Former MoviePass CEO Was Well Aware That The $9.95 Unlimited Subscription Plan Was A ‘Temporary Marketing Gimmick’ To Drive Subscriber Growth
Five years ago, MoviePass, the subscription-based movie-ticketing service, was acquired by Helios and Matheson Analytics, and the monthly cost was reduced to $9.95. The plus side was that the $10 fee did not have any limitations as to how many movies subscribers could view in a month, with the plan being unlimited. What sounded like a dream come true for millions who would rack up a hefty bill going to watch movies at theaters turned out to be a financial disaster, with former CEO Mitch Lowe admitting that the $9.95 amount was a temporary marketing gimmick.
MoviePass was bleeding money because of its unlimited $9.95 plan, with ex-CEO stating that the intention behind it was to increase subscriber growth rapidly
Lowe has pleaded guilty to securities fraud, and according to Variety, he faces up to five years in federal prison for the crime. In short, MoviePass’ former Chief Executive withheld information from investors and the public that the $9.95 unlimited plan was financially unviable, causing the company to hemorrhage millions in funds and eventually shutter its doors in 2019. It was also revealed that Lowe attempted to alleviate the losses by forcing high-volume users to reset their passwords and verify their tickets.
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An estimate of the losses was discovered from Lowe’s plea agreement, with the U.S. government believing that MoviePass burned through a whopping $303 million. In addition to serving a 5-year prison sentence, Lowe also has to pay a $250,000 fine, but since he has agreed to cooperate with the authorities, the sentence could be reduced. Lowe’s lawyers, Margot Moss and David Oscar Markus have also stated that the former CEO has taken full responsibility for his actions and will attempt to rectify the mistakes that he has committed.
After a tumultuous run, MoviePass rose from the ashes, with Stacy Spikes, a former founder and
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