The movie ticket subscription service MoviePass, that was a sensation in 2018, had an explosive rise and an equally explosive demise worthy of a documentary movie.
A recent in-depth report on the company’s practices shed light on the questionable actions taken by its CEO Mitch Lowe, who was found ordering his employees to change the passwords of some heavy-users of the service, so they would not be able to log into their accounts.
The company was not able to sustain its cheap subscription fee formula, and instead of finding a reasonable solution to offset the costs, Lowe targeted its heavy-users and changed their passwords without them knowing.
Business Insider spent several months writing a detailed article that describes MoviePass’s story, and the passwords’ issue is just one among several questionable events involving the company. In 2018, for example, the company run out of money and consequently had to borrow $5 million in cash to stay afloat.
“[…]the temporary loss of cash led Lowe to make ‘Mission: Impossible — Fallout,’ among the most anticipated movies of that year, unavailable on MoviePass. He also ordered that half of subscribers be frozen out the weekend of its release,” said a former employee. “Complaints once again appeared online, leading MoviePass to send out a tweet saying it was ‘working on a fix towards this technical issue”.
In the aftermath, things got even worse. Lowe made big blockbuster movies unavailable on the app. The company also enforced a so-called “tripwire”, an automatic block that would activate if MoviePass went past a predetermined amount balance. If the app would exceed the preset amount of money, subscribers would be presented with a message reading: “There are no more screenings at this theater today.”
The tripwire mechanism, initially set to a few million dollars, was eventually brought down to a few hundred thousand.
“It was a guessing game,” said a former employee. “There were some days we actually got all the way through without the tripwire going off.”
Recently, MoviePass lost a huge percentage of its subscribers. However, the company is technically still alive. But with just a few days left to live: a compliance counsel at the US DoJ told Business Insider that the company’s behavior is “certainly unethical and could be illegal” – an official investigation could determine a permanent shut down.