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MoviePass couldn’t afford to pay for movie tickets on Thursday

money.cnn.com

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Re: MoviePass couldn’t afford to pay for movie tickets on Thursday

#111

Post by acchow »

legitster wrote: post #20

If I am a traditional 'tech' company - I can afford to lose money when I am investing it in my platform or technology. It's like borrowing money to invest in your assets. For MoviePass, they are losing money and passing it off to theaters - it's like borrowing money to buy more ingredients for a failing restaurant. You can't charge less than the marginal cost, it doesn't make sense! I am trying to wrap my head around…

> You can't charge less than the marginal cost, it doesn't make sense!

It worked for Uber tho. And now they've raised prices in markets where they are established.

Re: MoviePass couldn’t afford to pay for movie tickets on Thursday

#112

Post by Cerium »

mdrzn wrote: post #2

A couple months ago there were optimist articles about how they'll "make it in the long run", having "enough money to keep going before being profitable". Cinemark even announced something similar. Guess it didn't last THAT long. I'm scared for other services with the same pricing scheme.

Cinemark's movie club sounds reasonable though. You get a ticket a month for $9. The tickets accumulate and multiple can be used at once [1].

I've been considering it since every couple months my wife and I like to see a movie.

[1] https://www.cinemark.com/movieclub

Re: MoviePass couldn’t afford to pay for movie tickets on Thursday

#113

Post by scarface74 »

Jasper_ wrote: post #40

First, they tried to strongarm AMC into getting a portion of ticket and concession sales [0]. When AMC said "lol no", MoviePass blocked AMC and tried to pass it off as AMC blocking MoviePass. They then lied about how much money they made AMC [1]. [0] https://deadline.com/2018/01/moviepass-lack-of-amc-theatres-... [1] https://variety.com/2018/film/news/amc-blasts-moviepass-fals...

And then AMC turned around and did thier own subscription service. Yes it cost more, but it’s sustainable, you don’t have to jump through hoops to use it and I’m really enjoying it.

Re: MoviePass couldn’t afford to pay for movie tickets on Thursday

#114

Post by slivym »

acchow wrote: post #111
legitster wrote: post #20

If I am a traditional 'tech' company - I can afford to lose money when I am investing it in my platform or technology. It's like borrowing money to invest in your assets. For MoviePass, they are losing money and passing it off to theaters - it's like borrowing money to buy more ingredients for a failing restaurant. You can't charge less than the marginal cost, it doesn't make sense! I am trying to wrap my head around…

> You can't charge less than the marginal cost, it doesn't make sense! It worked for Uber tho. And now they've raised prices in markets where they are established.

Uber has a network effect, so it's naturally monopolistic. Cinema passes have a network effect too (you only want the pass if the cinemas near you have it), but firstly it's much much weaker because you literally only need your local cinema, and secondly that's a network effect that helps the actual cinema, not a random middle man like moviepass.

Re: MoviePass couldn’t afford to pay for movie tickets on Thursday

#115

Post by scarface74 »

wildpeaks wrote: post #86
legitster wrote: post #20

If I am a traditional 'tech' company - I can afford to lose money when I am investing it in my platform or technology. It's like borrowing money to invest in your assets. For MoviePass, they are losing money and passing it off to theaters - it's like borrowing money to buy more ingredients for a failing restaurant. You can't charge less than the marginal cost, it doesn't make sense! I am trying to wrap my head around…

The Nerdwriter has a good video (short, just 6 minutes) about it: https://www.youtube.com/watch?v=w876zZZIb10 The gist of it is, they're hoping to grow so big that movie theaters will have no choice but to negotiate with them, to share part of the revenues they bring theaters from people who normally don't come watch movies on a whim anymore.

And the movie theatres just created thier own subscription service. Why should they pay a third party?

Re: MoviePass couldn’t afford to pay for movie tickets on Thursday

#116

Post by ProfessorLayton »

scarface74 wrote: post #113
Jasper_ wrote: post #40

First, they tried to strongarm AMC into getting a portion of ticket and concession sales [0]. When AMC said "lol no", MoviePass blocked AMC and tried to pass it off as AMC blocking MoviePass. They then lied about how much money they made AMC [1]. [0] https://deadline.com/2018/01/moviepass-lack-of-amc-theatres-... [1] https://variety.com/2018/film/news/amc-blasts-moviepass-fals...

