MoviePass couldn’t afford to pay for movie tickets on Thursday • Hacker News Board

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

#91

Post by SilverCurve » Fri, Jul 27, 2018, 5:52 PM UTC

nodesocket wrote: post #89

wildpeaks wrote: post #86

Earlier quoted context omitted.

The Nerdwriter has a good video (short, just 6 minutes) about it: https://www.youtube.com/watch?v=w876zZZIb10 The gist of it is, they're hoping to grow so big that movie theaters will have no choice but to negotiate with them, to share part of the revenues they bring theaters from people who normally don't come watch movies on a whim anymore.

But why not increase the membership fee marginally in the meantime to stay afloat? I suspect the vast majority of members would stay. Also as another user posted below, set a cap on the number of movies you can view per month and offer a premium unlimited membership upsell.

They are starting to do it. One of their new features is charging a few dollars on "hot" show time.

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

#92

Post by listenallyall » Fri, Jul 27, 2018, 5:53 PM UTC

If MoviePass fails, it's a failure of the Nash equilibrium due to stubbornness and lack of communication. MoviePass drives traffic to movies, benefiting both studios and theaters. Despite the existence of other subscription plans, if MP goes away, the majority of those tickets will never be purchased. MP could certainly have evolved into a sustainable plan, that restricted its users to seeing movies at off-times with low demand, at nearly 100% marginal profit to the theaters, even if those tickets were sold at a significant discount that MP could reasonably afford.

Instead, theaters, especially AMC, refused to negotiate and in doing so, shot themselves in the foot. AMC's subscription plan is especially attractive to high-volume users on which it will likely lose money, further, it encourages them to use their free tickets at peak times for the most popular movies in the most expensive formats. When an AMC subscriber in NYC reserves a seat for a Marvel film in IMAX on opening weekend, that's a $20+ ticket that AMC can't sell to a paying customer because the theater is sold out. AMC's profit margin is already quite thin, and getting worse, according to its financial filings. Its CEO is very full of himself but doesn't seem like much of a strategist.

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

#93

Post by khuey » Fri, Jul 27, 2018, 5:58 PM UTC

pc86 wrote: post #66

gorbachev wrote: post #9

Earlier quoted context omitted.

What are the chances the CEO will disclose those terms to prospective employees of his new companies? Near zero? That's a serious landmine for employees who get part of their comp as stock options. Edit: edited to reflect what I actually wanted to say (future companies instead of current company)

Why would you disclose it to employees? Do employees receiving stock typically get to review term sheets and ownership schedules before accepting an offer? I'm sure it would come up in future investors' due diligence but I'm not sure it's information they're required to disclose to employees.

Any employee who wants to value stock (and options) in a private company at more than zero should get that.

They won't give it to you of course, which is why employees should always value illiquid private company stock at zero.

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

#94

Post by chrisseaton » Fri, Jul 27, 2018, 5:59 PM UTC

listenallyall wrote: post #92

If MoviePass fails, it's a failure of the Nash equilibrium due to stubbornness and lack of communication. MoviePass drives traffic to movies, benefiting both studios and theaters. Despite the existence of other subscription plans, if MP goes away, the majority of those tickets will never be purchased. MP could certainly have evolved into a sustainable plan, that restricted its users to seeing movies at off-times with…

> MoviePass drives traffic to movies

Does it? Were those people going anyway? Would they go if they had to pay one cent more?

They’re just a middleman aren’t they? How are they driving anything or adding any value?

> that's a $20+ ticket that AMC can't sell to a paying customer

But the subscribers are paying customers aren’t they? Do you mean they can’t sell it to another paying customer? So you’re just saying they can’t sell things twice?

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

#95

Post by apocalyptic0n3 » Fri, Jul 27, 2018, 6:02 PM UTC

avree wrote: post #54

izzydata wrote: post #41

Earlier quoted context omitted.

Over the last 20 years I often have food and / or drinks in my hands when I walk in. No 16 year old ticket taker is ever going to make a fuss about it, because they certainly don't care. It is odd how deeply rooted in everyone's mind it is that there will be a huge scene if you try and sneak in food.

