The Entire Economy Is MoviePass Now • Hacker News Board

Re: The Entire Economy Is MoviePass Now

#201

Post by matlock » Thu, May 17, 2018, 8:36 AM UTC

cornholio wrote: post #199

pwinnski wrote: post #87

Earlier quoted context omitted.

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…

But what you're saying is that eventually you'll make money on every transaction which just goes along with the comment made before. The joke is really about goods where you can't lower the cost or increase the price enough to make the economics work.

> The fist copy of Microsoft Windows might cost 1 billion dollars to produce, while every next copy is essentially free

You'd have to split R&D costs by the units sold here. If you spend 1B and sell 1000 copies a price of 100$ per copy won't help you.

Re: The Entire Economy Is MoviePass Now

#202

Post by vasco » Thu, May 17, 2018, 8:53 AM UTC

delecti wrote: post #149

slackoverflower wrote: post #104

Earlier quoted context omitted.

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.

Stopping adding costs is effectively increasing margins.

Re: The Entire Economy Is MoviePass Now

#203

Post by lmm » Thu, May 17, 2018, 8:55 AM UTC

Zombieball wrote: post #193

samfisher83 wrote: post #84

Earlier quoted context omitted.

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?

Reinvestment is only good when there are profitable investments to be made. AWS already dominates its market; maybe investing more wouldn't help it make any more money, in which case it would be better to start paying dividends.

Re: The Entire Economy Is MoviePass Now

#204

Post by hueving » Thu, May 17, 2018, 9:42 AM UTC

nickparker wrote: post #115

crazygringo wrote: post #32

Earlier quoted context omitted.

> 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…

Jobs aren't intrinsically good. These startup jobs might be, but it's an insanely complex system you're trying to suss a value judgement out of. If these startups didn't exist, the money going into them would be seeking returns elsewhere. There would probably be jobs involved there too, and the people working those jobs might be doing something better for society than building a short-lived money-losing consumer prod…

These companies losing investor money isn't anything like the broken window fallacy.

If I pay a company $0.75 for a $1 widget with a $0.25 VC subsidy, I get the $1 widget and I'm ahead a widget. Nobody had to destroy a widget to make me buy a new one.

The underlying widget suppliers still get the full price so the money is flowing into the economy. The VCs are the only ones losing anything.

So paying people to clean parks is not better for the economy than VC subsidizing blue apron meals.

The mistake you are making is assuming that a company losing money cannot provide more value to society than it loses.

Re: The Entire Economy Is MoviePass Now

#205

Post by salvar » Thu, May 17, 2018, 9:51 AM UTC

adventured wrote: post #45

The entire economy.... Talk about an extreme click-bait headline. Their fraudulent premise is extracted from this single setup: "Over all, 76 percent of the companies that went public last year were unprofitable on a per-share basis in the year leading up to their initial offerings" There were a whopping 30 tech IPOs in 2017 (tech & biotech IPOs substantially tilt the percentage of unprofitable listings; there has be…

> The entire economy.... Talk about an extreme click-bait headline.

I don't think the headline meant to imply that literally the entire economy is MoviePass.

Re: The Entire Economy Is MoviePass Now

#206

Post by cimmanom » Thu, May 17, 2018, 9:51 AM UTC

adventured wrote: post #68

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 H…

Given how much larger our population is, what would be shocking would be if our social safety nets were smaller than those of Canada, Australia, or South Korea.

Re: The Entire Economy Is MoviePass Now

#207

Post by cimmanom » Thu, May 17, 2018, 9:58 AM UTC

intrasight wrote: post #191

tlynchpin wrote: post #145

Earlier quoted context omitted.

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 savin…

What would the incentive be for the service provider to participate in this? Most of these customers aren't going to cancel anyway.

Re: The Entire Economy Is MoviePass Now

#208

Post by telltruth » Thu, May 17, 2018, 10:00 AM UTC

It’s just basic economics. Let’s say you are CEO of a company. Your CFO informs you that you are going to make $1B in profit this quarter. You will be a fool to leave the money on table and give it back to shareholders. That doesn’t buy you anything. You don’t gain any competitive advantage or significant stock price boost (because market keeps going up anyway). From the eyes of CEO, you are simply throwing away your profit money in to a garbedge bin. Instead, you would take out another billion dollar in credit at tiny interest rates based on your growth. Use all that up in expansions, building moat, acquisitions, long term projects and then show $1B in loss to get full tax credits. Market would love you even more because you are building up expectations for even bigger things to come as well as becoming safer bet by gaining bigger moat.

Taking losses and burning cash to aquire customers also makes sense when mountain of cheap investment money and credit lines are easily available. Remember, IPO is the major event for cashing out for most investors. Balance sheets before or after don’t matter too much as long as you can cross that proverbial finish line called IPO. Once that event happens, you take a dip in so-called “river of money” fueled by massive trillion dollar funds like Blackrock (which are in turn fueled by our 401Ks) and all your sins are washed away over night.

Current economy and business models wouldn’t make sense to people who are still living in past when money wasn’t cheap and companies were valued for dividends they returned. In a way, new way is actually all good. This is what allows taking on high risk bets. Without these models, we wouldn’t have massive cloud infrastructure built up so fast without worrying about chicken-and-egg problem. We wouldn’t have app based taxies available so fast virtually all of the world without worrying about establishment. We also wouldn’t have such massive investments in AI research without worrying about actual impact. All these stuff simply wouldn’t be possible in 60s and 70s because companies would be reluctant to do investments on such massive scale without being extremely confident and diligent. Most likely these stuff would have gotten killed right away. Hype is good. Cheap money is great.

Re: The Entire Economy Is MoviePass Now

#209

Post by michaelt » Thu, May 17, 2018, 10:06 AM UTC

pas wrote: post #198

kelnos wrote: post #190

Earlier quoted context omitted.

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?

In the UK, several cinema chains offer subscriptions where, by buying an annual subscription, you can see as many films as you like. The fee is equivalent to somewhere between 2 and 4 movies per month.

If you're visiting the cinema very regularly, this saves money.

They can do this because they own the theatre, so when a subscription is used, it only costs them the _opportunity_ cost of one seat - which is very little, unless the showing is sold out, and they still make money on snacks. As MoviePass doesn't own the theatres, they pay the _retail_ price for every ticket a subscriber uses.

Re: The Entire Economy Is MoviePass Now

#210

Post by JansjoFromIkea » Thu, May 17, 2018, 10:18 AM UTC

What exactly happens the entertainment industry when MoviePass fails? When Netflix stop deciding to lose colossal sums of money each year and their competitors get to scale back as a result? When a large number of people don't have enough disposable money to justify paying $10 a month on Patreon to a podcast they can get for free?

I do feel like the free movie ticket business in general is a bit of a mad bubble that's gonna burst in a big way. A huge number of people currently going to the cinema seem to be going on things like this instead of directly paying the huge ticket prices themselves. I get free tickets weekly from my health insurance to a cinema that shows stuff I'd never dream of paying to see, you'd have to imagine the chain and distributor are getting some reasonable kind of kickback from each time I go though.