Last August, MoviePass had 20,000 subscribers. As of February, it had two million. That explosive growth has given the company scale and leverage it hadnâ€™t dreamed possible by this point. Itâ€™s also given scores of MoviePass customers a serious headache.
Every fast-expanding company has growing pains. But over the past six months, MoviePass has invited a broad range of complaints, ranging from long waits for membership cards and non-responsive customer service to specific theaters and movies being unexpectedly blacked out.
It’s one thing to tinker under the hood. It’s another to do so when you’re speeding down the highway. But MoviePass is at least aware of the issues, particularly around technical mishaps. â€œI kind of parachuted in folks to triage the situation, and they were contractors; we outsourced the solution,â€� says MoviePass CEO Mitch Lowe. â€œDespite the amount of time we gave it, we hadnâ€™t made as much progress as I wanted.â€�
The company has already introduced some changes that it says should help with some of that progress. But the deeper tension at playâ€”that of balancing customer satisfaction with building a profitable businessâ€”may not be so easily solved.
Gripes have followed MoviePass since it launched its revised subscription model last August. The company slashed its cost to $10 per month, for which members could see one movie a day, paid for via a company-supplied debit card. The gambit to acquire customers paid off better, and more quickly, than anyone anticipatedâ€”including MoviePass. And why not? It often pays for itself with a single viewing. Go to a dozen movies a month, and a MoviePass subscription could save you well over $100 in that month alone.
The problems started early: MoviePass quite literally couldn’t keep up with demand. Lowe readily acknowledges that it sometimes took weeks, if not longer, for the company to deliver the debit cards to new subscribers. Complaints to customer service lines would go either unanswered or inadequately addressed. And all the while, more cracks began to show in the companyâ€™s too-good-to-be-true veneer.
Lowe sees MoviePassâ€™s customer service issues as falling into two equal but distinct categories: Inadequate communication of information to new customers about how the service works, and actual breakdowns in the mechanisms that power MoviePass. The former covers issues like customers who donâ€™t realize they need to register their card before their first MoviePass purchase, or who are unclear about whether a specific theater honors MoviePass. â€œItâ€™s your first time, you did something wrong, and of course we havenâ€™t made it super-obvious,â€� Lowe says, adding that the MoviePass is working on a series of short videos to help more clearly explain how membership works.
The latter category often comes down to MoviePass inadequately keeping up with its scale; Lowe says that demand for Black Panther tickets the first two weekends overwhelmed its system, leading to brownouts and slower response times in the app. On these issues, MoviePass has the makings of a plan in place. In January the company hired Nitasha Mulla, formerly of Mashable, as its first chief marketing officer, charged in part with more clearly communicating MoviePass policies to customers. And on Monday, the MoviePass announced a partnership with customer service shop TaskUs, as well as the hiring of its first VP of customer experience.
Strategic hires, more reps, and strengthening the backend should go a long way to resolve those hiccups. But there’s a third category of frustrations about MoviePass that stem not from lapses in the system, but from intentional choices that MoviePass has made to help shore up its futureâ€”and that have left some present-day users in the lurch.
Tech news sites understandably picked up on early reports; Lowe says he was joking. â€œI was just being in a funny mood and just said it sarcastically,â€� says Lowe. â€œWe are not tracking people.â€�
In fairness, thereâ€™s no indication that MoviePass does currently track people beyond that check-in within 100 yards of a theater. But the misstep underscored that MoviePass hasnâ€™t earned the benefit of the doubt from its customersâ€”especially when that sort of broader location tracking is exactly how the company plans to grow, eventually offering discounts not just at movie theaters but at nearby establishments as well.
