Subscriptions

Sinemia Shuts Down US Operations Amid Lawsuits

Sinemia, the movie theater subscription service that tried to take a page from MoviePass, is shuttering U.S. operations.

The company, which had been making plan changes and canceling accounts, is now shutting down amid legal proceedings including a patent lawsuit filed by MoviePass. It’s also struggling with a lack of capital, which prompted the move.

In a letter on its webpage, Sinemia said it was ending operations in the U.S. effective immediately and that the company didn’t see a path to sustainability as an independent movie ticket subscription service in the face of competition from movie theaters that are building their own subscription services. The letter stated that movie theaters have a cost advantage and cross-sell opportunities that put them in a better position to sell the subscriptions.

“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 U.S. 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 U.S. operations,” Sinemia wrote in the letter.

For sometime Sinemia, which tried to capitalize on MoviePass’ demise, has been struggling with customer complaints and a class-action lawsuit over its treatment of customers. Sinemia was able to gain subscribers at the time MoviePass was facing its own troubles. The lawsuit contends 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.” Benjamin F. Johns, a lawyer working the case, said earlier in April that he has received upwards of 2,000 complaints from the company.

When announcing in late March it was offering a $15 monthly plan called the Always Unlimited Plan, which lets customers see one movie a day, it also said it was canceling some customers’ accounts after identifying fraudulent activities. “Sinemia is a FinTech company in the entertainment industry. Just like any other FinTech company, Sinemia also faces its own challenges of fraud,” the company said at the time. “After conducting a detailed fraud detection analysis earlier this month, Sinemia has terminated a very small number of user accounts for fraudulent activity and misuse.”

 

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