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» Film-Tech Forum   » Operations   » Ground Level   » Class Action Against Sinemia Calls Its New Fees 'Bait and Switch' (Page 1)

 
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Author Topic: Class Action Against Sinemia Calls Its New Fees 'Bait and Switch'
Jonathan M. Crist
Jedi Master Film Handler

Posts: 524
From: Hershey, PA, USA
Registered: Apr 2000


 - posted 11-13-2018 09:37 AM      Profile for Jonathan M. Crist   Email Jonathan M. Crist   Send New Private Message       Edit/Delete Post 
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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Mike Croaro
Master Film Handler

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From: Millbrae, CA
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 - posted 11-13-2018 09:49 AM      Profile for Mike Croaro   Email Mike Croaro   Send New Private Message       Edit/Delete Post 
"Sinimia" A foreign language? America's trend of mispelling words for fun?

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Buck Wilson
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 - posted 11-13-2018 06:35 PM      Profile for Buck Wilson   Email Buck Wilson   Send New Private Message       Edit/Delete Post 
What a mess all these services are.

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Bobby Henderson
"Ask me about Trajan."

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From: Lawton, OK, USA
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 - posted 11-13-2018 08:05 PM      Profile for Bobby Henderson   Email Bobby Henderson   Send New Private Message       Edit/Delete Post 
AMC Stubs Premiere and Stubs A-List don't offer nearly as much money savings to customers but at least the services seem more stable. I use the $15 per year Premiere service; it pays for itself after just a couple or so trips to the movies. Stubs A-List almost seems like having another cable bill.

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Marcel Birgelen
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 - posted 11-14-2018 03:44 AM      Profile for Marcel Birgelen   Email Marcel Birgelen   Send New Private Message       Edit/Delete Post 
On their website, the only location you can actually read something about those fees is in the FAQ.

Essentially, they easily can charge you close to $4 per booking in fees... For a few dollars more, you can buy a matinee ticket at many locations.

Those subscription services can never be profitable, unless the theaters actively participate in it.

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Dave Bird
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 - posted 11-14-2018 08:39 AM      Profile for Dave Bird   Author's Homepage   Email Dave Bird   Send New Private Message       Edit/Delete Post 
I'm interested in how the chains report their own subscription services to the studios. We know from the various other industries that subscriptions are profitable since most people eventually use it less. But then most of these things aren't required to take attendance and pay the supplier for each person who shows up. I've even heard some MLB teams are selling ultra-low price "subscription-type" passes which get you in the park for a bleacher seat or standing room based on availability, but again, they aren't turning around and paying a percentage on that.

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Mike Blakesley
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 - posted 11-14-2018 06:50 PM      Profile for Mike Blakesley   Author's Homepage   Email Mike Blakesley   Send New Private Message       Edit/Delete Post 
In the past, studios didn't really care how you handled your money or even if you actually charged any money; as long as each person in the auditorium has an appropriately-valued ticket which has been duly recorded by whatever system you use, and that you pay the studios their percentage on those tickets.

I wonder if that is still in place today. It wouldn't be surprising if some of the large chains have worked out some kind of "deals" with the studios on the subscription programs.

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Marcel Birgelen
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 - posted 11-16-2018 03:49 AM      Profile for Marcel Birgelen   Email Marcel Birgelen   Send New Private Message       Edit/Delete Post 
I doubt that till this date, any exhibitor has gotten a special deal for subscription "tickets" from one of the major studios.

It's not like the butcher will give me a discount on his prime rib, because I run an all-you-can-eat steakhouse, other than just the regular volume discount.

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Dave Bird
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 - posted 11-17-2018 07:26 AM      Profile for Dave Bird   Author's Homepage   Email Dave Bird   Send New Private Message       Edit/Delete Post 
You're probably right, studios likely haven't given any deals. I wonder if they should consider it. It would certainly change the accounting for settling up with them. 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.

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Frank Cox
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 - posted 11-17-2018 10:24 AM      Profile for Frank Cox   Author's Homepage   Email Frank Cox   Send New Private Message       Edit/Delete Post 
butcherbox.ca

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Dave Bird
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 - posted 11-18-2018 08:08 AM      Profile for Dave Bird   Author's Homepage   Email Dave Bird   Send New Private Message       Edit/Delete Post 
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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Mike Spaeth
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 - posted 11-18-2018 11:26 AM      Profile for Mike Spaeth   Author's Homepage   Email Mike Spaeth   Send New Private Message       Edit/Delete Post 
AMC reports a ticket sale of $8.99 for every Stubs A-List ticket purchased for a film.

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Marcel Birgelen
Film God

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 - posted 11-19-2018 04:15 AM      Profile for Marcel Birgelen   Email Marcel Birgelen   Send New Private Message       Edit/Delete Post 
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
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 - posted 11-19-2018 05:33 AM      Profile for Lyle Romer   Email Lyle Romer   Send New Private Message       Edit/Delete Post 
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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Dave Bird
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 - posted 11-22-2018 07:20 AM      Profile for Dave Bird   Author's Homepage   Email Dave Bird   Send New Private Message       Edit/Delete Post 
It differs in that the butcher (I essentially was one) has purchased his meat for an agreed upon final cost from his supplier. He's then free to sell it for whatever price he wants, even at a loss. He could run a subscription service based on what he knows would be his final product cost.

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