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MoviePass Owner Sued by Shareholders as Business Model Falters

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Re: MoviePass Owner Sued by Shareholders as Business Model Falters

#81

Post by rmc »

paxys wrote: post #30

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 val…

> 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.

Netflix: "The Goal Is to Become HBO Faster Than HBO Can Become Us"

https://gizmodo.com/5980103/netflix-the-goal-is-to-become-hb...

Re: MoviePass Owner Sued by Shareholders as Business Model Falters

#82

Post by Crazometer »

hristov wrote: post #77
paxys wrote: post #30

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 val…

Nope it would not have worked. You see movie theater owners have to pay the movie owner a per viewer fee. So it is not merely about filling up empty seats. The entire "filling up empty seats" story relies on the misconception that if you have empty seats there is a zero marginal cost to extra viewers, but that is not the case, movie owners charge per ticket sold. The deal movie pass offered theaters was "if you make…

The marginal cost is likely significantly lower than the ticketed price. I'm sure there is a win-win there somewhere.

In Australia tickets are about $20 ea retail. Many of the cinemas have deals regularly offering tickets for around $15. If you are with certain telcos you can get tickets all year round for $13.

Re: MoviePass Owner Sued by Shareholders as Business Model Falters

#83

Post by [deleted] »

Crazometer wrote: post #82
hristov wrote: post #77

Earlier quoted context omitted.

Nope it would not have worked. You see movie theater owners have to pay the movie owner a per viewer fee. So it is not merely about filling up empty seats. The entire "filling up empty seats" story relies on the misconception that if you have empty seats there is a zero marginal cost to extra viewers, but that is not the case, movie owners charge per ticket sold. The deal movie pass offered theaters was "if you make…

The marginal cost is likely significantly lower than the ticketed price. I'm sure there is a win-win there somewhere. In Australia tickets are about $20 ea retail. Many of the cinemas have deals regularly offering tickets for around $15. If you are with certain telcos you can get tickets all year round for $13.

[deleted]

Re: MoviePass Owner Sued by Shareholders as Business Model Falters

#84

Post by talltimtom »

kosei wrote: post #27
smnrchrds wrote: post #9

Earlier quoted context omitted.

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!

Why not? The alternative would be that any company could outright lie to investors and the go to court with a defense of “well you honor, they believed our lies and gave us money, so really, they are to blame!”

That’s just wrong.

Re: MoviePass Owner Sued by Shareholders as Business Model Falters

#85

Post by talltimtom »

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…

> noone wants one just tied to one theater chain

Not being American I have to ask why? Could you elaborate on that need? I see maybe a dozen movies a year, at mostly 3 cinemas all in the same chain. Why a need for multiple chains? Do only some chains show some movies or something?

Re: MoviePass Owner Sued by Shareholders as Business Model Falters

#86

Post by phobosdeimos »

paxys wrote: post #30

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 val…

As I understand it Americans buy a lot of food and drink at movie theaters at exorbitant prices without a care in the world. That is were the income comes from.

Re: MoviePass Owner Sued by Shareholders as Business Model Falters

#87

Post by phobosdeimos »

jasonkester wrote: post #80
brianstorms wrote: post #62

Earlier quoted context omitted.

Problem is, it's nigh impossible for a tech company to "strike deals with all the theater chains," be they sweetheart or not so sweet. The movie theater biz is one of the most inept around, stuck in the 1950's in terms of its business model. I did a tech startup that tried to bring social/mobile/local tech to the movie theater experience, and the theaters balked. They fear technology. It took a decade of fearmongerin…

Any chance the theaters were being rational and it was in fact you who were mistaken? The idea of an app that makes people watch more movies does seem pretty far fetched the way you describe it. A more logical conclusion would be that you either didn't sell your thing to them very well (as you haven't sold it to us) or that they, being in the movie business, saw something about it that you, being in the app business,…

Its not far fetched because such apps actually exist and do everything he/she describes. https://play.google.com/store/apps/details?id=net.sharewire....

