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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

#221

Post by rhizome »

maerF0x0 wrote: post #79
jondiggsit wrote: post #14

Earlier quoted context omitted.

Is this a common strategy? Are you kidding? The entirety of Silicon Valley is predicated upon and funded by this business model. Almost every service provided by a SV startup is subsidized.

Its subsidized in its R&D cost though. Not in the marginal cost of servers/apis ... I sometimes joke like our first customer cost us $2M but our 2nd was wildly profitable!

Not in the marginal cost of servers/apis...

Have you ever heard of companies that buy services from other companies under the same VC?

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

#222

Post by listenallyall »

scarface74 wrote: post #144
listenallyall wrote: post #135

Earlier quoted context omitted.

The WSJ article says that's for standard 2D films. But A-List encourages subscribers to see 3-D, IMAX, Dolby, etc. It also says the studios aren't on board with the $8.99 figure and are seeking changes in AMC's calculations. https://www.bizjournals.com/losangeles/news/2018/06/25/amc-s... https://www.wsj.com/articles/hollywood-studios-fear-amcs-new... The studios are not going to sit back and accept just $5 per admiss…

I can’t find the numbers now, but Imax did make some kind of deal with AMC. https://deadline.com/2018/06/imax-approves-amc-theaters-new-... By “wouldn’t affect the overall economics”, I assume they meant that AMC promised them that the offset in revenue would be made up by the number of people seeing IMAX or they would make up the difference. Not they are paying full cost.

Of course IMAX is on board with AMC's plan. IMAX was one party that was credibly threatened by MoviePass, since MP customers were prevented from purchasing IMAX tickets. MP customers will see Mission Impossible tonight in normal 2D for free, reducing the demand for IMAX.

AMC completely flips the script. Its members can see IMAX films without any premium cost, even on opening weekend. Regular screen, or 3D IMAX for the same cost (both for free)? Of course, let's go see IMAX.

The problem for AMC is that it is now on the hook for paying the IMAX premium. Your article says, vaguely: "the theater chain will ensure there is no reduction in Imax’s overall economics." So it's a no-lose proposition for IMAX but AMC now has to cover the cost of tickets sold to A-Listers.

Here is a link to Regal theaters showing Mission Impossible tonight: https://www.regmovies.com/movies/mission-impossible-fallout/... Notice how nearly every showing says "No Passes"? That's because giving away a free seat to a sold-out show reduces ticket revenue. That's been basic policy at movie theaters for decades. AMC has decided to toss that model out the window.

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

#224

Post by gamblor956 »

btian wrote: post #220
gamblor956 wrote: post #166

Earlier quoted context omitted.

The only advantage a movie theater has is that it receives movies a few months earlier. If movie theaters close that solves that advantage. Not sure what sort of crappy theaters you have nearby, but the 70 foot screen on my local theater absolutely dwarfs the 70 inch screeen of your TV. Highest-gamut color range, laser projection. Fully tuned Dolby Atmos surround sound speaker system. Reclining, reserved seats. Wine,…

And you don't have to travel to the theater. It would be nice if studios can release Blurays at the same time as theaters.

Not going to happen for the movies worth watching in the theaters.

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

#225

Post by misterprime »

lbotos wrote: post #154
misterprime wrote: post #141

Earlier quoted context omitted.

Being able to go to a different chain is nice. For example, near home there is Regal theater, but near where everyone hangs out there is an AMC. I'm considering switching from MoviePass to AMC A-Stubs or whatever it's called, but will lose out on the opportunity to walk to my local theater for a free flick.

The best part about this is that you called them "free flicks". Are they actually? I was under the impression you were paying something for them?

Yeah, I'm definitely going to at least 1 movie each month. So MoviePass was a no-brainer. Walking to the theater and watching The Foreigner felt completely free to me. I would never have seen that in theaters. That night I would have been home alone playing games or watching TV.

