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MoviePass settles FTC allegations that they limited usage, exposed user data

309 points by aarestad 5y ago

ahmedalsudani 5y ago
That's amazing. Matt Levine covered it in his column today as well--haven't had time to read it yet, but it's probably good as usual https://www.bloomberg.com/opinion/articles/2021-06-08/moviepass-changed-some-passwords https://www.bloomberg.com/opinion/articles/2021-06-08/moviep...
- justusthane 5y ago
  I suspect you're downvoted for recommending something you didn't read, but yes, it is very good: > If you sell $20 worth of movie tickets for $10, people will sign up, you will have rapid user growth and you can probably get someone to think that that’s valuable, even though in fact every user that you add costs you $10. > But — unlike most of the “MoviePass economy” — MoviePass was not actually a venture-funded startup, did not raise piles of money, and was somewhat constrained by economic reality. So at some point the company looked for ways to make this insane business model work, and it found one. It’s pretty simple: What if MoviePass collected your $10 each month and then, when you asked it for movie tickets, it ignored you? Then it could keep collecting your $10 a month without spending money on tickets. Eventually you’d get annoyed by not getting what you paid for, and you’d try to cancel your membership and get your money back, but MoviePass could ignore that too and keep collecting the $10. Giving people unlimited movie tickets for $10 a month is a good way to get rapid customer growth; telling people you’ll give them unlimited movie tickets for $10 a month, but not actually doing it, is a way to pivot to profitability.
  - jcwayne 5y ago
    Add in a startup fee and it would be a gym membership.
  - Chris2048 5y ago
    I suspect a lot a corps sub to a similar model: Make it not-obvious when something is billed, and make sure never to tip the customer off (e.g. by sending a monthly invoice). More than one company made it very easy to activate non-obvious reoccurring payments, and then communicate nothing wrt to the fact. On that note: Fuck you NowTV. also non too happy with Paperspace.
lotsofpulp 5y ago
The government knows the executives at MoviePass committed theft, but we will not see any criminal charges filed.
- twinkletwinkle_ 5y ago
  Crime is a social construct. edit: A poor person who steals is charged. A rich person who steals behind the facade of a company is not. We call the poor person a criminal. It's entirely divorced from an actual moral framework, but simply constructed. I was agreeing with the commenter I replied to.
  - mdavidn 5y ago
    So are criminal charges.
    - GIFnotGIF 5y ago
      So are movies.
      - arthurcolle 5y ago
        Movies are real physical artifacts. Calling them a social construct is beyond specious.
        GIFnotGIF 5y ago
        I was just joining the thread
    - usrusr 5y ago
      And the entire concept of ownership. It's actually quite unbelievable how there can be societies that do have the concept of a death sentence, but don't have the concept of a property nullification sentence. "You may live, but you have to start at zero and any obligation someone might have to you is nullified". The inverse of bankruptcy, basically.
diogenesjunior 5y ago
>“MoviePass and its executives went to great lengths to deny consumers access to the service they paid for while also failing to secure their personal information,” As expected.
- 0xbadcafebee 5y ago
  s/big tech/business/
- forgotmysn 5y ago
  im not sure id put MoviePass in the same category as FAANG
  - mc32 5y ago
    It’s different degrees of abuse. Moviepass committed fraud, and FAANG are not committing that kind of crime, they do engage in sketchy things. The whole ad business model is sketchy, getting people addicted to “binging” on content is questionable, Amz and its commingling issues, copying resellers, it’s terrible review system and well, social media siphoning personal data unscrupulously.... that’s not exactly stand up catagory.
    - forgotmysn 5y ago
      im certainly not defending big tech, but as you say, they have different problems than MoviePass did.
      - mc32 5y ago
        True, Our problem is they don’t think they have a problem when they clearly do.
- justapassenger 5y ago
  MoviePass was as much as much of a tech company as WeWork. Having a website doesn’t make you a tech company.
Someone1234 5y ago
