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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

#201

Post by AmericanChopper »

legitster wrote: post #27
tompetry wrote: post #18

I think the subscription model for theatres makes a lot of sense for all involved. Getting more people to the theatres (where they buy other stuff) and creating larger audiences who didn't previously visit theatres. The pricing and terms of MoviePass are unsustainable, but I think there will be more subscriptions for theatres that are tried.

Agreed. I think their general conceit is that people enjoy the movie-going experience, but they are put off by the price. There is truth to this. That said, they really botched the strategy - they could have bootstrapped the whole thing and slowly come down in price.

I’m not sure how you could bootstrap this idea. The only way to undercut the theatres is to lose money.

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

#202

Post by Reedx »

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 data they are gathering cannot be more valuable than the cost of a movie ticket.

Yeah, but they think they can get the loss low enough that it becomes feasible to overcome that with data. And it goes beyond just knowing what movies someone is watching.

For example, they know the exact location and time of where people are going to be (the app requires location to work). So MoviePass can use that info to upsell their customers to restaurants/etc around the theater and even transportation there and back. Create packages around this.

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

#203

Post by endymi0n »

ironjunkie wrote: post #168
matte_black wrote: post #167

Earlier quoted context omitted.

What if founders were personally liable for losses?

I find it non acceptable that founders get out of LowBall acquisitions with a couple Million$ , while early employees that worked almost as much, will in the best case get out with 100k$, in the worst case nothing (depending on the shares classes)

On the ethical side, I fully agree, however that‘s not how things work. Investors are insured through liquidation preferences. If shit hits the fan, it‘s very probable that they will get at least their money back with a firesale or an aquihire. For all of these variants of an ordered shutdown, you‘ll need some coherency though. Nobody will buy a sinking ship with 90% of the crew already gone.

Im cases like these, founders are in a strong position, even if on paper, their shares would be worth zero. So for their service to stay on deck until the last moment and let the band play (in order to save some investor money), they are usually generously paid from the remains — the term you‘re looking for is carveout.

Punishing founders will make the investors look bad and cost big money, so both sides collude at the cost of the employees.

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

#204

Post by astrodust »

pandasun wrote: post #177
astrodust wrote: post #169

Earlier quoted context omitted.

If by "worked" you mean "burned through ten billion in cash" then sure, it worked.

True, I think that maybe Uber found the fine line (could be pure luck) between creating enough buzz right before running out of cash (several times) and simply going bankrupt.

That Q1 profit was interesting, but it's nowhere near a trend.

They may need another ten or twenty billion, or maybe infinite billions because their business model is critically flawed.

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

#206

Post by pbreit »

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…

It’s the dumbest thing I’ve ever seen and I’m still bullish on subscription commerce in general. A multi-brand theater pass doesn’t make much sense. Chains are much better off offering their own subscription. I’ve heard theaters pay distributors per ticket sold (not per screening or day) so it doesn’t have the dynamics of a perishable good. I don’t understand who would lend it money or buy its shares at this point.

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

#207

Post by SilasX »

citrablue wrote: post #136
acchow wrote: post #111

Earlier quoted context omitted.

> 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 also plans to cut costs significantly in the future w/ autonomous cars. May be a pipe dream, but if they believe in the successful widespread deployment of the technology, that means they just have to stay afloat until then. MoviePass could start to make their own movies, but that would require a substantial investment and isn't really comparable

Uber will not invent SDCs much sooner than the other companies, at which point they will have to cut their own prices too to compete with the other SDC companies. So there would be a very small window for monopoly profits.

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

#208

Post by superfrank »

dwighttk wrote: post #123
scarface74 wrote: post #113

Earlier quoted context omitted.

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.

>it’s sustainable Is it? 3 movies/week for $20/month is about $1.67/ movie. I think it is just around until movie pass kicks the bucket (at least at that price)

I would be absolutely shocked if the average movie goer went to the movies 3 times per week, even with the AMC pass.

Anecdotally, I know about 15 people who have MoviePass. One couple I know goes probably in that 2-3 times per week range. Another guy I know, tries to go once on each weekend day (but skips every once in a while). Pretty much everyone else falls into the 0-3 times per month.

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

#209

Post by cuckcuckspruce »

tiatia123 wrote: post #195

Theaters make their money on drinks and food, no? What bothered me in the US is that I can't buy a beer in the cinema. I always had to bring my own :-)

Cinemas around here allow people to purchase beer no problem.

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

#210

Post by pbreit »

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 30% take rate and zero marginal cost. Wrong example.
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