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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

#191

Post by stuckinarut »

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's losses to shipping can actually be lowered by improving logistics, alternative delivery systems, and negotiating better contracts because of the massive volume.

Plus I won't believe the "every purchase is a loss" narrative unless I see evidence. Especially recently.

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

#192

Post by PeterisP »

slg wrote: post #4

On what terms would you actually lend MoviePass $5m? It would seem surprising at this point if MoviePass makes it to September.

Generally, collateral - often including stuff owned not by the company, but pledged extra by the owners.

Also e.g. "Proceeds from a planned stock sale must also be used to repay the debt." - so they're betting that the company won't fold until a stock sale and it will manage to sell at least a $5+ million of stock; a reasonable "greater fool" bet can be made here when you earn a tidy profit if someone else pays for the company and lose the money if it turns out that you're the last one in the line and there's no greater fool than you.

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

#193

Post by stuckinarut »

Jtsummers wrote: post #28
surge wrote: post #21

Earlier quoted context omitted.

Maybe hoping to make their money back when people let their subscriptions idle during the off season for movies...but this is most attractive avid movie goers so I don't see this working. People who don't go to movies all the time likely won't get it.

The problem with this idea is that (at $9.95) someone in my area needs to see one movie in the evening and they're ahead. Two movies, and MoviePass needs them to not see a movie for a full month to almost catchup, and they'd still be behind by $1.50. During the big movie seasons, it's easy to see 2-5 movies in a month. I've only seen 2 movies (since April) that I wouldn't have seen without MoviePass. I've seen 15 mov…

I think they are about even with me.

Would be behind, but their card wouldn't work last time I went. oh well.

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

#194

Post by stuckinarut »

ironjunkie wrote: post #102
Jtsummers wrote: post #28

Earlier quoted context omitted.

The problem with this idea is that (at $9.95) someone in my area needs to see one movie in the evening and they're ahead. Two movies, and MoviePass needs them to not see a movie for a full month to almost catchup, and they'd still be behind by $1.50. During the big movie seasons, it's easy to see 2-5 movies in a month. I've only seen 2 movies (since April) that I wouldn't have seen without MoviePass. I've seen 15 mov…

you didn't really break even as you said it yourself you would only have paid for two movies out of the 15. The question is, do you really value the other 13 movies at (70$/13) a piece ? In my case probably not.

I've seen 1, maybe 2, movies with moviepass that I otherwise wouldn't have gone to the theatre for.

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

#196

Post by stuckinarut »

gambiting wrote: post #33

They still keep thinking that people will eventually treat it like they do gym memberships - buy them, but ultimately not use them. But there is a certain social expectation to have a gym membership and at least pretend you are doing something about your physical fitness. I have one through work and the last time I've been to that gym was over a year ago. But I can't be bothered to go to HR and actually cancel my acc…

Gym memberships don't cost the gym more everytime people use them.

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

#197

Post by acd »

A lot of startups has not sound business ideas. Rather they have been fueled by cheap below real market central bank interest rates seeking higher return than zero.

Some startup founders are hustlers.

The children story by hc Andersen about the emperor without clothes. trying to convince he has clothes comes to mind. https://en.m.wikipedia.org/wiki/The_Emperor%27s_New_Clothes

There will be a shake down of real pegususes versus so called unicorns. One magical creature has wings the other does not.

Of course people will be attracted to services selling services below market rate but it is not long term economically sustainable.

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

#198

Post by stuckinarut »

kristianc wrote: post #68
tjbarkley wrote: post #44

Earlier quoted context omitted.

They lose a little money on equipment maintenance over time, but it's nothing like going to a movie.

I’d imagine even a moderately engaged gym user would lose the gym money on every visit, in staffing costs alone. The marginal cost of each user rises too, as people that are unable to get on machine are more likely to churn. It is however usually outweighed by the huge numbers of people who simply do nothing with their subscription.

I go to the gym and I interact with 1, sometimes 2 staff members. The people at the front who check my card and sometimes the guy who works in the locker room if I can't get mine open.

They are on staff anyways. It costs them nothing extra.

What is true is that they can understaff (and have less equipment) than if they had 100% regular participation.

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

#199

Post by stuckinarut »

ChuckMcM wrote: post #7
Waterluvian wrote: post #5

Was the entire play of MoviePass to pay for people's movie tickets until they make it and then jack up the prices + negotiate with cinemas for better deals? What was the "make it" condition? Is this a common strategy? It also loosely reminds me of the dotcom era strategy. It doesn't matter if we're not making any real money, we have a lot of users. Surely that can be converted into money somehow. We're worth billions…

I think of Moviepass as the pets.com of 21st century VC madness. That said, they clearly had a great pitch, I'd love to see their series A pitch deck.

Did they have VC?

They are a part of a publicly traded company.

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

#200

Post by londons_explore »

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…

Many subscription services start to make money as users start to use the service less and less but are too lazy to cancel the subscription.
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