Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

The Entire Economy Is MoviePass Now

nytimes.com

Post reply on HN
Print view View original

191–200 of 245 posts

Re: The Entire Economy Is MoviePass Now

#191

Post by intrasight »

tlynchpin wrote: post #145
lozenge wrote: post #125

Earlier quoted context omitted.

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.

This is so true. Less true for me since I have my credit card email me about every transaction, and every time I get one I must decide if I wish to keep that subscription.

Here's an idea for a business. Monitor customers credit card transactions for subscriptions, and do bulk negotiation with the service provider to knock down the price based upon how much service the customer is actually using. Take 10% of the savings.

Each time one of these subscription payment emails arrives, the user would be shown a few extra buttons: 1. cancel my subscription, 2. Offer service $X/month to keep me as a customer, 3. No change.

Just the "one click cancel" would be useful, but the "get me a better price" should be real popular.

Re: The Entire Economy Is MoviePass Now

#192

Post by nraynaud »

pwinnski wrote: post #94
nraynaud wrote: post #46

Yeah, I am a bit sad to see those Ofo, limebike, Bird going all out in the streets, they are trying to outspend each other for the winner to raise the price. I just want a sustainable shared transportation system.

Ofo has been free to use for many months now, at least in Dallas. Are they counting on the competitors to all fold and leave them the sole market owner? Such weird economics!

Yeah, here in Scottsdale too, I think they are way bigger and way older than all the others, I guess they have more killing power.

Re: The Entire Economy Is MoviePass Now

#193

Post by Zombieball »

samfisher83 wrote: post #84
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…

Building out warehouses does not hurt earnings. The whole point of accounting is to try to match revenue with cost. If you build a warehouse you don't expense it one time. It gets expensed over time. If they develop software than that is treated as expense or buy movies that gets expensed. Their core retail business is not that profitable. It goes from 0-3%. Its pretty much the same as walmart or any other retailer.…

If true, wouldn’t that just be a sign that AWS is not reinvesting fast enough?

Re: The Entire Economy Is MoviePass Now

#194

Post by nradov »

pwinnski wrote: post #87
djrogers wrote: post #70

Earlier quoted context omitted.

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.

Exactly! It's the difference between losing money on a macro-level and losing it on a micro-level. You can't lose money on every transaction and make it up in volume, as the old joke says. But you can make money on every transaction and choose to invest it in expansion, so that you lose money overall.

To a limited extent large retailers like Amazon and Walmart actually can lose money on every transaction and make it up in volume. By delaying payments to their suppliers they get 2 - 3 months of float and can earn extra income by investing that capital. Of course in today's low interest rate environment it isn't much, but at their scale it adds up.

Re: The Entire Economy Is MoviePass Now

#195

Post by sudhirj »

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…

> Amazon, which went years without turning a profit.

This is semantics. If I make $100 on a $60 spend, and then choose, like Amazon, to reinvest the $40 in the knowledge that it will improve efficiency next year, my "profit" is technically $0, but my company is not worth a lot more than $40.

If like MoviePass, I spend $100 (of borrowed money) on revenues of $60, with no clear explanation of how I've added $40 of value to the company, that's a bit of a red flag. Saying "I'll figure it out eventually" is a bit touch and go.

Re: The Entire Economy Is MoviePass Now

#196

Post by neilwilson »

sudhirj wrote: post #195
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…

> Amazon, which went years without turning a profit. This is semantics. If I make $100 on a $60 spend, and then choose , like Amazon, to reinvest the $40 in the knowledge that it will improve efficiency next year, my "profit" is technically $0, but my company is not worth a lot more than $40. If like MoviePass, I spend $100 (of borrowed money) on revenues of $60, with no clear explanation of how I've added $40 of val…

In accounting it is known as contribution. Any sale that covers its variable costs is worth making.

Your sink costs are sunk and your investment costs are optional.

Re: The Entire Economy Is MoviePass Now

#197

Post by kgwgk »

gabriel34 wrote: post #60
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…

It is not just that Amazon could or could not turn profits at will. Turning a profit (paying dividends) or reinvesting is a decision every investor relations team must make, simplifying the subject it is based on whether you predict your company will get the investor more money (by stock price growth/future dividends) than if he invested in other equaly risky set of assets. I don't believe this is the case for Moviep…

It’s funny to think of IR departments deciding on one of the most strategic capital allocation issues at any company (or maybe you consider that the CFO is part of the investor relations team, that wouldn’t be completely wrong but it’s not the usual definition).

Re: The Entire Economy Is MoviePass Now

#198

Post by pas »

kelnos wrote: post #190
dingo_bat wrote: post #182

Earlier quoted context omitted.

Well you can just subscribe to the theater closest to you. Why would you want to go to the ones across town?

This may not be common outside urban areas, but I have theaters from 4 different chains all within a 40 minute walk, and I've visited them all within the last few months. If I were asked to pick just one to subscribe to, I'm not sure how I'd choose.

Why don't you buy the tickets online whe you want to go to the cinema? what do you get by subscribing? how much would it cost?

Re: The Entire Economy Is MoviePass Now

#199

Post by cornholio »

pwinnski wrote: post #87
djrogers wrote: post #70

Earlier quoted context omitted.

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.

Exactly! It's the difference between losing money on a macro-level and losing it on a micro-level. You can't lose money on every transaction and make it up in volume, as the old joke says. But you can make money on every transaction and choose to invest it in expansion, so that you lose money overall.

> You can't lose money on every transaction and make it up in volume, as the old joke says.

You actually can. It's the oldest trick of the industrial age, mass production and economies of scale. A good rule of thumb is that increasing production of a physical good by a factor of 10 will drop the unit cost by half. For non-tangible goods the effect is even more pronounced. The fist copy of Microsoft Windows might cost 1 billion dollars to produce, while every next copy is essentially free.

What this new breed of money loosing company signifies is a shift of business models to the software-eat-world paradigm: high upfront capital investment, zero marginal cost, exceptionally strong consumer lock-in (thus profits) once you break through and dominate the market. There is nothing fundamentally different between Amazon Prime and MoviePass, they are both loss leaders designed to increase foothold in the market, with a view to later use that dominance to dictate the rules. One was built on good economics and well executed, the other is not and will fail, but it's essentially the same business move.

Post reply on HN