Good morning everyone, I hope your weekend is going well. On Thursday, Sinemia posted the following note on their homepage alerting members that they would be ceasing operations in the United States immediately. This happened on opening day of the biggest movie of the year – Avengers: Endgame. This is very disappointing for many reasons (I was a big fan of Sinemia and went to 2-4 movies a month with my monthly plan). After closing my MoviePass account and opening my Sinemia account in August 2018, I’ve seen Sinemia evolve and change in the 6-7 months since then. I thought it would be interesting to review the warning signs and the 7 lessons I learned through the process.
Lesson 1: Unsustainable Prices
When I joined Sinemia in August 2018, here were the various monthly plans. For $9.99 per month, I could see 3 movies. I think my local movie theater charges $8-$10 per movie, so I just had to see 1 movie per month to break even and I would come out way ahead if I saw 2-3 movies per month. Heck, for $3.99 per month, I could see 1 movie per month. I’ve never seen movie tickets $4 or cheaper in my life.
Lesson 2: Pay Monthly, Not Yearly
My brother had a year-long MoviePass card that he got from Costco. A few months after he got his MoviePass card, MoviePass started adding fees and made negative changes to the service. Eventually he cancelled his MoviePass card and got a partial refund from Costco. I learned that I didn’t want to bet on a future service (Sinemia) to be around and stay the same for a whole year, so I would go with a monthly plan and I could cancel if the service was no longer worth the monthly fee.
Lesson 3: Watch for Price Changes & Plan Changes
In November 2018, Sinemia offered weekday only plans that were 20% cheaper than any day plans. Making many changes is a red flag that a service/company is not doing well. On the flip side, if you followed lesson 2 (pay month by month), you could switch from a $9.99 monthly fee to a $8.99 monthly fee if that plan worked better for you.
Lesson 4: New (Hidden) Fees
In October 2018, Sinemia introduced a new fee: $1.80 processing fee per movie ticket, in addition to other online ordering fees. When a service/company starts charging fees in addition to a clear monthly fee, that is another red flag.
Lesson 5: Increasing Fees
In December 2018, Sinemia offered a physical card that would allow you to purchase movie tickets at the theater and avoid the $1.80 per movie ticket fee mentioned in lesson 4 (hidden fees). The fee was originally $14.99, but sometime later, Sinemia increased the fee to $24.99. The fee was multiplied if you had a family plan and several physical cards were needed. Increasing fee prices a few weeks after introducing a fee is another red flag.
Lesson 6: Big Discounts on Gift Cards & Deep Discounted Plans
In December 2018, Sinemia offered gift cards for 30% off face value. This sounds like a great idea, or a Ponzi scheme to get cash into the business to keep the service/business running. If you followed lesson 2 (paying month by month), you would not have bought a high dollar amount gift card. Offering big discounts should be another red flag.
Very ironically, Sinemia recently sold “Limitless” membership plans with the tag line “It’s Come To An End”. These plans were offering a 50% discount, which should be an even bigger red flag that Sinemia was becoming a Ponzi scheme and needed more cash to keep the service/business running.
Lesson 7: Enjoy the Service While it Lasts
Last but not least, I rode the MoviePass bandwagon for a long time and saw how quickly a service/company could go from unbelievably popular to hated by almost all members. I believe it only took MoviePass 1-2 months to completely screw its members. When I heard about Sinemia, I had a sense of deja vu and knew a service like this could not last forever. Anytime there was a negative change, I would evaluate the new cost of doing business. I would add up the monthly fees + service fees + hidden fees and divide that by the number of movies I watched per month to get an average cost per movie. As long as the average cost per movie was cheaper than what I would pay without Sinemia, I justified it as “I’m still coming out ahead.” But like most great things in life, everything has to come to an end and most things do not end quietly/peacefully.
I don’t hold any negative feelings toward MoviePass or Sinemia, they worked well for a while and I saw a ton of movies very cheaply. If the services/businesses were managed better, I believe these companies could have survived, but they were victims of their own successes. The bigger they got, the less profitable they got, which is not sustainable for any business. Not to mention the countless lawsuits filed against both companies.
Next time there is a new service that is “too good to be true,” I will keep these 7 lessons in mind to minimize any big losses. Are there any lessons you learned from MoviePass or Sinemia? Please share them in the comments section. Have a great weekend everyone!