At some point, MoviePass will do something close to what Lowe described. When it does so, it will need to communicate that privacy creep with clarity and precision. Up to now, though, neither of those traits have been the company’s strong suit. Take the removal of 10 AMC theaters in major metropolitan areas from the service, which came without warning in late January, sparking confusion and frustration among subscribers. Or a less widespread incident in which some MoviePass cardholders were unable to buy a ticket to the Jennifer Lawrence spy thriller Red Sparrow on opening weekend, part of a round of testing in which MoviePass â€œdouble-marketedâ€� the film in some places, and made it unavailable in others.
These werenâ€™t backend burnouts or the result of an understaffed customer service department. These were business decisions, made by a company navigating one heck of a Catch-22: The more customers it has, the more money it loses. It needs to use its newfound leverage to make concessions and marketing deals with theaters and studios before it collapses under the weight of its own success.
â€œOne of the things we need to communicate better is that weâ€™re in 91 percent of theaters, but theaters and showtimes are our inventory. Weâ€™re constantly trying to figure out how to deliver a service with incredible value, but at the same time learn how we can get more people into specific films,â€� says Lowe. â€œWeâ€™ve grown so fast, some of these things are out of whack.â€�
‘Companies that are scaling really, really fast, like MoviePass, have one chance to make a good impression and retain customers.’
Andrew Rohm, Loyola Marymount University
That pressure seems also to have inspired a sometimes adversarial stance toward its own customers. MoviePass has actively canceled accounts that partake in what it views as fraudulent activity: charging more to the MoviePass card than the company allots for a given showing. That can happen if, say, someone books a ticket through the MoviePass app but puts a 3-D or IMAX ticket on their MoviePass card, or purchases two tickets at once on one card, or pays for popcorn, or a host of other misuses, either intentional or benign. The company has even gone so far as to ask customers to take photos of their ticket stubs to prove that they attended the screening they signed up for, and not a more expensive version.
Lowe says that MoviePass has reinstated 10 percent of banned accounts after finding the movie theater at fault, and describes the request for evidence as a way to help reinstate wrongly canceled customers. But the dynamic that its actions createâ€”guilty until proven innocentâ€”may erode a certain amount of trust between MoviePass and its customers, especially when the company has been ineffective at communicating its bylaws to begin with. Thereâ€™s no benefit of the doubt.
â€œThat sort of puts a wall up between the company and their customer,â€� says Andrew Rohm, marketing professor at Loyola Marymount University. â€œItâ€™s easy to say they should err on the side of the customer comes first, but this may be also a factor of the financial pressure the company might face in its business model.â€�
Talking It Out
The growing pains may be awkwardâ€”and actively annoying for the affected MoviePass subscribersâ€”but they donâ€™t seem currently to represent any kind of existential threat to the company. MoviePass continues to broaden its user base, and Lowe cites internal surveys that indicate that the majority of subscribers are perfectly happy, with only six percent giving it a failing grade The TaskUs partnership, too, should alleviate the more quotidian concerns.
Still, continually adjusting what a MoviePass subscription does and does not cover, adjusting levers that leave customers in the lurchâ€”or worse, with a deactivated accountâ€”could wind up doing long-term damage, suggests Rohm. â€œCompanies that are scaling really, really fast, like MoviePass, have one chance to make a good impression and retain customers,â€� he says. â€œI would imagine the majority of subscribers, theyâ€™re going to weigh the frustration costs and the annoyance factor with, â€˜is this really worth $10 a month for me given that I already have a Netflix subscription?â€™ I think that is a significant risk to not only the growth of their subscriber base but their ability to maintain their current base.â€�
Disgruntled subscribers can at least take some comfort in knowing that while MoviePass will likely continue to adjust its inventoryâ€”promoting and disappearing movies and theaters in its urgent search for sustainabilityâ€”it at least has learned the importance of giving a heads-up. â€œWe need to let people know in advance what weâ€™re doing,â€� says Lowe. â€œWe need to highlight the terms and conditions in a lot better ways to describe exactly what the terms of service are, so that people donâ€™t get surprised.â€�
Or, more to the point: so they donâ€™t decide to stay home instead.
MoviePass the Popcorn