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This topic comprises 2 pages: 1 2
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Topic: Class Action Against Sinemia Calls Its New Fees 'Bait and Switch'
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Jonathan M. Crist
Jedi Master Film Handler
Posts: 531
From: Hershey, PA, USA
Registered: Apr 2000
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posted 11-13-2018 09:37 AM
MoviePass competitor Sinemia is being sued by angry customers who say it ripped them off with new fees
When MoviePass was forced to drastically change its business model in the face of mounting losses in August, competitor Sinemia stepped into the spotlight.
The movie-ticket subscription startup was founded in Turkey in 2015 and had operated overseas, but in early 2018 it capitalized on the hype around MoviePass to launch in the US. Despite their similarities, Sinemia CEO Rifat Oguz positioned his company as the anti-MoviePass, focused on "profit" and "sustainability" where MoviePass was focused on hypergrowth.
But as MoviePass began to introduce unpopular new restrictions, Sinemia went for the jugular, introducing a plan at the same price as MoviePass (around $10 per month), with the same number of movies (three per month), but with no restrictions on movies or showtimes — and with the ability to book tickets in advance.
For some movie fans, including myself, it seemed we had finally found a subscription service we could rely on. That feeling didn't last for many.
On Friday, the law firm Chimicles & Tikellis LLP filed a class action lawsuit in Delaware on behalf of two plaintiffs, alleging that Sinemia "essentially became a bait-and-switch scheme."
"It lures consumers in by convincing them to purchase a purportedly cheaper movie subscription, and then adds undisclosed fees that make such purchases no bargain at all," the lawsuit claims. "Sinemia fleeces consumers with an undisclosed, unexpected, and not-bargained-for processing fee each time a plan subscriber goes to the movies using Sinemia's service."
I, too, encountered Sinemia's sneaky fees and wrote about them in a piece published last week. In the piece, I urged the company to be more transparent with customers about its pricing structure. After the article published, I was contacted by over 40 Sinemia subscribers, many of whom expressed anger and frustration with its fees and lack of customer service.
On Sunday, less than a week after my story, Sinemia deactivated my personal account without explanation. A button to "reactivate" my subscription didn't function and my email to customer support hasn't been answered. Despite paying a $20 activation fee, my account was only active for two months before Sinemia shut it off.
I saw one movie, "A Star Is Born," which I highly recommend.
How did it all go so wrong so quickly?
Fees upon fees
The crux of the class action lawsuit against Sinemia is a new $1.80 "processing fee" that the company began to roll out in mid-October.
To understand how the new fee changes the value proposition of the service, it's helpful to look at one of the lawsuit plaintiffs: Paul Early of California.
Early signed up for Sinemia in August and paid $191.88 for a year plan of two movies per month for two people, plus $9.99 for early activation, according to the suit. All in he paid over $200. The first five times Early used Sinemia, he incurred a $1.50 third-party "convenience fee" (from using ticketing sites like Fandango). Sinemia had disclosed before he'd bought the subscription that he'd have to pay that fee.
But then when Early went to use the app on October 22, he was charged a further $1.80 "processing fee" per ticket, according to the suit.
After getting hit with this new fee a few more times, Early contacted customer support asking to cancel his plan and get a refund for the remainder. He never heard anything, according to the suit.
"The movie plan Early is now stuck with has lost significant value with the imposition of the processing fees," the suit argues.
Many Sinemia subscribers echoed these sentiments to Business Insider, saying they felt taken advantage of by the fees, especially when "processing fees" were added on top of "convenience fees." Multiple subscribers said they had requested refunds for the remainder of their yearly subscriptions and been told Sinemia was a "non-refundable service."
Others simply never heard from Sinemia's customer support despite multiple follow-ups (including myself).
