MoviePass Owner Sued by Shareholders as Business Model Falters • Hacker News Board

Re: MoviePass Owner Sued by Shareholders as Business Model Falters

#21

Post by mehrzad » Thu, Aug 16, 2018, 1:56 AM UTC

jrs95 wrote: post #18

drawkbox wrote: post #10

In the end a service like MoviePass will be needed, noone wants one just tied to one theater chain most likely though it will be that way for a while if not indefinitely. It looks like this iteration of a movie service independent of movie theaters just won't be it. As it has been said, theaters are empty much of the time and they make major margins from their concessions. You'd think more of them would have gone for…

Honestly nevermind being tied to one theater chain, I wouldn’t mind being tied to one theater. I go to the same one almost all of the time anyways. And even if I didn’t, there are enough AMCs around that it’s not much of a value add for me to have something that works at different chains.

Well there are no A24 movies at the AMC theaters near me, so I need at least one theater that plays independent movies and one that plays wide release. That's why Moviepass is still worth it for me. (disclaimer I have some shares)

Re: MoviePass Owner Sued by Shareholders as Business Model Falters

#22

Post by kosei » Thu, Aug 16, 2018, 1:58 AM UTC

differentView wrote: post #12

kosei wrote: post #7

> MoviePass parent Helios & Matheson Analytics Inc. omitted and misstated its financial prospects in press releases when it touted a "sustainable" business model, the shareholders claim in lawsuits filed in Manhattan federal court. Is this for real? Any outsider could have seen that this model was unsustainable from the start, with the business buying tickets at full price and then selling them at an unlimited rate f…

How would an outsider know if they had any kickback deals and/or if they were selling usage data or generating income some other way?

https://www.wired.com/story/moviepass-second-act/

> It pays theaters full price for each ticket, whether a member visits once or 31 times a month. It has to provide for customer service to support those 1.5 million people, many of whom have lobbed valid complaints—MoviePass issues debit cards to each of its members, and initially couldn't keep up with demand—as the service struggled with its rapid expansion. And that’s on top of the usual, unglamorous costs of running any business. (Backends don’t maintain themselves.)

Re: MoviePass Owner Sued by Shareholders as Business Model Falters

#23

Post by flukus » Thu, Aug 16, 2018, 1:58 AM UTC

SN76477 wrote: post #6

I think MoviePass has been successful in showing that the industry needs a shakeup. I dont know what their monetization model was, I dont think they knew what it was.

They need a shakeup, but at the moment the biggest threat is people having big TV's and cheaper snacks at home. The only reason they still exist is because they have a monopoly on movies for a limited time where they don't have to compete with other distribution channels. And that movie studios like to screw up the sound tracks to make watching at home as unpleasant as possible.

I think most theaters will disappear in the long term and they'll become a luxury experience, more like visiting an imax once a year than going to see a movie once a month. Services like MoviePass wouldn't be necessary in that world.

Re: MoviePass Owner Sued by Shareholders as Business Model Falters

#24

Post by [deleted] » Thu, Aug 16, 2018, 1:59 AM UTC

moviegoerguy wrote: post #17

pat2man wrote: post #5

Earlier quoted context omitted.

Worked for Fandango...

Fandango is owned by NBCUniversal and WarnerMedia. They have an interest in the relationship to begin with. On top of that, they charge a convenience fee above what the theater charges for a ticket. Quite different from MoviePass.

[deleted]

Re: MoviePass Owner Sued by Shareholders as Business Model Falters

#25

Post by schaefer » Thu, Aug 16, 2018, 2:01 AM UTC

SN76477 wrote: post #6

I think MoviePass has been successful in showing that the industry needs a shakeup. I dont know what their monetization model was, I dont think they knew what it was.

For me, specifically, it did just the opposite. I look at new listings every Friday, and theaters in my town never seem to have interesting movies.

So even at their low prices it wasn't even worth it to me to try a MoviePass subscription.