If a private individual did the things set out here they'd be criminally liable. When a company executive orders employees to do these things, they're not facing any criminal complaint at all (any of them). See also Wells Fargo multiple thefts (both fraudulent accounts with fees, and literally entire homes/all possessions). It is pretty evident that many laws are constructed (e.g. CFAA) wherein there's one rule for individuals and a completely different rule for executives/companies. I understand that the FTC themselves cannot jail people. I don't understand why the justice department cannot.
- cobrabyte 5y ago
  How this isn't a criminal case is beyond me. The dissenting judge is correct: if there is no monetary penalty, what's the point of the judgment?
- Chris2048 5y ago
  If corps are people, maybe they should receive jail sentences as such - and then their executives & beneficial owners can carry them out based on liability. A CEO that takes full control and makes a one-man-shop would therefore be fully liable for any sentence received, and can only avoid this be sharing control.
  - leesalminen 5y ago
    So if I were to own 1 share of $AMZN, I’d be criminally liable for anything the corporation does? Would I do 10 minutes in jail or something?
    - DoctorOW 5y ago
      I don't think you're liable for any of Amazon's decisions. Maybe if you voted yes on "Engage in crime" but the decisions of executives are their own.
      - leesalminen 5y ago
        That makes more sense. Maybe I was reading into the parent’s use of the term “beneficial owners”. Every shareholder of a public corporation is a “beneficial owner”.
swiley 5y ago
This is what the chargeback feature of credit cards is for.
legitster 5y ago
> First, according to the FTC, MoviePass’s operators invalidated subscriber passwords while falsely claiming to have detected “suspicious activity or potential fraud” on the accounts. MoviePass's operators did this even though some of its own executives raised questions about the scheme, according to the complaint. I'm going to go out on a limb and say the only reason the FTC was able to establish intent was because someone complained via email or text. I try not to think about how much illegal activity like this happens all the time that is not prosecutable just because everyone with a modicum of morals was smart enough not to say anything on record.
- judge2020 5y ago
  Yep - i'd be surprised if even a tenth of all white-collar crime is known about.
  - lotsofpulp 5y ago
    Being able to converse in person off the record is one of the big value propositions of being in the bigger cities.
  - phkahler 5y ago
    I thought white-collar crime was usually a person scamming a company. This is a company scamming their customers, which I think happens far more than 10x what we hear about. Way back in the 90's I had a bank account that paid something like 5 percent interest, but only had a couple thousand dollars in it (maybe). I was between jobs and made no deposits for over a month - only withdrawals and only like 4 of them. I got to wondering about the interest and calculated it various ways. Calling the bank, they confirmed verbally that they use the average daily balance. By my calculations they exactly used the final balance (the minimum for the month). I concluded that someone somewhere realized that changing from "average" to "minimum" would make the bank a few extra bucks. Not a big difference if your balance is fairly stable, but a big deal if it's more volatile. They eventually got bought out a couple times, and interest rates are a joke now anyway.
    - 5y ago
cs702 5y ago
It appears the MoviePass master plan for world domination was inspired by the underpants gnomes of South Park[a]: Step 1. Charge customers $10/month for unlimited passes to movie theaters Step 2. Change passwords to prevent customers from getting their passes Step 3. ??? -- [a] https://www.youtube.com/watch?v=tO5sxLapAts https://www.youtube.com/watch?v=tO5sxLapAts
- Chris2048 5y ago
  But if that where the case, they could just recover their passwords? From the sound of the "suspicious activity" line, it seems they may have been blocked? Also, I wonder how the corp avoided chargebacks
- richardwhiuk 5y ago
  Also relevantly: https://www.youtube.com/watch?v=YBO_7UezpbY https://www.youtube.com/watch?v=YBO_7UezpbY
- kingaillas 5y ago