And then AMC turned around and did thier own subscription service. Yes it cost more, but it’s sustainable, you don’t have to jump through hoops to use it and I’m really enjoying it.

In the end consumers got a subscription service from a major theatre for a lot less than buying individual tickets, something I doubt would have happened if it weren't for Moviepass.

Competition is good for consumers.

Re: MoviePass couldn’t afford to pay for movie tickets on Thursday

#117

Post by scarface74 »

dlwdlw wrote: post #99
legitster wrote: post #20

If I am a traditional 'tech' company - I can afford to lose money when I am investing it in my platform or technology. It's like borrowing money to invest in your assets. For MoviePass, they are losing money and passing it off to theaters - it's like borrowing money to buy more ingredients for a failing restaurant. You can't charge less than the marginal cost, it doesn't make sense! I am trying to wrap my head around…

Not saying it’s a good strategy but amazon seems to have done/is doing something similar. Each purchase is a loss when shipping is taken into account. But if the bleeding is slow enough the created ingress can be enough to shift the landscape so that there are new opportunities. Cultural lockin followed by price increases is a typical one. Like the hub and spoke model of pizza shops. Basically bet that spoke opportun…

Amazon has since stop losing money on shipping. Especially considering all of the money they make on Prime memberships.

Re: MoviePass couldn’t afford to pay for movie tickets on Thursday

#118

Post by crooked-v »

chrisseaton wrote: post #105
BOBOTWINSTON wrote: post #100

Earlier quoted context omitted.

It is an anecdotal response to your first point, but since you didn't place a threshold I'll say it anyway. I have two friends who I'd describe as average theatre goers. Maybe a movie every 2 - 3 months. Since using MoviePass they both average about two movies a month during 2018. I am not sure how sustained that behavior will be, but at atleast in this early stage it is lasting. As for the second point, he is arguin…

So the studio gained audience but (excluding the MoviePass susididy) not any money so what’s the benefit of that? In fact they might be setting an expectation that film tickets should be lower in people’s minds! If you give me free tickets to the cinema I might go. If you say now I’m in the habit can you charge me $1? No thanks not worth it now.

The benefactee in this scenario is the theater chain, not the studio, as they make most of their real profit from concessions, not selling seats.

Re: MoviePass couldn’t afford to pay for movie tickets on Thursday

#119

Post by listenallyall »

aslkdjaslkdj1 wrote: post #97
listenallyall wrote: post #92

If MoviePass fails, it's a failure of the Nash equilibrium due to stubbornness and lack of communication. MoviePass drives traffic to movies, benefiting both studios and theaters. Despite the existence of other subscription plans, if MP goes away, the majority of those tickets will never be purchased. MP could certainly have evolved into a sustainable plan, that restricted its users to seeing movies at off-times with…

You have any proof to back up this claim? My hunch is that the heaviest movie pass users were already heavy movie goers.

Likely true, but when you drop the consumer's marginal cost to zero, consumption will increase. Even if it was reasonably high to begin with -- i.e. 3x per month to 5, 1x per week to 2-3.

Re: MoviePass couldn’t afford to pay for movie tickets on Thursday

#120

Post by jetti »

avree wrote: post #54
izzydata wrote: post #41

Earlier quoted context omitted.

Over the last 20 years I often have food and / or drinks in my hands when I walk in. No 16 year old ticket taker is ever going to make a fuss about it, because they certainly don't care. It is odd how deeply rooted in everyone's mind it is that there will be a huge scene if you try and sneak in food.

Most American movie theaters allow outside food/drink, so long as it doesn't give off a noticeable odor and isn't alcoholic. The myth about needing to sneak in your food is just that—a myth.

From my experience working at a movie theater this is not true. While the staff may not care, the theater ownership definitely does. Concessions are where the majority of the money is made as ticket sales have to be split with the studios.
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