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MoviePass CEO backpedals on location tracking and talks strategy to break even by 2019

In a rare moment of contrition, MoviePass CEO Mitch Lowe admitted misleading both consumers and advertising execs with statements last week that the company tracks the location of users before and after they go to the movies. We dont do the things I described, he told TechCrunch. As for location, We dont record it, we dont save it, we dont follow it. Customers may find this total about-face since last week unconvincing, especially since the company issued an update to the app days after Lowes remarks that removed unused app location capability. That too was inaccurate, Lowe told me. The update didnt change anything, only the menu options. He later wrote to the same effect in a blog post on the companys site. But Lowe explained that he was the victim of his own excitement. Talking to a crowd of data mongers at the Entertainment Finance Forum, in a talk specifically about monetizing the data MoviePass collects, he claims to simply have gotten ahead of himself and talked about plans as if they were reality. Sometimes I get all excited about our future vision of a night at the movies and building an ecosystem around it, he said. I need to correct what I said. The way I portrayed what we do is not accurate. I implied we know where you are when youre on the way to the movies, and thats not what we do. Specifically, he said that the app checks location when the user has the app open in order to find theaters near them, in case they want to look up movie times or the like. Then theres another location check when the user checks in, to make sure theyre at the theater their ticket is for. We only know where they are at that instant. Once they go out of the app, we dont know where they are. We dont know where they go afterwards, we dont record it. Thats all we do, thats all weve ever done. I had pointed out earlier that tracking like he had said they did would be a flagrant violation of their own privacy policy, which would put them at risk of lawsuits or even FTC action. Lowe specifically said that they do comply with it; although technically checking in the background for nearby places isnt listed there (only a single request for your location when you check in is), the nearby theaters feature is hardly the kind of invasive data collection about which one would actually complain. If the company decides to launch a more comprehensive night at the movies service, complete with pre- and post-movie tracking, well comply by all the rules and acceptable terms by first sending an opt-in or opt-out, explaining in plain English what we are doing with that information. As for other changes to the product, Lowe said to expect some new offerings soon. Therell be new stuff in the near future, he said. Well come out with a premium package, a bring a friend package, a couples package, a family package. Id lay money on some kind of red carpet branding. He didnt detail what these packages would comprise exactly, but he did say that you can expect the original monthly system will be in place for the foreseeable future. Most people assume the number of movies our subscribers go to is much higher than it is, he said, which is consistent with the early adopter pattern of squeezing every last drop of value out of an all-you-can-eat service. He declined to quote actual averages, but said youd be shocked at how low it is. He said, for instance, many users go from seeing on the order 4 or 5 movies a year to 10 a year — not 10 a month as some believe is the case. The value, he speculated, was in de-risking seeing a bad or small movie — which also can increase ticket sales for those films. That said, Lowe pleaded guilty in response to the most frequent and obvious criticism of the service, which is simply that it is losing money at a phenomenal rate and only survives by frequent cash infusions. In the old days it was raise a ton of money and then grow a business. Today what you do is you raise enough money month by month to fund essentially that negative cash flow, he explained — which really is just a nicer way of phrasing the problem. But Lowe compared MoviePass to the likes of Netflix and Spotify, which have taken on huge debt to position themselves to grow and monetize their user base. Whether the comparison is apt or aspirational depends on MoviePasss success over the next year; Lowe said We are 100 percent confident that we have the committed funding… to get to the cash flow break even point, which we believe will be early next year. The steps in that plan: Obviously were not there yet, he concluded. But he pointed out that the cash required is coming down dramatically from what it was even a few months ago. He later specified in an email that this is from a combination of revenue from studios and brand partnerships, lower costs of tickets, lower member churn and lower usage. However, the road to getting a share of concessions — famously the most profitable part of the business — will be a bumpy one, especially given the antagonistic stance MoviePass has taken with industry leaders like AMC. For now it at least seems safe for consumers to use the app without fear that they are being surreptitiously tracked — any more than they are the rest of their time online, at any rate. 2018 will be the year MoviePass either becomes a major force in the industry or collapses, its expended millions a sad examplar of peak subscription economy.

Now MoviePass' CEO says the app never tracked customers

In an interview with Variety, Mitch Lowe said he "misspoke" at a conference. A week after MoviePass CEO Mitch Lowe's comments that "we watch how you drive home" came to light, the exec is walking back those words. In an interview with Variety, Lowe said "I said something completely inaccurate as far as what we are doing... We only locate customers when they use the app." Now, the way Lowe describes the app matches its privacy policy, and the way its technology is explained in the company's patent that he referenced during his original statement. So, all good? Maybe, maybe not. While the service's iOS app has been updated to remove an "unused" permission to access location all the time, the title of Lowe's infamous presentation was "Data is the New Oil: How Will MoviePass Monetize It?" Even if it's not tracking user's location over an extended period of time yet, that's certainly a possibility for the future, not to mention what's possible when you combine that data with information from other clearinghouses. Remember, for many of the companies providing free or low-cost services, data greed is good. Update: Lowe also posted a letter to MoviePass customers on the company's website, apologizing for the confusion and explaining the situation, along with an updated privacy FAQ specifically addressing everything. We have a segment of the letter here. The MoviePass app currently uses standard location services capabilities on an opt-in basis. There are only two events that would prompt MoviePass to identify a member's location. These include when a member requests to search for theaters nearby and when a member requests to check into a theater. Both events require both the app to be open and for the member to request the action. MoviePass does not track and has never tracked or collected data on the location of our members at any point when the app is not active. In our recent update with Apple, we removed the the background tracking capabilities. MoviePass does not use and has never used this feature.