The Costly Mistakes of Moviepass

Moviepass’s journey is a cautionary tale for startups and established companies alike. While the company enjoyed a moment in the spotlight with its low-cost movie subscription model, it faced numerous challenges that ultimately led to its downfall. Among the most alarming errors was the way the restructured plans were rolled out, which was fraught with strategic missteps and unsustainable business practices. This article delves into Moviepass’s biggest mistakes and why they doomed the company from the start.

Failure to Adopt a Customer-Centric Approach

One of the most glaring errors Moviepass made was its failure to prioritize a customer-centric approach. The company’s business model and branding did not emphasize the needs and preferences of its users. This misguided focus on cost-cutting measures at the expense of user satisfaction was a critical flaw that undermined the company’s long-term viability.

Unsupported Plan Rollout

The biggest mistake Moviepass made was how it rolled out its new plans. The company burst onto the scene with its low-cost model, but without adequate preparation or transitional measures. Were I to advise the company, I would have recommended a beta period during which a lower but more reasonable-price plan could have been offered. In this period, no marketing would have been conducted, and the company would have relied on media coverage and word-of-mouth to attract potential users.

During this beta phase, it would be essential to gather data on usage patterns and determine the optimal pricing and usage frequency that would ensure the model’s sustainability. The customer acquisition cost (CAC) would have been covered by the company and would not require a loss-leadership strategy.

Selling a Product at a Massive Loss

Many companies sell new ideas and concepts at a loss to gain market share, with the hope of eventually becoming profitable. Companies like Netflix, Amazon, and Facebook have successfully employed this strategy. However, Moviepass’s approach was neither sustainable nor advisable. The company never had a realistic path to profitability, which became apparent as soon as a single movie was watched each month.

For Moviepass to achieve profitability, customers would need to use the service sporadically, and the company would benefit only from those who forgot they had a subscription. This is a model that is inherently unsustainable and difficult to scale. It begs the question: Why did Moviepass attempt such a strategy?

Conclusion

Moviepass’s business strategy was built on unsustainable principles that doomed the company from inception. The company’s failure to adopt a customer-centric approach and its flawed plan rollout ultimately led to its demise. While there are valuable lessons to be learned from its mistakes, it is crucial for businesses to prioritize long-term sustainability over short-term gains. The key to success lies in carefully assessing the potential market and ensuring that a business model can not only attract users but also remain profitable in the long run.

Related Keywords: moviepass, business strategy, subscription model