In 2018 there was a service that was successful in the United States and that we were dying to try. It was called MoviePass and was known as ‘the Netflix of movie theaters’. Its operation was simple: you paid 10 dollars a month and you could go to the movies as many times as you wanted. What sounds like a dream for any movie buff was actually a bottomless pit of losses, so the company launched a strategy to stop the bleeding. The problem is that it was a directly illegal strategy.
a ruin. First of all, it is worth stopping at the MoviePass business model. For 10 dollars we could see as many movies as we wanted per month, the problem is that the company did not have any type of agreement with movie theaters and in 2017 a ticket cost 12 dollars. That is, they lost 2 dollars a month per user as long as they only went to see a movie. The only way they could generate profits was if their users didn’t watch any movies a month and that’s where their CEO’s brilliant idea came from.
Dark patterns. Are quite tricky design strategies so that it costs us more to cancel an account or encourage us to make a purchase, but MoviePass is another level. They counted on Business Insider in 2019that the company’s CEO Mitch Lowe gave the order to deliberately change the passwords of a group of very active users, thus preventing them from accessing their account and purchasing tickets. Furthermore, he did it just when ‘Avengers: Infinity War’ was released.
reset password. You may be thinking that if they change your password, you reset it and that’s it. It wasn’t that easy. When users tried to recover their accounts, the process failed and it was no coincidence. Bloomberg published fragments of the formal complaint filed by the Federal Trade Commission (FCT), which details that the company knew that the process would fail on most smartphones and nothing was done to prevent it. Faced with this situation, many users contacted customer service, but it usually took weeks for them to respond (that is, if they responded). There are quite a few threads on reddit with users suffering from this situation.
Unscrupulous. The details of how it was carried out are absolutely crazy. They called it the “password breakpoint program” and it was the topic of several meetings and emails, as if it were any other business topic. Furthermore, to avoid possible action by the FCT, they decided that they would only block the accounts of 2% of their most active users (about 75,000) and that the excuse would be that they had detected “suspicious activity or possible fraud.” They also monitored the success of their program: a week later only half of those affected had managed to reset their password.
Consequences. The FCT ended up discovering the cake so it is logical to think that MoviePass had to pay a million-dollar fine. Well no. MoviePass admitted the facts and reached an agreement in which they promised not to repeat it (as if they were trustworthy). The reason is that a court ruling prevented the FCT from imposing fines in such cases.
The company did not survive its terrible business model and In 2019 it closed its doors. In 2020, the parent company filed for bankruptcy. In the end they couldn’t repeat it.
Image | MoviePass, Daniel Dalea in Unsplash
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