Sinemia may shutter its movie-subscription services and focus its resources on its SubGen business, which helps theater owners, such as Studio Movie Grill, operate their own subscription services. The news, reported yesterday by Bloomberg, comes as the company faces a growing base of frustrated customers complaining they are unable to use the subscription service to purchase movie tickets. Sinemia is also facing two lawsuits: a class action case accusing the company of pulling a “bait-and-switch” over transaction fees, and a patent infringement claim by competitor MoviePass.
Sinemia did not reply to IndieWire’s request for comment about the Bloomberg report, nor did it respond to other questions about recent changes to its services and fees.
If indeed Sinemia is considering shuttering its subscription services, the decision comes as it makes an aggressive push to lure new customers into yearly subscriptions that require the entire membership cost be paid upfront. At the end of March, Sinema introduced its “Always Unlimited Plan,” which for $14.99 month allowed customers to buy one movie ticket (“any showtime, any theater”) a day. Previously, the company billed as the sober alternative to MoviePass had plans ranging from $7 to $14 a month that allowed customers to buy up to three movie tickets a month.
Within a week of being unveiled, the price tag on “Alway Unlimited” dropped to $9.99 a month, mirroring MoviePass’ “unlimited” plan, which also offered a movie a day and catapulted its subscriber base from 20,000 to 3 million in less than a year. MoviePass’ too-good-to-be-true plan brought upwards of $20 million of debt per month, which financially crippled the company (parent company Helios & Matheson’s stock opened the market today at $.0037 a share).
In an interview with IndieWire last month, Sinemia founder and CEO Rıfat Oğuz explained why his company chose not to follow MoviePass’ “unsustainable” lead when it shocked the industry with its $9.99 unlimited plan in August 2017.
“We didn’t follow [MoviePass’] $9.99,” said Oğuz, in a previously unpublished portion of IndieWire’s interview. “All [of] my investors asked, from the Silicon Valley and Europe, they asked, “Are you gonna do the same?’ and I said, ‘We can’t, because when we calculated, we are in five countries and we know that that’s not gonna sustain.'”
Only days after that interview, Sinemia did end up following the $9.99 unlimited model, and the company made two other key changes that point to a concerted effort to replenish its coffers. Sinemia temporarily dropped the option for customers to pay month to month, and instead required annual subscriptions, the cost of which were paid in full when customers first signed up. In the last few days, Sinemia’s monthly subscriptions have returned, but now come with a hefty $49.99 initiation fee (a $20 increase) to be paid at the time of purchase.
For the first time, Sinemia memberships also had extended activation windows, with customers being told they would have to wait one to two weeks, then two to four weeks, before they could use their “cardless” plans. Tickets can be purchased through a virtual credit card online, rather than physical debt-like card used in theaters. However, new members have been given the option of paying an additional $9.99 for “accelerated activation” – which then increased to $19.99 – if they didn’t want to wait. These activation windows run counter to the logic Oğuz gave for introducing cardless, or virtual card, plans.
“When Moviepass came up with $9.99, it couldn’t send the cards for two-to-three months, so subscribers said, ‘Where’s our cards?,” Oğuz told IndieWire. “When we had the release of plans, like the one movie ticket [a month] starting at $4.29… we found we should turn to virtual cards and we [then] can always give the cards in time.”
For customers looking to avoid Sinemia’s controversial transactional fees that come with cardless online purchases, the company also recently increased the cost of its physical cards. While Oğuz told IndieWire that single user plans would still only be charged $14.99 (or family plans for $29.99) for a physical card, a number of new customers sent IndieWire screengrabs showing the Sinemia’s fee for physical cards costing upwards of $49.
While changes in Sinemia’s offerings would appear to be an attempt to increase its cash flow by luring new customers with under-priced pre-paid yearly plans and increased, or new, upfront fees, the service itself appears to have only gotten worse since IndieWire reported that customers were on unable to purchase tickets in March. Multiple sources tell IndieWire that they have been unable to purchase any tickets in the last two to three weeks, while Sinemia’s Twitter support (@SinemiaSupport) has been responding to hundreds, sometimes thousands, of complaints per day.
To test the service, IndieWire purchased an “Always Unlimited” plan. In over two weeks, we haven’t been able to purchase a single movie ticket with that plan. Notably, a different Sinemia plan registered in this author’s name, which was discussed in the interview with Oğuz, has been successfully used to purchase tickets to the same exact movie showtimes that were denied on the new account. Both smartphones run the same updated version of the Sinemia app. Sinemia customer support has not offered a possible solution to the problem with purchasing tickets on the new plan.