Shocker: MoviePass was shady

MoviePass throttled user accounts so they couldn’t take advantage of the all-you-can-watch offering.

June 17, 2021

Remember MoviePass?

It’s the now-defunct startup that offered unlimited theater movies for a cheap monthly subscription price of $9.95.

Many were skeptical of the business model, which seemed to go against the laws of… math. Well, as The New York Times reports, the startup used shady tactics to survive.

The business math was so bad…

… that MoviePass — which started its wild all-you-can-watch experiment in 2017 — turned into a slow-burning dumpster fire.

Turns out when your costs (full movie ticket price) are significantly higher than your revenue (cheap monthly subscription), business not good.

It culminated in MoviePass’ parent company Helios and Matheson Analytics shutting down the company in 2019 and declaring bankruptcy early last year.

How MoviePass screwed customers

Details of the company’s shady tactics come from a Federal Trade Commission investigation.

To stop people from watching (and slow its cash burn):

  • Account passwords were falsely invalidated for “suspicious activity or potential fraud”
  • A bogus ticket verification process was implemented to create friction

As if this wasn’t enough, MoviePass grossly mishandled customer data. An FTC settlement with the company’s execs is meant to prevent any future business tomfoolery.

Join 1.5m+ professionals getting The Hustle daily news brief

Business and tech news in 5 minutes or less

100% free, no ads or spam, unsubscribe anytime


How'd Bezos build a billion dollar empire?

In 1994, Jeff Bezos discovered a shocking stat: Internet usage grew 2,300% per year.

Data shows where markets are headed.

And that’s why we built Trends — to show you up-and-coming market opportunities about to explode. Interested?

Join us, it's free.

Look, you came to this site because you saw something cool. But here’s the deal. This site is actually a daily email that covers the important news in business, tech, and culture.

So, if you like what you’re reading, give the email a try.

If you don’t like it, unsubscribe any time. Privacy policy.