock

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