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As the tumultuous last few years at MoviePass have proven, a subscription-based movie ticketing service is not the easiest thing to figure out. It turns out trying to price a monthly or yearly cost for unlimited movies is pretty tricky.
MoviePass competitor Sinemia is also having trouble with its pricing model. Or, more accurately, is getting into legal trouble for allegedly adding hidden fees to its subscriptions. A group of Sinemia customers is claiming in a lawsuit that the subscription-based service "essentially became a bait-and-switch scheme."
Furtive Fees and Fleeced Film Fans
In case you hadn't heard, Sinemia launched a movie subscription plan at the same price as MoviePass in recent months (after being sued by MoviePass earlier this year for patent infringement). Sinemia offered the same number of movies, but without the same restrictions on movies or showtimes and with an option to book tickets in advance. Sinemia was less than forthcoming, however, about processing fees it charged when customers booked tickets.
An annual subscription for two movies per month for two people runs about $192. But Sinemia began charging another $1.80 "processing fee" per ticket. "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," according to the lawsuit filed last week. "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."
Breach and the Big Screen
Sinemia claims the fees are "out of our control," and unavoidable when using other ticketing sites like Fandango. The crux of their customers claims, however, is that fees were altered or added after they had already purchased subscriptions. The suit is alleging breach of contract, unjust enrichment, breach of the covenant of good faith and fair dealing, and fraudulent concealment.
Running a business can be hard, and disrupting the entire movie industry is proving even more difficult. Circumstances and costs can change. But be careful before your pass those costs on to customers without notice.