Comparing MoviePass to Amazon is like comparing Michael Scott Paper company and Dunder Mifflin.
The Entire Economy Is MoviePass Now
141–150 of 245 posts
Re: The Entire Economy Is MoviePass Now
#142It's kind of too obvious to even point out, but why act surprised that a company, each of whose customers causes a net loss, gets poorer, faster, as it grows?
Spotify, the popular music streaming service based in Sweden, lost $1.5 billion last year, even as [because] it continued to add millions of users.
On Tuesday, Helios reported that MoviePass lost $98.3 million in the first quarter," despite adding [because it added] more than a million net subscribers.
FTFY.
Re: The Entire Economy Is MoviePass Now
#143I 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…
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Re: The Entire Economy Is MoviePass Now
#144> 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…
> The key difference with Amazon is that Amazon could choose to be profitable at any time
Wait what? No. They were a loss leader because they kept doubling down on a bad business models until they made headway on the reseller market to push themselves as an online retailer, which brought them out of the red. Only after the massive success of AWS, did they solidify as the most successful retailer because THAT got reinvested.
Notice, Google tries to follow this EXACT model, as it has for decades. It has little profit to show for chasing this fable-strategy because it doesn't work. Grabbing Doubleclick was a minor misstep (there were far superior companies to choose from), but at least they got youtube and were able to keep the boat floating (with a little Ad Tech dust). Riding their search engine product as far as it will go and then building an ad network on top of their search+youtube is where Google has settled.
Amazon has been looking into advertising for the last couple years and will probably be less successful than Google without a big new thing, which is unlikely to come from this mythic "reinvestment". Why does this fairytale story about Bezos keep getting pushed? Successfully keeping a company running is not the same as him being nigh prescient about how to manage the resources.
Re: The Entire Economy Is MoviePass Now
#145Joel Spolsky addressed this, much more insightfully, in one of his early strategy letters: https://www.joelonsoftware.com/2000/05/12/strategy-letter-i-... There are real reasons why companies like MoviePass exist, why companies like Snap lose money, and why investors back them. It's just a land grab where you have to move fast to establish dominance.
Snap I can understand, but MoviePass not. People can easily switch to another subscription.
People can easily switch, maybe so, but generally they don't. That is one of the reasons subscription revenue is highly prized. Many businesses are sustained on long forgotten subscriptions landing on credit card bills every month.
Re: The Entire Economy Is MoviePass Now
#146Earlier quoted context omitted.
I think you are misreading the business model. The MoviePass price is per month . There is NO cost per viewing. You could in theory see up to 31 movies for your single $10 payment.
But normal people wont they will see 1 or 2
I live in an area with a cheap cost of living and even if I only went to one movie a month a MP is still about a buck cheaper.
Re: The Entire Economy Is MoviePass Now
#147Earlier quoted context omitted.
MoviePass doesn't have to raise prices ever so slightly to be a viable business. It has to raise prices by significant integer multiples. (And heck, Amazon don't even need to raise prices, they could be very profitable just by investing in growth less. But their investors are clearly happy with the current state of affairs).
Not really could just have tiered prices 6.99 for weekdays before 5:30, 9.99 after - and say 12.99 at the weekends/holidays. For example my local VUE in the UK I can get a ticket on Mondays for less than $6 full price is $16 I suspect that its the paying up front for a year when a substantial majority of its customers wont goto the cinema
Moviepass is an all you can eat subscription. The UK has those - Cineworld and Odeon both do them. But the point is that they're significantly more expensive than Moviepass is, and the price of quite a few individual tickets (they're usually £35/40pm, which is $50-60 US). And they're run by the chains themselves so they have less infrastructure cost to check for fraud.
That's what I meant by integer multiples. If Moviepass was $60 a month it might be sustainable. But it's not, it's $10.
Re: The Entire Economy Is MoviePass Now
#148Earlier quoted context omitted.
Actually the biggest key is a distinction between profitability and cash flow. Amazon has been cash flow positive since 2001. Sure, it spent huge number of years burning cash building it's revenue from $2 billion in 2001 to $200 billion today, but because they have a structure where they don't have to pay their suppliers until close to 3-4 months after the collect from their customers, they can sustain that without n…
Amazon makes weird non-GAAP claims. In terms of GAAP, Amazon had negative free cash flow of $4.2 billion in Q1.
If you are referring to the cash flow statement, which I think you are, there are no "weird non-GAAP claims" involved.
Their latest 10Q shows GAAP pretax income of $1.9 billion.
If you're referring to total change in cash which was -$4.2 billion, that's because they reduced their accounts payable by $10.2 billion from paying all the suppliers after the holiday season. Looking at the consolidated statement of cash flows of a seasonal business very, very easily leads to misunderstanding the business.
Operating cash flow was $18 billion for the year ending 3/31.
Re: The Entire Economy Is MoviePass Now
#149Earlier quoted context omitted.
This argument is funny to me mainly because I hear it all the time, about how different they are because they don't want to be profitable. The other thing management is supposed to do is manage cash flow and profit in such a way as to reduce risk (by piling up cash, not too much of course, but just enough...). They also survived the dot com crash because they were thrifty and always kind of cash flow break even.
Amazon simply does not need to have cash on hand. They can attain massive profits at literally any point by just increasing their margins ever so slightly across whatever business lines they operate in. This is the benefit of the scale they operate at.
They would have profits if they stopped reinvesting the proceeds from retail into new businesses. They wouldn't need to increase their margins or reduce costs, just stop willfully adding new costs.
Re: The Entire Economy Is MoviePass Now
#150Earlier quoted context omitted.
Not really could just have tiered prices 6.99 for weekdays before 5:30, 9.99 after - and say 12.99 at the weekends/holidays. For example my local VUE in the UK I can get a ticket on Mondays for less than $6 full price is $16 I suspect that its the paying up front for a year when a substantial majority of its customers wont goto the cinema
Moviepass is an all you can eat subscription. The UK has those - Cineworld and Odeon both do them. But the point is that they're significantly more expensive than Moviepass is, and the price of quite a few individual tickets (they're usually £35/40pm, which is $50-60 US). And they're run by the chains themselves so they have less infrastructure cost to check for fraud. That's what I meant by integer multiples. If Mov…
If the all-you-can-eat subscription is run by the chains they might also be hoping to make back what they lose on ticket sales in concession sales.
Moviepass doesn't get any of that sweet concession stand money and they'd have a hard time convincing theaters that they should unless they start leveraging their user base (i.e. threatening to drop MoviePass from working at Cineplex) to pressure theaters. Even then they add so little value to the system that it'd be hard for them to do that while sustaining a competitive advantage against new market entrants.
MoviePass is just a terrible idea to be in as an independent business.