While MoviePass continues to experiment with ways to prevent going out of business, competing movie theater subscription service Sinemia is calling it quits ahead of what is shaping up to be one of the biggest theatrical events of all time.
Just as Avengers: Endgame has started breaking box office records on its first day, Sinemia says it is ceasing operations in the US due to mounting pressure from competing subscriptions from theater chains and legal action brought against the company for its pricing tactics. The news confirms a report from Bloomberg earlier this week that said Sinemia was considering closing its consumer business to focus more on building membership programs for existing theater chains.
“Today, with a heavy heart, we’re announcing that Sinemia is closing its doors and ending operations in the US effective immediately,” the company said in a statement that pops up when you visit its website. “While we are proud to have created a best in market service, our efforts to cover the cost of unexpected legal proceedings and raise the funds required to continue operations have not been sufficient. The competition in the US market and the core economics of what it costs to deliver Sinemia’s end-to-end experience ultimately lead us to the decision of discontinuing our US operations.”
Sinemia initially launched in 2014 in Turkey, but the service barely gained any traction until long-running competitor MoviePass made the radical decision to dramatically lower its prices in August 2017. Sinemia quickly followed suit with similarly too-good-to-be-true subscription plans that would let you basically see movies for free, so long as you paid up front and actually followed through with reserving tickets through the platform. Sinemia resisted going the unlimited route, but it did essentially sell discounted movie tickets as part of a monthly subscription. (The company did eventually try offering various unlimited plans over the last six months, including one that was just a prepaid card worth $100 that Sinemia charged just $70 for.)
Like MoviePass, Sinemia’s business model wasn’t the most airtight. The entire idea of a theater subscription service was predicated on three risky gambles. The first is that some people would pay for the service and never use it, helping afford those that did, somewhat like a gym membership. That proved not to be the case because seeing a movie, it turns out, is easier and more enjoyable than strenuous physical activity. (MoviePass has only stayed afloat so long because it’s made its service prohibitively difficult to use, blocking access to certain theaters and films using arcane logic and imposing a Kafkaesque series of restrictions on its subscribers.)
The second was that by applying pressure to theaters by devaluing the cost of a movie ticket, these services could insert themselves into the existing Hollywood chain as a kind of middleman, either to take a cut of concession sales or to become part of the producer and marketing ecosystem. AMC, the leading US theater chain, didn’t take too kindly to a company putting itself between the customer and the end product. So it launched its own Stubs A-List subscription that is far superior to anything on the market for just $20 a month.
The final gamble was a data one, the idea being that MoviePass and other services like it could gather data about your habits, what films you liked, and what you liked to do both before and after the movie. That way, a theater subscription platform could provide that data to marketers or possibly even partner with restaurants, bars, and other venues to tie in promotions. That also failed, as MoviePass found itself embroiled in a number of privacy controversies related to how it was collecting data and what it planned to do with it.
That said, MoviePass is the only service that made any inroads in any of those strategies, and yet, it’s still clinging on for dear life. Sinemia, on the other hand, was always playing second fiddle to MoviePass, and as a result, its service began dramatically declining in quality and consistency over the past year or so. The company generated wave after wave of bad headlines in recent months related to random subscription terminations and tacked-on fees now at the center of the class action lawsuit Sinemia mentions in its closure note.
Now, it appears it’s the end of the road for Sinemia. The company says it is ceasing operations in the US, but it’s unclear what’s happening to its Australia, Canada, Turkey, and UK offerings. It’s also not clear what’s happening to current subscribers, whether they’ll receive refunds, and what that process will be like.