Sinemia provided the following statement to Business Insider after publication:
"From the beginning, the goal of Sinemia has been to make the moviegoing experience much more affordable and enjoyable for moviegoers by covering for the cost of the movie ticket. While nobody enjoys fees, there are certain costs related to booking and processing outside of the price of the movie ticket that are out of our control. A processing fee of up to $1.80 applies so that Sinemia can continue to provide access to all showtimes for all movies in all theaters without restrictions as well as to keep our subscription plans and services consistent, as they have been since the founding of the company. Also, Sinemia is developing a feature in the app which will allow users to order physical cards in December or earlier."
Sinemia Class Action Fee Lawsuit
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Dave Bird
Jedi Master Film Handler
Posts: 777
From: Perth, Ontario, Canada
Registered: Jun 2000
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posted 11-18-2018 08:08 AM
Oh, they're trying to kill the grocery store Frank, they have been for decades. A number of things holding them back so far. Groceries have the most extensive and efficient distribution network of anything and really has for millenia. They cannot be bought cheaper than you going and selecting what you want when you want it. That's been the hardest selling feature of these services (not really subscription, they're not "all you can eat for a monthly price", it's still a "value proposition" - set quantity for a set price), they're committing you to spend X dollars per month regardless of whether it turns out to be too much or too little. They might be offering it at a slight discount to the store, sure, but the inefficiency of committing to the "inventory" likely kills your "savings". That's the beauty of capitalism though, keeps everyone on their toes, have to assume somebody out there is coming after you.....
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Marcel Birgelen
Film God
Posts: 3357
From: Maastricht, Limburg, Netherlands
Registered: Feb 2012
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posted 11-19-2018 04:15 AM
quote: Dave Bird
It's a little different from the butcher in that the butcher has paid for the cow and can sell it for whatever price he wants, including subscription I suppose.
In what way does the butcher in this regards differ from the studios? The studios paid for the movie, they alone decide how they're going to sell the movie to the public. Netflix, for example, does have a studio arm and sells most of its productions only via their subscription service, whereas Disney still employs the traditional release cycle for their A-list productions.
But it will be a hard sell towards e.g. Disney, to convince them to change their business model towards you as exhibitor, only because you happen to sell "flat fee, all you can see" subscriptions. They'll tell you: Great, if you can make it work, but we still want our regular cut of every "butt-in-the-seat", which seems to be exactly what's happening.
So, the "Stubs A-List" service will most likely still be profitable for AMC across the board, although if everybody would max out their three movies a week, it would obviously not be profitable, unless those people would compensate their loss with massive amounts of concession sales, which will be mostly unlikely.
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Lyle Romer
Phenomenal Film Handler
Posts: 1400
From: Davie, FL, USA
Registered: May 2002
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posted 11-19-2018 05:33 AM
The only way I could see the studios even considering a flat rate rental would be to get some kind of share of concession sales. That would get quite complicated because, outside of a single screen, how would you figure out the split between studios?
I'm guessing with something like the AMC stubs A-list program, they have figured out that on average the usage rate will allow them to pay the film rental on the ($8.99 if accurate) tickets without losing money on the program overall. The profit comes from concession sales (or food sales in dine-in locations).
I couldn't find 3 movies a week to see if it was free so the usage can't be anything near 12 movies a month. Back "in the day" in the mid/late 90's when I worked for GCC and got free movies as a perk, I could manage to find 1 movie a week that was worth the time to watch.
If I was a Stubs A-list customer, they'd report $468 worth of sales. At 60% film rental that's $280 to the studios. I paid AMC $239. They'd be $41 upside down. However, they are very likely to get me to buy $100 worth of profitable food/concession over the course of the year with my 52 visits.
Plus, a lot of the time, I'd probably have a guest with me that isn't a member and pays regular price.
A program run by an exhibitor can work simply because most normal people can't possibly find that many movies to see in a year. A program run by a 3rd party can't possibly work because they have to pay full price to the exhibitor and would have to charge more to actually make a profit (or have an extremely low usage rate).
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