Sinemia itself could be a movie
I used to have an office at Kolektif House Levent, and that’s when I heard about Sinemia for the first time. Sinemia is a monthly subscription service that gives you access to 2D and 3D movie tickets for one low monthly fee.
Actually, their office was directly below mine, so every day I saw the enthusiastic team of Chief Executive Officer Rıfat Oğuz. It seemed to me that the number of workers were increasing by the day. I had never met Mr. Oğuz in person until 2018, but I read about him once in a while in the news. He also began to get recognition from everywhere. For example, he received the 2017 CEO Award from the U.K.-based global finance publication Finance Monthly. So when I actually met Mr. Oğuz, I was already positively biased. Also I really wanted to believe that a young Turkish entrepreneur could make it globally. So in the end I wrote a piece about how Sinemia is revolutionizing the movie-going experience.
However, by the end of 2018 ill news began to emerge about Sinemia. I asked Mr. Oğuz about all of them and got his take on the issues.
The first was about a class action lawsuit regarding the service fee. The second lawsuit came from its competitor, Moviepass.
According to Variety, MoviePass sued Sinemia in February 2018, accusing its rival of stealing several patented features of its mobile app. In particular, MoviePass claimed that it had invented a method to confirm a ticket buyer’s identity using cellphone location data.
Sinemia had moved forward for a dismissal, but they were denied this April. In his ruling, Judge James Otero is clearly skeptical that this qualifies as a genuine invention. In its motion to dismiss, Sinemia argued that MoviePass had simply combined abstract concepts — the confirmation of a transaction and a ticket buyer’s location. Otero agrees.
“While the court is somewhat skeptical that this ‘inventive concept’ is anything more than well understood, routine or conventional to a skilled artisan, it nevertheless finds that disposing of this issue at the motion to dismiss stage is
inappropriate in light of a pair of recent decisions by the Federal Circuit,” Otero wrote.
Instead, the judge found that “further fact-finding is necessary,” and denied Sinemia’s motion to dismiss.
And at the end of April, Sinemia announced that they are shutting down B2C operations in the United States effective immediately and fired 60 staff members who were responsible for customer satisfaction in the U.S. market.
These two decisions created further problems for the company. First, a second-class action lawsuit was put in motion with allegations that the discount movie ticket service wrongfully terminates subscriptions without offering full refunds.
Plaintiffs Henry Yeh, Jeremy Rynca and Kathy Braun argue that their subscriptions were wrongfully terminated after they had paid for a full year, but they were not refunded the amount of time left in their subscription.
Secondly, the workers have organized and started fighting for their rights. They claim that they were forced to sign papers not to speak against the firm publicly just two weeks prior to their firings and were told that they would not be paid notice and severance payments.
Mr. Oğuz said that the workers will get what they are due, after they will finish their consultations with lawyers and finance specialists.
He also said that the first lawsuit by Moviepass has halted because they stopped B2C operations.
While these events were happening, Sinemia tried to raise more money in Turkey. Some of the leading figures in the Turkish startup ecosystem were leading the drive for more funds, but as the news about lawsuits broke, the effort stopped. Mr. Oğuz said that they were the ones who stopped the investment round even though there were investors who had committed money.
I heard differently. Some of the people who were asked had raised the issue, and Sinemia had to stop the funding round, an angel investor told me.
So as with everything, it is a bit of he-said-this-and-he-said-that situation.
Maybe one day the story of Sinemia will be on the silverscreen, it is up to Mr. Oğuz how this story develops.