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

#226

Post by 1024core »

reaperducer wrote: post #143
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…

An emergency loan with no change to the service whatsoever? They are really having a deer in the headlights moment. Reminds me of a startup I worked with once. The goal wasn't to make a viable product. It was to make a big splash and get bought. 10 Start a product/service 20 Make a big hype and get lots of publicity 30 Get bought by some larger company that sees you as a threat/opportunity 40 Founders get big cash pa…

Unfortunately, I know of a startup that did exactly this and made out like a bandit.

An acquaintance of mine started some Java/Web startup when the web and Java were just taking off (1998? 1999?). He made a lot of noise. Then he hired a top B-school alumnus to specifically get his company bought out, and promised him a large chunk (30%? I don't remember) of the company if it went for more than $X million. Well, lo and behold, the B-school guy found a sucker and the company sold for close to $50M. This guy retired right away, and now cruises around as an "angel investor".

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

#227

Post by ams6110 »

rtkwe wrote: post #214
sf_rob wrote: post #138

Earlier quoted context omitted.

>You can't charge less than the marginal cost, it doesn't make sense! The old joke is "Sure we have marginal losses, but we'll make up for it with volume!"

I mean the plan seems to be that except the marginal losses are supposed to go down as they reach higher volumes. Attract the heavy movie goers first and lose money on them till you can attract enough light movie goers that will buy this and forget about so you can afford the people seeing more than 2 movies a month. There's other ways to drop that marginal cost like getting deals from theaters on tickets for bringin…

That might have worked before Netflix and Amazon Prime and other online movie services. The light movie goers are all online now. Only the heavy duty die-hards are still going to theaters to see first-run films. I haven't gone to a theater movie in over three years.

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

#228

Post by acjohnson55 »

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…

But isn't the marginal cost of a movie seat pretty low for the overwhelming majority of showtimes? I think they're banking on eventually becoming a reseller of inventory the chains themselves can't move.

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

#229

Post by LargeWu »

balls187 wrote: post #216
inetknght wrote: post #174

Earlier quoted context omitted.

I have to 100% disagree about your assessment of ethics. If you're hiding things from your employees so you can get your bailout and shaft everyone else, how is that ethical?

You're statement has an underlying assumption that founders are hiding things from employees. As stated above, I think its that employees aren't asking the right questions. It's like when purchasing a vehicle; it's up to the buyer to educate themselves. Savvy buyers get better deals. We'd like to think of our industry as a meritocracy; but it's still largely based on humans with monkey brains,and greed is a powerful…

You'd better believe they are absolutely hiding things. Dont believe me? Go into the CEO's office and ask about the financials, and see what they do.

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

#230

Post by balls187 »

LargeWu wrote: post #229
balls187 wrote: post #216

Earlier quoted context omitted.

You're statement has an underlying assumption that founders are hiding things from employees. As stated above, I think its that employees aren't asking the right questions. It's like when purchasing a vehicle; it's up to the buyer to educate themselves. Savvy buyers get better deals. We'd like to think of our industry as a meritocracy; but it's still largely based on humans with monkey brains,and greed is a powerful…

You'd better believe they are absolutely hiding things. Dont believe me? Go into the CEO's office and ask about the financials, and see what they do.

Who are we talking about here--founding employees who are presumably taking lower than market salaries for more equity, or someone else?

I asked our CEO to give us an update on our runway, and he told me. I guess he could be lying, but I don't see what purpose that would serve.

At my previous company, the CFO was invited to our semi annual engineering meetings, and he'd give us the last quarterly numbers, along with a lengthy Q&A.

At the startup I co-founded before that, the CEO/co-founder was very transparent about our financials and gave me all the time I required to understand the impacts of the business decisions he was making.

Before that, at INRIX, at least once a month during our weekly all-hands, we'd get our financials detailed to us.

Being a founder requires optics, progressive disclosure, and getting creative with the representation of data, but in my experience, I've yet to be in a situation where I felt I was lied to, or purposefully misled.

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