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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

#41

Post by EGreg »

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.

That seems to be the defense Alex Jones’ layer used.

Re: MoviePass Owner Sued by Shareholders as Business Model Falters

#42

Post by kumarvvr »

devoply wrote: post #36
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. 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.

> on producing very good content

This is not necessarily true. Even moderately good content, catering to a specific audience will suffice.

IIRC, NF has loads of user data and behavioural data to help it guide in production.

Assuming an average, not fully satisfied consumer subscribes to NF for 1 year, that's 120 $ per consumer.

Assume a show that takes 100 million to produce, say 3 seasons. To make the production break-even, NF will need around 840000 paying subscribers (currently it has around 125 million subscribers, so about 0.672% of its total subscriber base) , who don't even have to watch it in the first place. Now that's a very small number compared to the amount of paying subscribers currently on it's platform.

To me it seems to be a very profitable model, at least for 10 - 15 years from now.

Edit : Updated the math.

Edit 2 :

An average episode costs between 3 - 5 million. Lets take 5 million as the cost per episode. With 125 million subscribers paying 120 $ per year, Netflix can produce 3000 episodes. That's just for 1 year. Also, in India, many shows cost way less than 5 million USD. But I have seen NF splurge of shows (it is hiring top notch actors in India for it's shows, where traditionally and culturally, a movie star playing in a "TV" series usually means an end-of-career move, so it's a big thing to work on a NF show here in India)

Re: MoviePass Owner Sued by Shareholders as Business Model Falters

#43

Post by mynameisvlad »

devoply wrote: post #36
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. 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.

> it has not mastered this at all

This is incredibly subjective. They've definitely shown they can produce such content. They had more nominations than any other provider, including HBO for this year's Emmy Awards.

Re: MoviePass Owner Sued by Shareholders as Business Model Falters

#44

Post by scarface74 »

devoply wrote: post #36
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. 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.

HBO and all of the pay channels survive off of $10 a month subscriptions. It doesn’t have to be very good content. It just has to be good enough.

The real issue with Netflix is that it has to fund all of its content via subscription revenue. The upcoming Disney service doesn’t. By the time it’s content hits the service, it’s slready made money from theatrical releases, pay tv services(?), video on demand, DVD sales, cable TV etc.

Re: MoviePass Owner Sued by Shareholders as Business Model Falters

#45

Post by fred256 »

kumarvvr wrote: post #42
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.

> on producing very good content This is not necessarily true. Even moderately good content, catering to a specific audience will suffice. IIRC, NF has loads of user data and behavioural data to help it guide in production. Assuming an average, not fully satisfied consumer subscribes to NF for 1 year, that's 120 $ per consumer. Assume a show that takes 100 million to produce, say 3 seasons. To make the production bre…

$10/month = $120/year, not $1200/year.

Re: MoviePass Owner Sued by Shareholders as Business Model Falters

#46

Post by bdcravens »

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…

> In the end a service like MoviePass will be needed, noone wants one just tied to one theater chain

I also wish all restaurants were on all the delivery services. I don't think it'll happen, nor do I have an expectation that consolidation is inevitable.

Re: MoviePass Owner Sued by Shareholders as Business Model Falters

#47

Post by indecisive_user »

swozey wrote: post #26
jrs95 wrote: post #18

Earlier quoted context omitted.

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.

Have you been to an AMC lately? The one near me upgraded a lot of their show rooms and though I've never been to an Alamo Drafthouse, they both seem to have a lot of the same features from what I can find.

Reserved seating, print e-tickets at their robo kiosk, comfortable reclining seats, full bar with pub food. I know that AD theaters have a lot of niche showings and cool events, but as far as just watching the latest blockbuster, are there other advantages?

Re: MoviePass Owner Sued by Shareholders as Business Model Falters

#48

Post by ghaff »

flukus wrote: post #23
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 i…

That's pretty much me and movies today. I have the once or twice a year IMAX in the theatre but otherwise just watch at home.

OTOH, there are definitely demographics for whom going to the theatre is a low-friction activity.

Re: MoviePass Owner Sued by Shareholders as Business Model Falters

#49

Post by scarface74 »

drawkbox wrote: post #34
jrs95 wrote: post #18

Earlier quoted context omitted.

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.

Plenty of customers probably don't mind, but the moment they will mind is when they want to see a movie that is sold out at one of their common theaters and go to another theater not in the same chain. People do tend to use the same theaters except for special runs of movies or when movies are so big that you might need to go to another theater due to sold out showings at your favorites. I could see this non-issue of…

Plenty of customers probably don't mind, but the moment they will mind is when they want to see a movie that is sold out at one of their common theaters and go to another theater not in the same chain.

With AMC Stubs A+, you buy the ticket in advance from the app (something you couldn’t do with movie pass). You would know if a movie is sold out. Some of the AMCs have reserved seating where you can choose your seat in advance from the app. That lets us get in after the commercials and trailers and still be guaranteed a good seat.

Re: MoviePass Owner Sued by Shareholders as Business Model Falters

#50

Post by kumarvvr »

fred256 wrote: post #45
kumarvvr wrote: post #42

Earlier quoted context omitted.

> on producing very good content This is not necessarily true. Even moderately good content, catering to a specific audience will suffice. IIRC, NF has loads of user data and behavioural data to help it guide in production. Assuming an average, not fully satisfied consumer subscribes to NF for 1 year, that's 120 $ per consumer. Assume a show that takes 100 million to produce, say 3 seasons. To make the production bre…

$10/month = $120/year, not $1200/year.

My Bad. Updated the numbers.
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