MoviePass has filed a patent infringement lawsuit Friday against rival subscription movie ticking service Sinemia, alleging they have stolen many of its key features reports Variety.
Both services allow customers to see movies in theaters in exchange for a discounted monthly fee, but operate on different usage frequencies – MoviePass allows customers to see one standard 2D movie per day for $9.95 per month. Sinemia allows users to see two movies per month, including 3D and IMAX movies, for $9.99.
In the lawsuit, MoviePass accuses Sinemia of copying features of its mobile app that are the subject of two patents issued in 2013.
The MoviePass app verifies that subscribers are at the theater using their phone’s location data, and uses a subscription card to redeem tickets. Sinemia’s app and card operate in a similar fashion which is where MoviePass argues an infringement.
MoviePass has exploded in popularity recently with 1.5 million users now using the service. The company’s CEO Mitch Lowe recently spoke with ReCode about how their business model is economically feasible:
“Here’s the trick: 89% of American moviegoers only go to four or five movies a year. When they join MoviePass, they double their consumption and go to about 10 a year. That’s a little bit less than one a month. They balance out the 11% of the population that go eighteen times before joining MoviePass and then after go three times a month. It works out. Over time, it actually works out to be about one movie per month per subscriber.”
Lowe goes on to day the company’s goal is to get to breakeven with the subscription and the cost of goods. He adds that over the last three weeks, MoviePass bought one in every nineteen movie tickets in the country, and that the company is “incredibly well funded” and they “have a backer that is prepared to go all the way to get us to cash-flow positive, which isn’t all that far in the future.”