  Matt Levine's summary in his current newsletter is this: "So at some point the company looked for ways to make this insane business model work, and it found one. It’s pretty simple: What if MoviePass collected your $10 each month and then, when you asked it for movie tickets, it ignored you? Then it could keep collecting your $10 a month without spending money on tickets. Eventually you’d get annoyed by not getting what you paid for, and you’d try to cancel your membership and get your money back, but MoviePass could ignore that too and keep collecting the $10. Giving people unlimited movie tickets for $10 a month is a good way to get rapid customer growth; telling people you’ll give them unlimited movie tickets for $10 a month, but not actually doing it, is a way to pivot to profitability." And the way they ignored you was even worse - changing the passwords on their highest volume users. Anyway, it's a great read. Subscribe, it is a fantastic free newsletter. Past awesome coverage included the RobinHood stock hijinks. (Bloomberg's Money Stuff newsletter, sub here: https://www.bloomberg.com/account/newsletters/money-stuff https://www.bloomberg.com/account/newsletters/money-stuff)
  - 5y ago
lacraig2 5y ago
Amazing. Makes me glad I signed up with PayPal. Near the end there so many people were cancelling that if you used a credit card they would, without your consent or interaction, start your service up again. https://www.mentalfloss.com/article/559352/moviepass-reinstating-charging-cancelled-subscribers https://www.mentalfloss.com/article/559352/moviepass-reinsta...
vmception 5y ago
> will be barred from misrepresenting their business and data security practices Bahahahahahaha I need that lawyer
smaili 5y ago
Couldn't users just go through the reset password flow or did MoviePass disable that as well? Not saying this isn't bad just trying to understand how far MoviePass went to stop users.
- ivan888 5y ago
  Not sure, but I would be happy if this case was brought even if users were still able to reset their passwords to access the service. This would mean that the FTC takes dark patterns that attempt to prevent a customer's rightful use of a service seriously. If MoviePass had concerns about losing money on customers who had not violated any terms, the right thing to do would be to re-evaluate their plans/pricing.
- deleted 5y ago
  [deleted]
JMTQp8lwXL 5y ago
Unpopular opinion, but MoviePass could have survived a lot longer if they had more funding. I think there could have been a real opportunity with establishing themselves the main funnel to getting consumers to physical theaters. They couldn't hold on long enough to see what could be possible with such a moat.
- s_dev 5y ago
  They could never survive -- their customer demand came from selling $10 movie tickets for $9 -- funded entirely by investor burn. A sustainable business is one where you sell cinema tickets for $11 having bought them for $10 with the customer choosing you because you've added more than $1 in value for them. It's a car racing down a hill. The acceleration looks exponential but it's just going to crash.
  - Sohcahtoa82 5y ago
    I always assumed that MoviePass's endgame was to funnel so many of the ticket sales through them that they could strong-arm the theaters into lowering their ticket prices. They thought if they captured the movie ticket sales market, they could tell the theater "Start allowing us to pay only $2/ticket or we'll remove you from our app and you won't make ANY sales!" I could be totally talking out my ass, but that's what I always figured. I don't see how else they could be profitable.
  - asciident 5y ago
    It was more like them selling $300 of movie tickets (I'd watch one a day) for $10. Everyone only used them for the arbitrage.
- jermaustin1 5y ago
  MoviePass could have survived longer if they had more money, and a different business model. The problem is they were letting you go to movies at AMC and Cinemark for less than they bought the tickets, and both AMC and Cinemark said they wouldn't negotiate lower prices for them. They could have had a small but cult business contracting with smaller theater chains, but they didn't. They could have also bought tickets in bulk, and sold them through the app, but they didn't. They could have reserved tickets at premiers and sold them at a markup, but they didn't. They could have done a LOT of things to make money, but they didn't. I say this as a onetime holder of more than 1% of publicly available shares. And I think at the time, one of the largest non-institutional shareholders. Lost a lot of money on wanting a dumb "title".
granshaw 5y ago
Classic tactic, similar to insurance companies who advertise great service but throw every caveat in the book at you when you actually file a claim, such that you can’t get to use, you know, what you actually paid for… There has to be a term for this?
- leephillips 5y ago
  Yes, it’s called a “contract”.
- jermaustin1 5y ago
  There is... fraud.
totesraunch 5y ago
"Under the proposed settlement, MoviePass, Inc ...will be barred from misrepresenting their business and data security practices." Isn't this how things are supposed to be from the onset? That'll teach 'em!
- jrockway 5y ago
