MoviePass has come to disrupt the theatrical viewing industry. That’s not a bold or controversial statement to make, it’s pretty clear. I’ve written before about how the app has innovated in a way the major chains haven’t and gained some form of competitive advantage for that. The conversations around and pushback to MoviePass from the industry is *very* similar to where we were with Uber and Lyft a few years ago, with the legacy companies not very happy that another party hasn’t been as complacent has they have.

It comes down to this: MoviePass wants to apply a whole different viewership model than theaters do, one that lowers the barrier to entry significantly and also reduces the perceived risk in the minds of the audience of making the wrong call. Choosing a movie you wind up not liking when you paid $25 for two tickets feels like huge and could make you think twice about doing so again. Choosing a movie you paid an incremental amount of a $10 monthly membership fee is more likely to be shrugged off, and you’ll make a different choice next time but whatever, it’s fine.

That’s the Netflix model. Many of the movies there are great but a good number are “fine…sure…I liked it.” The pain of making a bad choice has been reduced because while you still spent 90-140 minutes of your life on it, at least you didn’t shell out additional money.

And now the company is feeling a bit charged. It survived a tussle with AMC Theaters relatively unscathed and has seen consistent user growth. Now, it seems, it wants to show everyone how serious it is about making money for itself, even if the theater chains complain it’s still not working for them.

Last week it shot another cannonball over the bow of the movie industry when it seemed to withhold tickets to the Jennifer Lawrence spy drama Red Sparrow in some markets. While a company statement made vague comments about how subscribers should always check availability before making their plans, the move was widely seen as holding 20th Century Fox out a window until it understood the power the service has. “Buy ads on our app or we’ll have to start breaking things,” the message seems to have been.

Now, comments reportedly made by MoviePass CEO Mitch Lowe not only touted its expected growth – he claims it will hit 5 million members by the end of the year – but brag about the level of tracking the app will do of those users. Lowe talked about being able to create holistic and detailed profiles of users’ activity at home as well as before and after they go to the movies. That data, he said, won’t be sold to others but used to better target ads that are sold on that app.

Lowe obviously feels he has the upper hand here, that the company has weathered its first couple storms, has some momentum and will leverage that to do what it will. Unfortunately for him, the waters aren’t quite as smooth ahead as he seems to think for a number of reasons.

That User Base May Not Be Solid

MoviePass has been plagued by customer support issues. As the app has grown it doesn’t seem it scaled operations to deal with problems that cropped up and has been slow to respond to the problems customers have had. Chief among them is that the app seems to break with every new update. Countless people I’ve seen have complained that updates result in account information being removed from the app with no recovery mechanism. If it wants to keep growing it’s going to have to 1) Put adequate support systems in place to address user concerns and 2) Stop letting developers solely dictate the customer experience.

People Are Waking to Datamining

To borrow a phrase that’s been used frequently in regards to politics: You’re not supposed to say the quiet part out loud. That’s what Lowe did regarding user behavior tracking. But more and more people, particularly in the wake of all the controversy and conversation around the way ads by foreign powers were targeted during the 2016 election cycle, are suddenly wary of the data that’s being collected on them and used to push ads at them. While it’s good, I suppose, that MoviePass doesn’t have any plans *at this time* to sell that data to other parties that doesn’t mean it won’t a month from now. This sort of brazen touting of your tracking abilities is the opposite of what people want to hear right now. (Update: The company has updated the app and removed some tracking capabilities. The qualifier “unused” in that note is doing a lot of heavy lifting, though, and could be interpreted in any number of ways.

The Hostages Are Your Customers

“Awfully nice movie you have here, Fox. Be a shame if anything happened to it.”

While there’s no public evidence MoviePass used the Red Sparrow ticket availability as leverage with Fox, neither of those parties like felt any actual pain from that situation. There may have been a few people who opted for another movie or some other form of entertainment when they couldn’t buy those tickets through MoviePass, but I’m guessing the number was relatively small. But what perception of the service do those customers, as well as those who couldn’t buy tickets to their preferred AMC theater during that squabble, have of the service now? If MoviePass continues to, without warning, randomly cut segments of the audience off from the movies they want to see it will only create an environment of mistrust that will damage long-term reputation and adoption.

Remember, Thou Art Mortal

The ride-hailing industry may count Uber as its highest profile member, but it’s not alone. So it’s hard to believe MoviePass won’t have its throne challenged by any number of other companies in the near future. Indeed it knows its position is vulnerable and has decided that instead of competing it’s going to sue rivals that emerge based only on the idea that the concept is similar. That kind of behavior can only last so long. The company would do well to add a dose of humility to its culture.

There’s lots that’s good about MoviePass. The incremental cost model has a lot of potential since, again, it removes a substantial amount of the sting that can be felt in the wake of making a bad movie choice. But it also faces significant hurdles – many of its own making – on the road ahead.

Chris Thilk is a freelance writer and content strategist who lives in the Chicago suburbs.

Written by Chris Thilk

Chris Thilk is a freelance writer and content strategist with over 15 years of experience in online strategy and content marketing. He lives in the Chicago suburbs.

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