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The Entire Economy Is MoviePass Now

nytimes.com

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Re: The Entire Economy Is MoviePass Now

#61

Post by dmode »

lrem wrote: post #48
worldsayshi wrote: post #40

Earlier quoted context omitted.

But MoviePass "could also choose to raise prices ever so slightly". It seems very likely it would not work. What's the categorical difference between the two business models? Guess it's the fact that when MoviePass tries to change prices it will force every user to opt in all over again. Opting in is part of the everyday user interaction for Amazon.

Amazon was making profit on every incremental sale, but invested more money than the sum of that profit.

This is the key. Amazon was profitable in the unit economics, Moviepass is not.

Re: The Entire Economy Is MoviePass Now

#62

Post by ryanwaggoner »

osteele wrote: post #56

DELETED as a misreading of the OP.

The author's thesis is that all unprofitable business are the same.

This is not the author's thesis. The author's thesis appears to be:

"An economy full of unprofitable companies has risks." and we should be concerned about the rise of so many unprofitable companies.

Re: The Entire Economy Is MoviePass Now

#63

Post by matchagaucho »

andrewjrangel wrote: post #4

I am curious if this will end with a "bubble-burst" or a slow burn like twitter has experienced. Surely the money has to dry up sometime? It is too bad that none of these companies create any kind of net good for society like a startup that pays you over minimum wage to clean up a park or sort recycling.

Pressure is relieved from the bubble slowly via acquihires and M&A. Engineers get redistributed once a "winner take all" is proclaimed.

Not as impactful as the dot-com crash... but a RIF is usually involved in these bubble corrections.

Re: The Entire Economy Is MoviePass Now

#64

Post by allenu »

crazygringo wrote: post #32
andrewjrangel wrote: post #4

I am curious if this will end with a "bubble-burst" or a slow burn like twitter has experienced. Surely the money has to dry up sometime? It is too bad that none of these companies create any kind of net good for society like a startup that pays you over minimum wage to clean up a park or sort recycling.

> Surely the money has to dry up sometime? Why? A bit simplified, but think of the money as coming from the profits from the companies that have been successful. It's just how investment works. And when you add up all the gains and losses, it's still a net positive as the economy grows a little bit more year after year. And what do you mean no net good? The companies create jobs which create huge amounts of income ta…

You're right that the money wouldn't necessarily dry up, but attitudes towards the risk might change if the likelihood of success of these startups goes down over time. There may be a point where investors don't want to stomach the risk. I'm not saying it's logical, but investors aren't always rational.

Re: The Entire Economy Is MoviePass Now

#65

Post by dalore »

Hmm you laugh, but if you could sell dollar bills at $0.75 but you limited the amount any person could buy. And you made them look at advertising, and collected all sorts of personal info on them. You could easily quite a bit of money off them. More then what you lose in selling the dollar bills at a loss.

Re: The Entire Economy Is MoviePass Now

#66

Post by skinnymuch »

autokad wrote: post #55
andrewjrangel wrote: post #4

I am curious if this will end with a "bubble-burst" or a slow burn like twitter has experienced. Surely the money has to dry up sometime? It is too bad that none of these companies create any kind of net good for society like a startup that pays you over minimum wage to clean up a park or sort recycling.

from the article: “The fact that Google and Facebook were able to generate such enormous profits and growth does give hope to some companies,” IF the bubble bursts, companies that seemed profitable might not remain so. companies like Facebook have made a fortune in advertising on things such as mobile (80% of its revenue), which to my knowledge really doesn't work. likewise a lot of desktop adds don't work, but many…

What makes you say mobile advertising doesn’t work? Google makes a larger and larger portion of their revenue and profit from mobile as well. I’d assume the same is true or going to be true for distant third place player Verizon/Oath.

Advertising has stuck around on TVs and all sorts of formats that can’t be tracked at all for this long, online or mobile advertising not being at the pinnacle of efficacy doesn’t mean it doesn’t work.