  Hey now, the government isn't messing around: > violation of such an order may result in a civil penalty of up to $43,792 Oh. I think it would actually be more punitive to literally slap them on the wrist.
  - effingwewt 5y ago
    And this here is the sad reason why these schemes will always happen. It's simply more profitable for them to pay the negligible fines/fees. I'd bet dollars to donuts this would change immediately if there were criminal liabilities involved. But since corporations are rich people who face no repercussions and who can limitlessly lobby to craft laws bespoke to them, I don't see that happening any time soon.
nullbyte 5y ago
For a subscription based business, that’s just extremely unethical
anticristi 5y ago
The analogy with Netflix's DVD-by-mail throttling is astonishing. Same fraud but "done with computers". https://en.m.wikipedia.org/wiki/Criticism_of_Netflix https://en.m.wikipedia.org/wiki/Criticism_of_Netflix
question000 5y ago
Yes PNC Bank also does this, I bet they have hacks that they don't want to disclose and just want to smooth over the problem.
bredren 5y ago
Sounds like the FTC has drawn a hard line on dark patterns. Hopefully, they wake up to other deceitful, anti-consumer design patterns.
Leary 5y ago
I signed up for Moviepass the month they came out. Canceled the month they started to have blackouts. Great deal, would do again if any VC wants to try again for the goodness of the movie industry.
- oplav 5y ago
  I had a similar experience. Got to see lots of movies in a small, comfortable (and expensive) NYC theater while always pre-picking my seats.
- jedberg 5y ago
  AMC has a similar program. It's not as good, but if you like movies and have the time, it's still a good deal.
- Gunax 5y ago
  I believe the first blackout was during the release of 'It'. Of course they never called it a blackout... they just always seemed to experience technical issues... and always on Friday or Saturday... on always on a Friday or Saturday when a popular movie was being released. What a coincidence!
bdefore 5y ago
I owe a debt of gratitude to MoviePass. Their shenanigans led me to learn about virtual credit cards (privacy.com in my case). I'll never be surprise billed by a subscription service again.
- Cu3PO42 5y ago
  Unfortunately, privacy.com is only available in the US. I had been looking for an alternative for quite some time, but recently I stumbled onto the fact that Wise (formerly TrasferWise) will give you a seemingly unlimited amount of virtual cards if you open an account with them. As far as I can tell this isn't documented on their website, but I can definitely get new cards on demand and disable them as necessary. In fact, their website still mostly references MasterCard, however I have received a physical Visa card and the virtual cards are all Visa as well. This isn't as sophisticated an offering as privacy.com because you can't set a fixed limit per card, but it's a lot better than nothing.
  - ozym4nd145 5y ago
    I believe Wise has a limit of upto 3 virtual cards. Are you able create more? source: https://www.kasareviews.com/wise-debit-card-review-pros-cons https://www.kasareviews.com/wise-debit-card-review-pros-cons
    - Cu3PO42 5y ago
      I have three now and the UI to create more is still available. It's possible that clicking on it would fail (I don't want to needlessly waste card numbers), but I have definitely verified that replacing card details works: there is a button that lets you invalidate an existing card and create a new one. In that sense it may be limited in the amount of cards you can have at once, but unlimited in the number of card details you could go through.
  - deleted 5y ago
    [deleted]
- arbitrage 5y ago
arbitrage 5y ago
okay, but like ... don't we sign away any right to care in the T&C/EULA of services? or like when you go to a baseball game, this ticket can be revoked at any time for any or no reason. like, it's their company and service, they can do what they want with their data. why is the FTC getting involved here?
DrBenCarson 5y ago
I thought I was just terrible with using my password manager…. This happened to me at least a couple times back in 2016 when I was seeing 2+ movies with MoviePass. I would get to the movie theater and all of a sudden be locked out. I would need to reset my password standing on the curb waiting to get a damn email over 500kbps LTE. Good to know it wasn’t my fault and that the public in general is now aware of this behavior.
dwighttk 5y ago
Weird. I was using MoviePass right at the end and they didn’t need to change my password, they just limited what movie and time I could use my card so much it stopped being worth the trouble. I guess they could have changed my password to keep me from canceling…
deleted 5y ago
[deleted]