Re: MoviePass Owner Sued by Shareholders as Business Model Falters

#88

Post by phobosdeimos »

paxys wrote: post #65
devoply wrote: post #36

Earlier quoted context omitted.

> 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. I personally doubt the longevity of Netflix. On it's own it's not much more than a cable channel, like say AMC. Its success depends on producing very good content... it has not mastered this at all. Over time most studios will back out of their deals with it.

Netflix has been losing third-party content very rapidly for a while now, but users seem to be sticking regardless. Scrolling through their front page right now I'd say a good 80-90% of shows I see are Netflix-produced, and it isn't going to be hard for anyone to find something that is good enough to watch.

Globally Netflix doesn't have much competition. HBO, Amazon, Hulu etc are America focused while Netflix has done a lot to cater to local markets.

Re: MoviePass Owner Sued by Shareholders as Business Model Falters

#89

Post by hristov »

Crazometer wrote: post #82
hristov wrote: post #77

Earlier quoted context omitted.

Nope it would not have worked. You see movie theater owners have to pay the movie owner a per viewer fee. So it is not merely about filling up empty seats. The entire "filling up empty seats" story relies on the misconception that if you have empty seats there is a zero marginal cost to extra viewers, but that is not the case, movie owners charge per ticket sold. The deal movie pass offered theaters was "if you make…

The marginal cost is likely significantly lower than the ticketed price. I'm sure there is a win-win there somewhere. In Australia tickets are about $20 ea retail. Many of the cinemas have deals regularly offering tickets for around $15. If you are with certain telcos you can get tickets all year round for $13.

I am not sure your statement about the marginal cost is correct. This is a closely guided secret among studios and exhibitors, but the little anecdotal information that leaks out indicates that for well publicized major releases the studios want pretty much the entirety of the ticket price and the theater can only make money off of concessions. There isn't much room for moviepass in here.

Even for movies that are not as well popular and give more margin to exhibitors, it is very hard to see how you can accommodate moviepass and the crazy discounts they give. Lets take a person that sees about 4 movies per month which should be kind of usual for moviepass. That gives about $2.50 per showing. This has to be shared between moviepass, the theater and the movie owner. While before moviepass, only the theater and the movie owner could share $10.

I don't see how this does not end up severely impacting the profitability of the theater, the movie owner or both. I really do not see a win-win in the moviepass pricing model.

Re: MoviePass Owner Sued by Shareholders as Business Model Falters

#90

Post by shriver »

Crazometer wrote: post #82
hristov wrote: post #77

Earlier quoted context omitted.

Nope it would not have worked. You see movie theater owners have to pay the movie owner a per viewer fee. So it is not merely about filling up empty seats. The entire "filling up empty seats" story relies on the misconception that if you have empty seats there is a zero marginal cost to extra viewers, but that is not the case, movie owners charge per ticket sold. The deal movie pass offered theaters was "if you make…

The marginal cost is likely significantly lower than the ticketed price. I'm sure there is a win-win there somewhere. In Australia tickets are about $20 ea retail. Many of the cinemas have deals regularly offering tickets for around $15. If you are with certain telcos you can get tickets all year round for $13.

That's actually incredibly complex - generally the way the revenue model works is that the Movie company will negotiate a certain percentage that depends on how old the movie is. So in opening weekend 100% of the revenue is probably going to the movie, but 4 weeks in the theater is probably taking 90% of the revenue. So yes, if you can fill those empty seats in the 4 week old showing you can make bank. But MoviePass has no mechanism for increasing sales of 4 week old movies particularly, they're just as likely to canabalize your existing week 1 sales.

Now I don't know what the Australian system is like but in the UK we have an insurance company from whom you can get 2-4-1 vouchers every tuesday if you're a subscriber. Well that solves the exact problem you're talking about - it incentivizes people to buy the tickets that don't normally get filled, whilst not providing any discount during premium times.

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