MoviePass has certainly suffered a spectacular fall from grace over the last year and right when you think those involved with the company coild not possibly sink any lower, news like this surfaces. After watching massive numbers of customers cancel their subscriptions and burning through mountains of cash at a jaw-dropping pace, MoviePass executives have been accused of ordering employees to change the passwords for accounts belonging to their most active subscribers. It is not every day when the United States Department of Justice steps in and calls your operation “unethical” but that is exactly what happened to CEO Mitch Lowe.
Back in the Spring of 2018 MoviePass announced an industry shaking change to its subscription service. For $9.99 per month you could watch a movie at the theater nearly every single day. That would be a month’s worth of movie theater tickets for less than what a single movie would cost. The average consumer might stop for a moment and wonder how on Earth this subscription service could be sustainable and then promptly dash off to the theater to see the newest movies.
The problem is that MoviePass was anything but sustainable. You see, the company had to pay the movie theaters full price for every movie you saw through the service. If you took advantage of your subscription and saw a movie every single day in a month then MoviePass would pay out hundreds of dollars on your behalf while only bringing in ten bucks in revenue.
It does not take an account to realize that under these conditions it would not take long for the money to run out and that is exactly what happened. The interesting part is how Mitch Lowe attempted to keep the company afloat.
According to ex-employees of MoviePass, orders from management required them to take a number of drastic steps such as locking about half of their total subscribers out of their plans during the premiere of high profile films like Mission Impossible: Fallout. As one former employee said, “He also ordered that half of subscribers be frozen out the weekend of its release, former employees said. Complaints once again appeared online, leading MoviePass to send out a tweet saying it was “working on a fix towards this technical issue.”
Lowe is also said to have ordered the passwords of the heaviest users be changed so that they could not access the service.
One expert at the Department of Justice did not mince words when talking to Business Insider about the shenanigans happening at MoviePass – even going so far as to describe Lowe’s actions as “certainly unethical and could be illegal.”