309 points by aarestad 5y ago

That's amazing. Matt Levine covered it in his column today as well--haven't had time to read it yet, but it's probably good as usual https://www.bloomberg.com/opinion/articles/2021-06-08/moviepass-changed-some-passwords https://www.bloomberg.com/opinion/articles/2021-06-08/moviep...

justusthane 5y ago
I suspect you're downvoted for recommending something you didn't read, but yes, it is very good: > If you sell $20 worth of movie tickets for $10, people will sign up, you will have rapid user growth and you can probably get someone to think that that’s valuable, even though in fact every user that you add costs you $10. > But — unlike most of the “MoviePass economy” — MoviePass was not actually a venture-funded startup, did not raise piles of money, and was somewhat constrained by economic reality. So at some point the company looked for ways to make this insane business model work, and it found one. It’s pretty simple: What if MoviePass collected your $10 each month and then, when you asked it for movie tickets, it ignored you? Then it could keep collecting your $10 a month without spending money on tickets. Eventually you’d get annoyed by not getting what you paid for, and you’d try to cancel your membership and get your money back, but MoviePass could ignore that too and keep collecting the $10. Giving people unlimited movie tickets for $10 a month is a good way to get rapid customer growth; telling people you’ll give them unlimited movie tickets for $10 a month, but not actually doing it, is a way to pivot to profitability.
- jcwayne 5y ago
  Add in a startup fee and it would be a gym membership.
- Chris2048 5y ago
  I suspect a lot a corps sub to a similar model: Make it not-obvious when something is billed, and make sure never to tip the customer off (e.g. by sending a monthly invoice). More than one company made it very easy to activate non-obvious reoccurring payments, and then communicate nothing wrt to the fact. On that note: Fuck you NowTV. also non too happy with Paperspace.

lotsofpulp 5y ago

The government knows the executives at MoviePass committed theft, but we will not see any criminal charges filed.

twinkletwinkle_ 5y ago
Crime is a social construct. edit: A poor person who steals is charged. A rich person who steals behind the facade of a company is not. We call the poor person a criminal. It's entirely divorced from an actual moral framework, but simply constructed. I was agreeing with the commenter I replied to.
- mdavidn 5y ago
  So are criminal charges.
  - GIFnotGIF 5y ago
    So are movies.
    - arthurcolle 5y ago
      Movies are real physical artifacts. Calling them a social construct is beyond specious.
      - GIFnotGIF 5y ago
        I was just joining the thread
  - usrusr 5y ago
    And the entire concept of ownership. It's actually quite unbelievable how there can be societies that do have the concept of a death sentence, but don't have the concept of a property nullification sentence. "You may live, but you have to start at zero and any obligation someone might have to you is nullified". The inverse of bankruptcy, basically.

diogenesjunior 5y ago

>“MoviePass and its executives went to great lengths to deny consumers access to the service they paid for while also failing to secure their personal information,” As expected.

0xbadcafebee 5y ago
s/big tech/business/
forgotmysn 5y ago
im not sure id put MoviePass in the same category as FAANG
- mc32 5y ago
  It’s different degrees of abuse. Moviepass committed fraud, and FAANG are not committing that kind of crime, they do engage in sketchy things. The whole ad business model is sketchy, getting people addicted to “binging” on content is questionable, Amz and its commingling issues, copying resellers, it’s terrible review system and well, social media siphoning personal data unscrupulously.... that’s not exactly stand up catagory.
  - forgotmysn 5y ago
    im certainly not defending big tech, but as you say, they have different problems than MoviePass did.
    - mc32 5y ago
      True, Our problem is they don’t think they have a problem when they clearly do.
justapassenger 5y ago
MoviePass was as much as much of a tech company as WeWork. Having a website doesn’t make you a tech company.