Re: MoviePass Owner Sued by Shareholders as Business Model Falters

#26

Post by swozey » Thu, Aug 16, 2018, 2:02 AM UTC

jrs95 wrote: post #18

drawkbox wrote: post #10

In the end a service like MoviePass will be needed, noone wants one just tied to one theater chain most likely though it will be that way for a while if not indefinitely. It looks like this iteration of a movie service independent of movie theaters just won't be it. As it has been said, theaters are empty much of the time and they make major margins from their concessions. You'd think more of them would have gone for…

Honestly nevermind being tied to one theater chain, I wouldn’t mind being tied to one theater. I go to the same one almost all of the time anyways. And even if I didn’t, there are enough AMCs around that it’s not much of a value add for me to have something that works at different chains.

I live in a city with Alamo Drafthouses and I refuse to ever visit an AMC/Regal/etc after moving here. I'm fine with them making their own monthly payment programs.

Re: MoviePass Owner Sued by Shareholders as Business Model Falters

#27

Post by kosei » Thu, Aug 16, 2018, 2:02 AM UTC

smnrchrds wrote: post #9

kosei wrote: post #7

> MoviePass parent Helios & Matheson Analytics Inc. omitted and misstated its financial prospects in press releases when it touted a "sustainable" business model, the shareholders claim in lawsuits filed in Manhattan federal court. Is this for real? Any outsider could have seen that this model was unsustainable from the start, with the business buying tickets at full price and then selling them at an unlimited rate f…

If the company actually made false statements, it would be illegal. They should have known better than to believe me is not a valid defence for securities fraud.

Sure, if they falsified their books, that's absolutely illegal. But "they told me their business model was sustainable, and I believed them and gave them my money" doesn't seem like a reasonable argument either.

If that's how those investors fund their companies, I've got this nifty bag of magic beans they might be interested in... For $1M, they'll grow $2M in beans, I promise!

Re: MoviePass Owner Sued by Shareholders as Business Model Falters

#28

Post by adrr » Thu, Aug 16, 2018, 2:06 AM UTC

kosei wrote: post #7

> MoviePass parent Helios & Matheson Analytics Inc. omitted and misstated its financial prospects in press releases when it touted a "sustainable" business model, the shareholders claim in lawsuits filed in Manhattan federal court. Is this for real? Any outsider could have seen that this model was unsustainable from the start, with the business buying tickets at full price and then selling them at an unlimited rate f…

They looked at people's movie habits and wrongly applied that to an "all you can eat model". I'd guess the average person sees 6 movies a year.

This is quite common. I worked at a telecom that sold 0.99 unlimited 1-day calling cards and we predicted would spend less than 1 hour on the phone. People spent an average of 2+ hours on calls which made the product lose money. And some people spent all day on the product.

Re: MoviePass Owner Sued by Shareholders as Business Model Falters

#29

Post by gremlinsinc » Thu, Aug 16, 2018, 2:07 AM UTC

A better business model:

$19.99 per month. $2/matinee | $3/non-matinee. $1 in 'movie cash' for every $5 spent on concessions. spend 15 -- get $3...meaning the $3 is basically waived for a non-matinee.

Edit to clarify: This would then be more friendly towards theaters, encourage more $$ in concessions, and make them possibly give more deals/lower costs to moviepass... I think it would be more sustainable.

Re: MoviePass Owner Sued by Shareholders as Business Model Falters

#30

Post by paxys » Thu, Aug 16, 2018, 2:08 AM UTC

MoviePass (incorrectly) assumed it would be able to strike sweetheart deals with all theater chains, thus drastically reducing overall costs. It even sounds good in theory - why wouldn't the theater want to get paid for seats that would have otherwise gone empty and have more people inside buying concessions?

It could even have worked - maybe five or ten years ago. Now the theaters themselves quickly realized the value of such a subscription model, and made the logical decision to cut out MoviePass entirely and just offer it themselves.

It's similar to how Netflix would never exist had it started out today, because no studio would surrender their back-catalogs to them for pennies.