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LeEco Kills Plans for EcoPass Subscription Service

Variety logo Variety 4/14/2017 Janko Roettgers
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Embattled Chinese consumer electronics upstart LeEco has killed its plans for EcoPass, an ambitious content and services subscription bundle aimed at U.S. consumers. News of the end of EcoPass comes just days after LeEco announced that it is pulling out of the planned $2 billion acquisition of U.S. TV manufacturer Vizio.

EcoPass combined premium video streaming content with extended warranties, cloud storage, priority customer service and more. LeEco was offering consumers who bought phones and TVs between 3 and 12 months of complementary EcoPass membership, and was supposed to officially introduce the plan and reveal monthly pricing this spring.

But on Friday, a LeEco spokesperson confirmed that EcoPass was officially dead, sending Variety the following statement:

“We have discontinued the EcoPass Beta program as of April 1. We will be replacing EcoPass with 3-months of DirecTV NOW with every purchase of a LeEco ecophone or ecotv. We believe this provides greater value to our customers since it has over 60 channels that include the latest movies and shows.”

Customers who have signed up for EcoPass in the past will still be able to redeem their credits for premium video content and get a lifetime 10 GB cloud storage offer, the company added.

The EcoPass service was thought to be key to LeEco’s plans for a U.S. expansion, as it was supposed to both differentiate the company’s phones and TVs from competing products, and offer recurring revenue after the initial sale of the products — which was especially important since LeEco sells phones for $200 to $350, leaving little room for profit.

LeEco also planned to use EcoPass as a way to turn consumers into repeat customers, directly selling them a wide variety of products, ranging from bikes to VR headsets to eventually cars through the web at a discount. This membership model has worked well in China, where consumers are used to flash sales and similar direct-to-consumer online sales models. But it has fallen flat in the U.S., where most consumers still buy their phones in-store.

As a result, LeEco has struggled to find an audience for its products in North America. Bloomberg reported earlier this week that the company missed an internal goal of $100 million in U.S. hardware sales, instead only selling about $15 million worth of devices. As a result, LeEco is planning significant staff cuts in the U.S., according to Bloomberg.

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