Someone1234 5y ago

If a private individual did the things set out here they'd be criminally liable. When a company executive orders employees to do these things, they're not facing any criminal complaint at all (any of them). See also Wells Fargo multiple thefts (both fraudulent accounts with fees, and literally entire homes/all possessions). It is pretty evident that many laws are constructed (e.g. CFAA) wherein there's one rule for individuals and a completely different rule for executives/companies. I understand that the FTC themselves cannot jail people. I don't understand why the justice department cannot.

cobrabyte 5y ago
How this isn't a criminal case is beyond me. The dissenting judge is correct: if there is no monetary penalty, what's the point of the judgment?
Chris2048 5y ago
If corps are people, maybe they should receive jail sentences as such - and then their executives & beneficial owners can carry them out based on liability. A CEO that takes full control and makes a one-man-shop would therefore be fully liable for any sentence received, and can only avoid this be sharing control.
- leesalminen 5y ago
  So if I were to own 1 share of $AMZN, I’d be criminally liable for anything the corporation does? Would I do 10 minutes in jail or something?
  - DoctorOW 5y ago
    I don't think you're liable for any of Amazon's decisions. Maybe if you voted yes on "Engage in crime" but the decisions of executives are their own.
    - leesalminen 5y ago
      That makes more sense. Maybe I was reading into the parent’s use of the term “beneficial owners”. Every shareholder of a public corporation is a “beneficial owner”.

swiley 5y ago

This is what the chargeback feature of credit cards is for.

legitster 5y ago

> First, according to the FTC, MoviePass’s operators invalidated subscriber passwords while falsely claiming to have detected “suspicious activity or potential fraud” on the accounts. MoviePass's operators did this even though some of its own executives raised questions about the scheme, according to the complaint. I'm going to go out on a limb and say the only reason the FTC was able to establish intent was because someone complained via email or text. I try not to think about how much illegal activity like this happens all the time that is not prosecutable just because everyone with a modicum of morals was smart enough not to say anything on record.

judge2020 5y ago
Yep - i'd be surprised if even a tenth of all white-collar crime is known about.
- lotsofpulp 5y ago
  Being able to converse in person off the record is one of the big value propositions of being in the bigger cities.
- phkahler 5y ago
  I thought white-collar crime was usually a person scamming a company. This is a company scamming their customers, which I think happens far more than 10x what we hear about. Way back in the 90's I had a bank account that paid something like 5 percent interest, but only had a couple thousand dollars in it (maybe). I was between jobs and made no deposits for over a month - only withdrawals and only like 4 of them. I got to wondering about the interest and calculated it various ways. Calling the bank, they confirmed verbally that they use the average daily balance. By my calculations they exactly used the final balance (the minimum for the month). I concluded that someone somewhere realized that changing from "average" to "minimum" would make the bank a few extra bucks. Not a big difference if your balance is fairly stable, but a big deal if it's more volatile. They eventually got bought out a couple times, and interest rates are a joke now anyway.
  - 5y ago

cs702 5y ago

It appears the MoviePass master plan for world domination was inspired by the underpants gnomes of South Park[a]: Step 1. Charge customers $10/month for unlimited passes to movie theaters Step 2. Change passwords to prevent customers from getting their passes Step 3. ??? -- [a] https://www.youtube.com/watch?v=tO5sxLapAts https://www.youtube.com/watch?v=tO5sxLapAts

Chris2048 5y ago
But if that where the case, they could just recover their passwords? From the sound of the "suspicious activity" line, it seems they may have been blocked? Also, I wonder how the corp avoided chargebacks
richardwhiuk 5y ago
Also relevantly: https://www.youtube.com/watch?v=YBO_7UezpbY https://www.youtube.com/watch?v=YBO_7UezpbY
kingaillas 5y ago
Matt Levine's summary in his current newsletter is this: "So at some point the company looked for ways to make this insane business model work, and it found one. It’s pretty simple: What if MoviePass collected your $10 each month and then, when you asked it for movie tickets, it ignored you? Then it could keep collecting your $10 a month without spending money on tickets. Eventually you’d get annoyed by not getting what you paid for, and you’d try to cancel your membership and get your money back, but MoviePass could ignore that too and keep collecting the $10. Giving people unlimited movie tickets for $10 a month is a good way to get rapid customer growth; telling people you’ll give them unlimited movie tickets for $10 a month, but not actually doing it, is a way to pivot to profitability." And the way they ignored you was even worse - changing the passwords on their highest volume users. Anyway, it's a great read. Subscribe, it is a fantastic free newsletter. Past awesome coverage included the RobinHood stock hijinks. (Bloomberg's Money Stuff newsletter, sub here: https://www.bloomberg.com/account/newsletters/money-stuff https://www.bloomberg.com/account/newsletters/money-stuff)
- 5y ago