Most American movie theaters allow outside food/drink, so long as it doesn't give off a noticeable odor and isn't alcoholic. The myth about needing to sneak in your food is just that—a myth.

I know Harkins (a southwest chain) allows outside food so long as it is non-disruptive, non-alcoholic, and they do not sell it. You can't bring your own popcorn or M&Ms or soda, but if you wanted to bring in tea or a coffee from one of the Starbucks in the strip mall or even McDonald's, they're generally A-okay with it. I've seen people ask about it numerous times and they are always allowed to bring it in.

They just want you to purchase their food but seem to realize that every piece of food brought in is not a lost sale, unless that food is something they already sell themselves. Which, in my mind at least, seems reasonable.

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

#96

Post by Robin_Message » Fri, Jul 27, 2018, 6:03 PM UTC

MusaTheRedGuard wrote: post #51

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 crazy. The data is basically worthless. I honestly don't know if they will survive for more than a few months. I was just thinking, what could they possibly do to survive as long as possible? They could introduce incentives to reduce the number of movies people saw a week? Maybe some kind of credit system, where customers built up points towards a premium membership. They could also start taking the most expensi…

Weaponizing customer data like that would literally be illegal in the EU, so doesn't seem like the best plan...

Other ideas might work!

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

#97

Post by aslkdjaslkdj1 » Fri, Jul 27, 2018, 6:05 PM UTC

listenallyall wrote: post #92

If MoviePass fails, it's a failure of the Nash equilibrium due to stubbornness and lack of communication. MoviePass drives traffic to movies, benefiting both studios and theaters. Despite the existence of other subscription plans, if MP goes away, the majority of those tickets will never be purchased. MP could certainly have evolved into a sustainable plan, that restricted its users to seeing movies at off-times with…

You have any proof to back up this claim? My hunch is that the heaviest movie pass users were already heavy movie goers.

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

#98

Post by brianbreslin » Fri, Jul 27, 2018, 6:06 PM UTC

In my mind moviepass is proof that the current pricing of tickets is too high. 5M people were willing to fork over $300M a year in subscription fees to go pay likely $20+/visit in concessions ($1.2B if they only go 1x a month).

Moviepass plan was to control as much leverage as they could in relation to the movie industry as quickly as possible. Betting they could borrow against this growth. They started producing their own films and doing all sorts of things to own that chunk of the ecosystem.

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

#99

Post by dlwdlw » Fri, Jul 27, 2018, 6:07 PM UTC

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 opportunities will appear if the hub is engaging enough.

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

#100

Post by BOBOTWINSTON » Fri, Jul 27, 2018, 6:08 PM UTC

chrisseaton wrote: post #94

listenallyall wrote: post #92

If MoviePass fails, it's a failure of the Nash equilibrium due to stubbornness and lack of communication. MoviePass drives traffic to movies, benefiting both studios and theaters. Despite the existence of other subscription plans, if MP goes away, the majority of those tickets will never be purchased. MP could certainly have evolved into a sustainable plan, that restricted its users to seeing movies at off-times with…

> MoviePass drives traffic to movies Does it? Were those people going anyway? Would they go if they had to pay one cent more? They’re just a middleman aren’t they? How are they driving anything or adding any value? > that's a $20+ ticket that AMC can't sell to a paying customer But the subscribers are paying customers aren’t they? Do you mean they can’t sell it to another paying customer? So you’re just saying they c…

It is an anecdotal response to your first point, but since you didn't place a threshold I'll say it anyway.

I have two friends who I'd describe as average theatre goers. Maybe a movie every 2 - 3 months. Since using MoviePass they both average about two movies a month during 2018. I am not sure how sustained that behavior will be, but at atleast in this early stage it is lasting.

As for the second point, he is arguing they never sell the ticket once. AMC does not get the money if the subscriber does not attend the film. So by fighting with MoviePass (as they have been), they never sell the ticket once.