Re: The Entire Economy Is MoviePass Now

#67

Post by georgeecollins »

autokad wrote: post #55
andrewjrangel wrote: post #4

I am curious if this will end with a "bubble-burst" or a slow burn like twitter has experienced. Surely the money has to dry up sometime? It is too bad that none of these companies create any kind of net good for society like a startup that pays you over minimum wage to clean up a park or sort recycling.

from the article: “The fact that Google and Facebook were able to generate such enormous profits and growth does give hope to some companies,” IF the bubble bursts, companies that seemed profitable might not remain so. companies like Facebook have made a fortune in advertising on things such as mobile (80% of its revenue), which to my knowledge really doesn't work. likewise a lot of desktop adds don't work, but many…

That's a bit like the dot com thing, where companies spent a lot on banner ads, to get people to come to their site that made money off of banner ads. I'm exaggerating of course. But it is good to think about which VC funded companies may depend on other VC funded companies for clients.

Re: The Entire Economy Is MoviePass Now

#68

Post by adventured »

bmpafa wrote: post #11

VC bucks creating discounts is about the only form of wealth redistribution we [the U.S.] can count on these days.

Not quite. The US is currently undergoing a renaissance of successful government programs that have massively cut poverty and homelessness over the last 15 years.

"Child Poverty Falls to Record Low [nearly a 50% reduction since 1967], Comprehensive Measure Shows Stronger Government Policies Account for Long-Term Improvement"

https://www.cbpp.org/research/poverty-and-inequality/child-p...

"The U.S. Social Safety Net Has Improved a Lot. ... Its social safety net is only a couple of percentage points below the OECD total, and larger than that of Canada, Australia and South Korea."

"Furthermore, U.S. government transfers have been increasing over time. The U.S. system of taxation and spending has become more progressive during the past two decades. Per-capita government transfers were about $8,567 a person in 2016, up from about $5,371 at the turn of the century (adjusted for inflation) — an increase of 60 percent"

"After 16 years of expansions in the safety net under Republican and Democratic presidents alike, the U.S. has a much more robust welfare state than people seem to realize."

https://www.bloomberg.com/view/articles/2018-05-16/the-u-s-s...

The National Alliance to End Homelessness, reports that total US homelessness declined by 27% from 2005 to 2017. The drop was from 763,000 to 553,000 for all forms of homelessness (while the US simultaneously added 30 million people to its population).

"the rate per 10,000 people is at its lowest value on record."

https://endhomelessness.org/homelessness-in-america/homeless...

(their 2013 report which gives figures back to 2005):

https://b.3cdn.net/naeh/bb34a7e4cd84ee985c_3vm6r7cjh.pdf

Re: The Entire Economy Is MoviePass Now

#69

Post by dalore »

ryanwaggoner wrote: post #57
tribune wrote: post #23

Earlier quoted context omitted.

Plus Amazon is Amazon. They've essentially been saying to investors for years "sure, we could make more money for YOU, or give YOU dividends, but WE can do better with your money than YOU could." It's worked, of course, enabling them to grow into the gargantuan enterprise they are today. A smaller company without that proven track record wouldn't get such a license from investors for long.

Wasn't Amazon doing that in their early days, when they didn't have a track record?

And didn't the share price reflect that at the time, which has now grown considerably now that the market has more confidence in them.

Re: The Entire Economy Is MoviePass Now

#70

Post by djrogers »

mabbo wrote: post #16

> The king of money-losers, of course, is Amazon, which went years without turning a profit. Instead, it plowed billions of dollars back into its business The key difference with Amazon is that Amazon could choose to be profitable at any time- just raise prices ever so slightly, reducing growth in customer demand, and the stop building out its enormous logistics empire and new businesses. Amazon could have had profit…

No, I think the key difference with Amazon is that they aren't losing money on each individual transaction - ie selling everything at a loss. Amazon's non-profits were due to aggressive reinvestment, not pricing.
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