lacraig2 5y ago

Amazing. Makes me glad I signed up with PayPal. Near the end there so many people were cancelling that if you used a credit card they would, without your consent or interaction, start your service up again. https://www.mentalfloss.com/article/559352/moviepass-reinstating-charging-cancelled-subscribers https://www.mentalfloss.com/article/559352/moviepass-reinsta...

vmception 5y ago

> will be barred from misrepresenting their business and data security practices Bahahahahahaha I need that lawyer

smaili 5y ago

Couldn't users just go through the reset password flow or did MoviePass disable that as well? Not saying this isn't bad just trying to understand how far MoviePass went to stop users.

ivan888 5y ago
Not sure, but I would be happy if this case was brought even if users were still able to reset their passwords to access the service. This would mean that the FTC takes dark patterns that attempt to prevent a customer's rightful use of a service seriously. If MoviePass had concerns about losing money on customers who had not violated any terms, the right thing to do would be to re-evaluate their plans/pricing.
deleted 5y ago
[deleted]

JMTQp8lwXL 5y ago

Unpopular opinion, but MoviePass could have survived a lot longer if they had more funding. I think there could have been a real opportunity with establishing themselves the main funnel to getting consumers to physical theaters. They couldn't hold on long enough to see what could be possible with such a moat.

s_dev 5y ago
They could never survive -- their customer demand came from selling $10 movie tickets for $9 -- funded entirely by investor burn. A sustainable business is one where you sell cinema tickets for $11 having bought them for $10 with the customer choosing you because you've added more than $1 in value for them. It's a car racing down a hill. The acceleration looks exponential but it's just going to crash.
- Sohcahtoa82 5y ago
  I always assumed that MoviePass's endgame was to funnel so many of the ticket sales through them that they could strong-arm the theaters into lowering their ticket prices. They thought if they captured the movie ticket sales market, they could tell the theater "Start allowing us to pay only $2/ticket or we'll remove you from our app and you won't make ANY sales!" I could be totally talking out my ass, but that's what I always figured. I don't see how else they could be profitable.
- asciident 5y ago
  It was more like them selling $300 of movie tickets (I'd watch one a day) for $10. Everyone only used them for the arbitrage.
jermaustin1 5y ago
MoviePass could have survived longer if they had more money, and a different business model. The problem is they were letting you go to movies at AMC and Cinemark for less than they bought the tickets, and both AMC and Cinemark said they wouldn't negotiate lower prices for them. They could have had a small but cult business contracting with smaller theater chains, but they didn't. They could have also bought tickets in bulk, and sold them through the app, but they didn't. They could have reserved tickets at premiers and sold them at a markup, but they didn't. They could have done a LOT of things to make money, but they didn't. I say this as a onetime holder of more than 1% of publicly available shares. And I think at the time, one of the largest non-institutional shareholders. Lost a lot of money on wanting a dumb "title".

granshaw 5y ago

Classic tactic, similar to insurance companies who advertise great service but throw every caveat in the book at you when you actually file a claim, such that you can’t get to use, you know, what you actually paid for… There has to be a term for this?

leephillips 5y ago
Yes, it’s called a “contract”.
jermaustin1 5y ago
There is... fraud.

totesraunch 5y ago

"Under the proposed settlement, MoviePass, Inc ...will be barred from misrepresenting their business and data security practices." Isn't this how things are supposed to be from the onset? That'll teach 'em!

