Earlier quoted context omitted.
My Bad. Updated the numbers.
840k is also not 22% of 125 million
Again sorry. Reversed my division and messed it up. And I am an engineer for god's sake.
It's 0.672 %.
Updated my answer.
MoviePass Owner Sued by Shareholders as Business Model Falters
61–70 of 108 posts
Re: MoviePass Owner Sued by Shareholders as Business Model Falters
#62MoviePass (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…
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 fearmongering for theaters to fork over millions to buy digital projectors. The last thing they want is tech that will empower moviegoers.
What you discover with the "exhibition industry" (what theaters like to call themselves) is that they are in the fast-food business. Popcorn, soda, candy, junk food: this is what the theater sells. The movie is there just to bring you into the building. But what they want you to buy is the concessions. Without the movie nobody in the world would wander into a theater and order a popcorn and a soda for $12 or whatever.
When I spoke with exhibitors, I found them to be like realtors: really paranoid, untrusting of their competition, and particularly untrusting of uppity little tech startups (can't really blame 'em, I mean, if a tech startup ever gets successful they tend to wipe out everything in their wake--witness Netflix, Amazon, Apple, Microsoft, Facebook, Craigslist, etc.)
Despite the fact that we had built an app that presented a compelling case for a $1 billion or higher bump in annual U.S. box office revenue--we basically came up with ways to get more people to go to more movies more often--the exhibitors would have none of it. They didn't trust it, they wanted nothing to do with it. ESPECIALLY if their competitors in the same city had the same tech. The idea of a mobile app that empowered moviegoers to get alerted to every moving coming, and track upcoming movies after you indicated you liked the trailer, and tracked your favorite stars/directors/etc, and tracked the reviews of your favorite critics, and tracked what your friends were planning to go see, none of that meant diddly to exhibitors.
It was the craziest thing I've ever seen.
The way theaters are trying to survive now is by focusing on what their core competence is: food. Notice how many theaters now sell hamburgers and pizza and sandwiches, and beer and wine, and so on. You go to a movie now, you may be set back for $30 in meal fees per person easily. For an exhibitor, that's nirvana.
Nah, MoviePass was doomed from day one.
Re: MoviePass Owner Sued by Shareholders as Business Model Falters
#63A better business model: $19.99 per month. $2/matinee | $3/non-matinee. $1 in 'movie cash' for every $5 spent on concessions. spend 15 -- get $3...meaning the $3 is basically waived for a non-matinee. Edit to clarify: This would then be more friendly towards theaters, encourage more $$ in concessions, and make them possibly give more deals/lower costs to moviepass... I think it would be more sustainable.
At which point it's $26/mo if you go to see two movies. Hardly a deal even in LA or NYC.
Re: MoviePass Owner Sued by Shareholders as Business Model Falters
#64Earlier 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.
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,…
Having Disney content available on all those other distribution channels makes their streaming service less compelling though. Whereas if you want to watch a Netflix series, you sign up for Netflix.
Also, Netflix is building a huge content catalog that has value outside their streaming ecosystem if they decide to leverage it that way. They could do theatrical releases and let cable do reruns of their shows. Maybe they will some day. But for now I think they see the greater CLTV in keeping that content exclusive to drive (and retain) monthly subscriptions.
Re: MoviePass Owner Sued by Shareholders as Business Model Falters
#65MoviePass (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.
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.
Re: MoviePass Owner Sued by Shareholders as Business Model Falters
#66Earlier quoted context omitted.
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!
> For $1M, they'll grow $2M in beans, I promise! You are reinforcing my point. If you do that, it would be fraud, plain and simple. You would have to pay the investors back and you will spend a couple of years in prison. You can't show up to the court and say, but your honour, they should have known better . Well, you can, but it would not change the court's decision in your favour. Communications with the investors…
One of those things isn’t like the others. Profitable and having a buyer are factual. Sustainable is a forecast, and you can definitely be wrong about forecasts with investors. That’s kind of the standard outcome.
Re: MoviePass Owner Sued by Shareholders as Business Model Falters
#67MoviePass (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…
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…
That isn't always true - e.g. Fandango was able to find success even when theaters wanted nothing to do with the internet, until all of them were forced to partner with it or risk being left out.
Re: MoviePass Owner Sued by Shareholders as Business Model Falters
#68Earlier quoted context omitted.
They looked at people's movie habits and wrongly applied that to an "all you can eat model". I'd guess the average person sees 6 movies a year. This is quite common. I worked at a telecom that sold 0.99 unlimited 1-day calling cards and we predicted would spend less than 1 hour on the phone. People spent an average of 2+ hours on calls which made the product lose money. And some people spent all day on the product.
Early adopters to moviepass were mostly movie fanatics that went to the theaters more than average. They could only ever make money if they convinced the people that hardly every go to the theaters to sign up en masse, but even at $10/month they couldn't get enough of that demographic before their cash ran out. It's not an entirely dissimilar premise as Netflix. If all of Netflix's users started streaming as much as…
That's not entirely true, since the majority of bandwidth is actually offloaded by ISPs with the Netflix Open Connect program. https://openconnect.netflix.com/en/. Sure, there'd be extra costs in distributing some of the more unused catalog to the machines, but realistically most people are going to be watching newer content en masse and not a large spread.
Re: MoviePass Owner Sued by Shareholders as Business Model Falters
#69Earlier quoted context omitted.
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,…
Having Disney content available on all those other distribution channels makes their streaming service less compelling though. Whereas if you want to watch a Netflix series, you sign up for Netflix. Also, Netflix is building a huge content catalog that has value outside their streaming ecosystem if they decide to leverage it that way. They could do theatrical releases and let cable do reruns of their shows. Maybe the…
Disney's streaming can afford to be less valuable. It's just additional revenue. Netflix's total revenue for 2017 was 11.69 Billion. Disney's revenue was $45 billion. Estimated are that once they combine with Fox, it will have revenue of close to $75 billion.
Another thing that makes Disney's content more compelling is that it's "evergreen" kids can watch the same shows over and over again. They will watch the first Toy Story movie just as excitedly as the last Pixar movie.
Re: MoviePass Owner Sued by Shareholders as Business Model Falters
#70Earlier quoted context omitted.
Your "Edit 2" math doesn't take into consideration any of the costs for Netflix's infrastructure or employees not related to content production, which is substantial.
Yes. With other operational expenses taken into account, maybe NF can produce 1000 episodes a year. That is a huge figure by any margin.
Divide by markets and genres and its not so much.