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There are some companies who thrive in subscription based services. Cord cutters rebel against traditional cable companies and instead opt for Netflix or Hulu of Amazon or HBO or Showtime or…you get the idea. Beyond entertainment there’s meal delivery like Blue Apron and HomeFresh. Don’t feel like switching out your toothbrush every few months or buying toothpaste? Quip has you covered.
What hasn’t fared well has been movie theater subscriptions. The likes of MoviePass and Sinemia aren’t flopping like a fish on dry land, they’re rotting and stinking up the shoreline. As Flixist reported earlier this month, MoviePass is down 90% in membership over the past twelve months. Their constant change in the available options, blackouts, and complete lack of support are the easiest areas to point fingers. With MoviePass gasping for air, Sinemia tried playing savior, but the results turned out the same.
Insanity is repeating the same thing and expecting different results. Sinemia took no lesson from MoviePass’ failings save for one. Sinemia’s $10 subscription was limited to three movies a month instead of one per day, but that model is still foolish from a money-making standpoint. For myself and the theaters around me, no ticket is ever less than $11. So even if I were to go to only one movie a month, they’d still be losing money on my subscription. The gym membership business model does not translate to movie theaters.
As Avengers: Endgame brought in record numbers for an opening weekend, Sinemia abruptly announced its closure in the United States. Here’s what pops up when you visit their site:
“Dear Customer,
Today, with a heavy heart, we’re announcing that Sinemia is closing its doors and ending operations in the US effective immediately.
As Sinemia, we set out our journey with the vision to help as many moviegoers as possible to enjoy an affordable and better experience at the movies by a creating a movie ticket subscription service that adds value for both the moviegoers and the movie industry. Since 2014, we’ve been fine-tuning our model and serving movie-goers with a slate of affordable and flexible subscription plans.
We are all witnessing that the future of moviegoing is evolving through movie ticket subscriptions. However, we didn’t see a path to sustainability as an independent movie ticket subscription service in the face of competition from movie theaters as they build their own subscriptions. Thanks to the cost advantage and cross-sell opportunities, movie theaters will be prominent in the movie ticket subscription economy.
While we are proud to have created a best in market service, our efforts to cover the cost of unexpected legal proceedings and raise the funds required to continue operations have not been sufficient. The competition in the US market and the core economics of what it costs to deliver Sinemia’s end-to-end experience ultimately lead us to the decision of discontinuing our US operations.
Despite the best efforts of our team, it has been difficult for us as a start-up to continue providing our services to the moviegoers in the US without resources and enough capital to meet increased operations and legal costs.
We want to sincerely thank our customers that believed in us and helped us along the way for their love and support.
We are so grateful to have had the opportunity to share our dream with you.
Sinemia Inc.”
Two key takeaways. First, the shutdown was in large part due to customer blowback about the service’s failure to be used with any kind of confidence by a subscriber and the ensuing legal implications it faced. Second, they flat out said they can’t afford to continue their service. Unlike MoviePass, Sinemia is privately held and not as easily able to generate bridge funds to sustain periodic financial shortcomings. Even though Sinemia didn’t offer an unlimited option like its competitor, the usage outweighed the non-users.
So with a puff of smoke, Sinemia is finished. What subscribers (myself included) are waiting on is whether or not there will be a refund, as the service required a yearly fee up front. At this time no announcement has been made in that regard. For what it’s worth, there have been a few redditors who claim to have successfully worked with their bank or credit card company to reverse the charge when Sinemia couldn’t provide the promised service, but not all may be that lucky. If Sinemia doesn’t issue refunds, there is bound to be a lawsuit or two in the coming future.
So what have we learned? Basic understanding of economics aside, movie theaters were not interested in forming a partnership, and stuck firm to their belief. Had a large chain partnered with either company, the subscription service would’ve pushed people to that specific theater, potentially garnering more income in concession sales, while Sinemia or MoviePass would hope for a discount on tickets to ease their financial pains.
Alas a partnership never formed, and as both services struggled to stay remotely afloat the weight of paying full price for hundreds of thousands of tickets was never going to be something that was sustainable. Who knows that these services were expecting when they started out. The common theme of replicating the gym membership wasn’t ever going to be a thing, because going to the gym sucks, but going to the movies does not. A simple copy/paste isn’t exactly a bona fide way of operating a business in an entirely different industry.
It’s safe to say, at this time, the only movie theater subscription that’s unlikely to cause grief, anger, and sudden changes to their Terms of Service are those available with a specific theater, like AMC’s A-List. I went in on MoviePass, then the sparkling Sinemia alternative that ended up being just as poorly run and my lesson was learned. In the words of the immortal Michael Scott, “fool me once, strike one. Fool me twice…strike three.”
