This Startup Will Let You Go to the Movies Anytime for $10 a Month. It’s Probably Doomed.

Discussion in 'Movies and Shorts' started by Dreamwalker, Aug 17, 2017.

  1. Dreamwalker

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    A BLOG ABOUT BUSINESS AND ECONOMICS.
    AUG. 16 2017 7:09 PM

    By Jordan Weissmann

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    This was the best photo of an AMC movie theater available on the Reuters database, what are you going to do?

    Reuters

    Thanks to streaming services like Netflix and Spotify, Americans have gotten used to thinking about home entertainment as a $10-per-month, all-you-can-binge buffet. Now, a company run by one of Netflix's co-founders wants to bring a similar model to movie theaters—which are decidedly unhappy about it.

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    This week, the 6-year-old startup MoviePass announced that it was dropping the cost of its ticket subscription service to $9.95 a month. For a little more than the price of a large popcorn, users will (theoretically) be allowed to catch one flick every day at any theater in the country that accepts Mastercard. (According to the company's website, that covers 91 percent of theaters nationwide). However, the announcement drew a quick rebuke from AMC, the country's biggest cinema chain, which said in a statement that it was conferring with lawyers about whether it could block customers from using MoviePass at its theaters.

    It's unclear whether AMC can do such a thing. Then again, it might not need to, since MoviePass seems to be counting on AMC's long-term cooperation to survive.

    At the moment, MoviePass is poised to burn a prodigious pile of cash subsidizing the cost of its subscriptions. That's because every time a customer buys their movie ticket using one of the company's debit cards, it pays the theater for the full cost of admission. Given that the average film ticket cost $8.65 last year, MoviePass will end up losing money on every user who sees two or more showings a month. In big markets like New York, where catching the latest Avengers installment can easily cost $15, they'll come out behind on users who see just one movie a month.
     
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  2. SB3

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    Its crazy to think that 9$ is average when u pay almost 20$
     
  3. Winston Smith

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    @Dreamwalker thanks for the post! i'm all about entrepreneurship and "bid'ness"

    It's amazing that these investors, however, are still trying to apply the ridiculous 1990s "new economy" concepts ("companies don't need to show profit!") to today's tech upstarts. A subsidy model works fine if you're fleecing the government and taxpayers (**cough**cough**Tesla**cough), but how can you expect to have a viable business model that's based on losing revenue on every sale (!) and, as distributor, pissing off the producer/wholesaler? This model didn't work for Groupon (which is "rallying" at a laughably pathetic $4 a share, far below their initial IPO of $28) and Groupon has actual producer/wholesaler input.

    The business logic of this company reminds me of the punchline to this old SNL skit
    Watch First CitiWide Change Bank II from Saturday Night Live on NBC.com

    That being said, if you go to enough movies to make it worth your while as a consumer (it pays for itself after just a couple of films), by all means take advantage of this service before they file Chapter 7!

    EDIT: Ok, i see where they're coming from. They're going the Google route: they want to monitor your smart phone and sell your data, the movie is just a "loss leader."

    What to Know Before You Sign Up for That Insane MoviePass Deal

    While this model works for Uber and Google, what data does MoviePass thinks it's getting that someone would want to buy that can't already be obtained from Hollywood itself or Facebook analytics? I still say, go for it as a consumer. But from a business standpoint, if there is any value in this the movie chains will just come up with their own system, like Hulu networks pulled content from YouTube to do their own thing. I wouldn't put any money in a MoviePass IPO next year...

    EDIT EDIT: Lol. Sorry y'all. I know Bruh was just alerting to a deal with OP but I'm a business nerd. Looks like the studios are already planning to bypass MoviePass and the theatre chains:
    Hollywood, Apple Are Said to Mull Rental Plan, Defying Theaters
     
    #3 Winston Smith, Aug 18, 2017
    Last edited: Aug 18, 2017
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