This movie ticket subscription company is in trouble

When Sinemia first came across our radar, the company was happily riding the wave of anti-MoviePass publicity. With its chief competition in the midst of what looked to be a historic collapse, Sinemia happily grabbed headlines as a what looked to be like a more stable alternative for movie ticket subscriptions.

Last July, at the height of MoviePass’ meltdown, we asked Sinemia co-founder and CEO Rifat Oguz how he planned to avoid a similar fate. “By not providing unlimited tickets. But providing two tickets for $9.99 with more flexible options and features, we might not have grown as fast as MoviePass, but we’ve grown more sustainably,” he answered, happy to contrast the two companies.

Another key difference between the two competitors is that Sinemia isn’t public, so any struggles it’s had over the past year have largely been out of the public eye. Not entirely, however. Not in the age of social media. As I noted in a piece last week, every Sinemia story that’s run on this site, no matter how minor, has been bombarded with a deluge of Twitter criticism.

It’s a wide-ranging laundry list of complaints at first glance. Sinemia’s Twitter support team appears to be working overtime to address them, but the sheer number of critical responses is unlike anything I’ve seen doing this job.

The primary complaints generally fall into three separate, but sometimes overlapping, categories.

Earlier this week, we spoke to Oguz about the service’s ongoing issues. It was a short call, squeezed between meetings the executive was running to at CinemaCon in Las Vegas this week.

“As CEO, I can say, we’re still learning,” he said in a humble tone. “I think we’re learning in a way.

As we spoke, Sinemia issued a press release noting the launch of “two new customer service websites.” It’s not the kind of announcement companies tend to brag about in PR emails, but it seems clear the sheer volume of negative feedback has caused Sinemia to be more proactive in highlighting the steps it’s taking to address its very vocal, angry subscribers.

It echoes a move made by the company last week, when it sent its announcement of a new $15-a-month Always Unlimited plan accompanied by a lengthy “Account Termination Media Alert” that outlined its aggressive moves in March to cancel accounts over “fraudulent activity and/or misuse of the service.”

Like MoviePass before it, Sinemia began a process of terminating accounts en masse for violations of terms and generally gaming the system. In a statement last week, the service gave the following reasons as cause for potential account termination.

Unauthorized use of the Sinemia card/cardless outside of its intended purposes, resulting in fraudulent financial activity. For example, this could be purchasing concessions at the theater instead of a movie ticket.

Sharing one’s Sinemia membership to buy tickets for other people. This includes not only people buying tickets and selling to others but also people sharing their own tickets with friends and family members.

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Manipulation of location data resulting in deceptive ticket purchases. For example, faking GPS data on a phone.

Reasonable suspicion of fraud and/or abuse.

But while cancellation complaints do appear to have accelerated last month, the truth is that negative feedback against the service dates back further. In late February, Pennsylvania law firm Chimicles Schwartz Kriner & Donaldson-Smith filed a class action suit in Delaware (not to be confused with the on-going patent dispute with MoviePass), the state in which the now largely Los Angeles and Turkey-based company was incorporated.

The 50-page filing doesn’t mince words, with statements like, “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 partner and plaintiff in the case against Sinemia, told TechCrunch that the firm has received more than 2,000 complaints from current or former Sinemia subscribers.

“I’ll be very transparent about our litigation strategy: we want to certify a class consisting of all of the Sinemia consumers who were harmed in the same way by the same defective conduct, and then get the case in front of a jury as quickly as possible,” the lawyer said in a statement to TechCrunch. “We think our clients and the thousands of others like them have compelling stories to tell, and we look forward to having an opportunity to present it in court.”

Asked whether the 2,000 number sounded high, Oguz simply responded, “No. It’s a small number if you compare it with our user base.” Because it’s not a publicly traded company, Sinemia is not required to disclose such numbers, and the executive didn’t offer much in the way of specifics, only saying that it has “grown almost 50 percent month over month for the last 15 months.”

Orguz did address growing customer complaints around Sinemia’s app. Like many of the other ongoing issues with the service, complaints run the gamut. The most commonly cited, however, involve things like double charges, error messages and frequent pop-ups explaining that the app is “down for maintenance.”

According to users, these kinds of issues have the tendency to pop up when trying to purchase tickets to popular features like Captain Marvel and Us. Orguz discussed the maintenance issues in a recent interview with IndieWire that the publication describes as, “at times[…]contentious,” adding that he “express[ed] surprise” upon hearing some of these complaints read back to him.

The tone of our own conversation was ultimately a bit less combative than that interview, with Orguz admitting that Sinemia’s app has been experiencing issues. “Yeah,” he answered, agreeing to the premise that the app’s problems appear to be “pretty widespread.”

It’s for that reason, he explained, that Sinemia is launching two independent service websites to address the problems with the app and accoount terminations. “We are taking it seriously,” he insisted. “We are looking at every comment. We didn’t found the company a year ago. It started about five years ago. We are taking every negative comment very seriously.”

At the very least, a pending lawsuit and months of wall-to-wall customer complaints on Twitter and Reddit do appear to have moved the needle somewhat. Just how much and how Sinemia will approach disgruntled users going forward remains to be seen. But like MoviePass before it, it’s hard to shake the notion that so much negative publicity has left an irreparable mark on the company just as it started to make a name for itself — not to mention a sea of irate consumers in its wake.

Fittingly, Orguz’s comments echo those of Ted Farnsworth. In our recent interview, the CEO of MoviePass parent Helios and Matheson suggested that the service was a victim of its own success, growing the service faster than its staff could ultimately manage.

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Similarly, Orguz told us, “Our subscriber numbers have grown more than expected. Even after last August, we weren’t expecting to go that much, that fast. When we’re growing, we’re also improving ourselves, and we’re trying to find a way to maintain and to sustain.”

But as difficult as managing that success may have been for the company, its greatest challenge is still ahead of it: convincing thousands of disgruntled fans — and possibly a courtroom — that its worst days are behind it.