jrockway 5y ago
Hey now, the government isn't messing around: > violation of such an order may result in a civil penalty of up to $43,792 Oh. I think it would actually be more punitive to literally slap them on the wrist.
- effingwewt 5y ago
  And this here is the sad reason why these schemes will always happen. It's simply more profitable for them to pay the negligible fines/fees. I'd bet dollars to donuts this would change immediately if there were criminal liabilities involved. But since corporations are rich people who face no repercussions and who can limitlessly lobby to craft laws bespoke to them, I don't see that happening any time soon.

nullbyte 5y ago

For a subscription based business, that’s just extremely unethical

anticristi 5y ago

The analogy with Netflix's DVD-by-mail throttling is astonishing. Same fraud but "done with computers". https://en.m.wikipedia.org/wiki/Criticism_of_Netflix https://en.m.wikipedia.org/wiki/Criticism_of_Netflix

question000 5y ago

Yes PNC Bank also does this, I bet they have hacks that they don't want to disclose and just want to smooth over the problem.

bredren 5y ago

Sounds like the FTC has drawn a hard line on dark patterns. Hopefully, they wake up to other deceitful, anti-consumer design patterns.

Leary 5y ago

I signed up for Moviepass the month they came out. Canceled the month they started to have blackouts. Great deal, would do again if any VC wants to try again for the goodness of the movie industry.

oplav 5y ago
I had a similar experience. Got to see lots of movies in a small, comfortable (and expensive) NYC theater while always pre-picking my seats.
jedberg 5y ago
AMC has a similar program. It's not as good, but if you like movies and have the time, it's still a good deal.
Gunax 5y ago
I believe the first blackout was during the release of 'It'. Of course they never called it a blackout... they just always seemed to experience technical issues... and always on Friday or Saturday... on always on a Friday or Saturday when a popular movie was being released. What a coincidence!

bdefore 5y ago

I owe a debt of gratitude to MoviePass. Their shenanigans led me to learn about virtual credit cards (privacy.com in my case). I'll never be surprise billed by a subscription service again.

Cu3PO42 5y ago
Unfortunately, privacy.com is only available in the US. I had been looking for an alternative for quite some time, but recently I stumbled onto the fact that Wise (formerly TrasferWise) will give you a seemingly unlimited amount of virtual cards if you open an account with them. As far as I can tell this isn't documented on their website, but I can definitely get new cards on demand and disable them as necessary. In fact, their website still mostly references MasterCard, however I have received a physical Visa card and the virtual cards are all Visa as well. This isn't as sophisticated an offering as privacy.com because you can't set a fixed limit per card, but it's a lot better than nothing.
- ozym4nd145 5y ago
  I believe Wise has a limit of upto 3 virtual cards. Are you able create more? source: https://www.kasareviews.com/wise-debit-card-review-pros-cons https://www.kasareviews.com/wise-debit-card-review-pros-cons
  - Cu3PO42 5y ago
    I have three now and the UI to create more is still available. It's possible that clicking on it would fail (I don't want to needlessly waste card numbers), but I have definitely verified that replacing card details works: there is a button that lets you invalidate an existing card and create a new one. In that sense it may be limited in the amount of cards you can have at once, but unlimited in the number of card details you could go through.
- deleted 5y ago
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arbitrage 5y ago

arbitrage 5y ago

okay, but like ... don't we sign away any right to care in the T&C/EULA of services? or like when you go to a baseball game, this ticket can be revoked at any time for any or no reason. like, it's their company and service, they can do what they want with their data. why is the FTC getting involved here?

DrBenCarson 5y ago

I thought I was just terrible with using my password manager…. This happened to me at least a couple times back in 2016 when I was seeing 2+ movies with MoviePass. I would get to the movie theater and all of a sudden be locked out. I would need to reset my password standing on the curb waiting to get a damn email over 500kbps LTE. Good to know it wasn’t my fault and that the public in general is now aware of this behavior.

dwighttk 5y ago

Weird. I was using MoviePass right at the end and they didn’t need to change my password, they just limited what movie and time I could use my card so much it stopped being worth the trouble. I guess they could have changed my password to keep me from canceling…

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