12 ms·

How Does MoviePass Make Money?

108 points by dsr12 9y ago

libertine 9y ago
I still remember when movie theaters provided a different experience - and I'm in my late 20's, so it was not that long ago. Movie theaters became just another living room - people go there chat, comment and eat during the movie just like they were at home. It became such an obnoxious experience, where people are shoved into a room and door is closed. This goes to say: movie theaters had a lot of distribution costs reduced over the years, and probably even the reform of projectors isn't such a big deal today due to digital distribution. MoviePass is aiming to give them volume, at a reduced margin - that's how.
- schizoidboy 9y ago
  If the main business model works (see my other comment), then theaters' margins needn't be reduced. I guess MoviePass thinks they deserve a cut of concessions since they're saving theaters - which might be true - but theaters control the end product, so I doubt they'd share revenue. They're more likely to compete against MoviePass if the plan works.
  - libertine 9y ago
    I've seen your post - it does make sense to be that way indeed.
  - lsc 9y ago
    >but theaters control the end product, so I doubt they'd share revenue. They're more likely to compete against MoviePass if the plan works. This seems the most likely to me; I mean, if I were to buy a ticket subscription, I'd want that at the theaters that I go to often; I am happy to pay full price when I go somewhere unusual. This means there's almost no network effect... my favorite theater could put up a subscription service that only worked at that one location, and it would instantly have more value than MoviePass that might or might not include access to that theater next month. Even better would be a regional service, but in this case, at least on the customer end, I don't think making the service national adds very much value at all.
- scarface74 9y ago
  It depends on the theatre. I only go to a regular movie theatre when I'm back home seeing my parents. I enjoy the theatre experience where you get reclining seats and you get to reserve your seat beforehand. The next step is the dinner and movie experience where you get to both enjoy reserved seating and get food served while you're eating. Those theatres by necessity aren't as crowded and you have a much better experience. The ticket costs for the movie and dinner type places are usually cheaper since they can make it up on food. We also still have a decent drive in in our area where the sound comes through your fm radio. You can see two new releases there for like $8 a person. You can bring your own food - usually we do take out. Movie pass is a no go for popular movies for us because you can't use it to reserve movies in advance online.
  - slfnflctd 9y ago
    > The ticket costs for the movie and dinner type places are usually cheaper since they can make it up on food For some of them, this may be true. However, one I visited in the Midwest put their 'eat & watch' section in an exclusive balcony above the standard seating area and was charging almost double per ticket (along with sub-Applebee's food at Chili's prices). They have apparently been in business for over five years doing this. I enjoyed the experience, but I ultimately didn't feel it was worth the extra cost, and the sound of silverware on ceramic plates & bowls was a bit distracting. Handheld food and fancy paper/plastic plates and utensils would be how I'd run that operation.
    - scarface74 9y ago
      I have seen both. I went to a theatre in Miami where you had to pay more for the eat and dine experience and just to be in the lobby. Where we usually go - Studio Movie Grill - you can usually get a ticket for $5. The prices of the food and the quality is around AppleBeds like you said. That's true about the silverware, it's never been distracting but another place we go - a small place with about a capacity of 70 that has live music uses paper plates and utensils.
  - dawnerd 9y ago
    moviepass works for new movies, you just have to show up first thing in the morning and reserve a night show. Never had problems getting a good seat myself at a regal with reclining/reserved seats.
- cryptozeus 9y ago
  Hummm I have not experienced this, atleast in big amc type theaters. What I like about movie theater is that its one of the last places that exist where nobody is on the phone and you are enjoying distraction free.
- eloisant 9y ago
  I've seen that kind of behaviour in the US (and that was 10 years ago already). I've never seen it in Europe however, I just thought that's the way Americans enjoy a movie in a theater (a way that really turns me off, actually).
  - nxc18 9y ago
    Where in the US have you been watching movies? I’ve never experienced this. The worst I’ve seen (and it bugs the heck out of me still) is people clapping when something big happens, but that is still quite rare. I’ve seen films in upstate NY, SF, SD, LA area, and beautiful New Hampshire.
    - eloisant 9y ago
      That was in the Bay Area (SF, Mountain View, San Mateo...)
      - adventured 9y ago
        I've noticed a huge difference between movie behavior based on city. It makes sense that it would vary by regional culture. In Los Angeles, clapping was semi-common, particularly during the early days of a big new release; it seemed to vary in direct proportion to how many people were in the theater. I consider that extremely obnoxious. I've almost never seen clapping during a movie anywhere on the east coast however.
  - gambiting 9y ago
    Same here - and I've been to theatres in multiple EU countries. People definitely don't talk, absolutely don't talk on their phones(they would be kicked out if they did), and eating - meh, just the standard popcorn stuff. I've been to one theatre which also served proper food but you actually sat at a table not in a theatre seat, it felt more like a restaurant with the film playing in the background.
    - Udik 9y ago
dingo_bat 9y ago
Because the marginal cost for a theatre to show a movie is virtually zero.
- blairbeckwith 9y ago
  That has no effect on MoviePass. As per the article, what’s “interesting” (for certain definitions of interesting) is that MoviePass pays the theatres for the full price of the tickets for each user.
  - throwaway287391 9y ago
    And the theatre companies are complaining about this, which blows my mind. It’s a phenomenally good deal for them at the moment — tons of free revenue they otherwise wouldn’t see at all, courtesy of VC capital. What a bunch of whiners.
    - schizoidboy 9y ago
      The article quotes AMC about why they're complaining: they worry that if MoviePass fails, people will sour even more on theaters and that could be their death knell (btw, love the use of harrumphed!): > The largest theater chain in the US instead described MoviePass as as an existential threat. “That price level is unsustainable and only sets up consumers for ultimate disappointment down the road if or when the product can no longer be fulfilled,” the company harrumphed. (emphasis added)
      - throwaway287391 9y ago
        I did read that and understand the potential downside for them in the long term. I still think publicly complaining about free money is a really bad look and just exposes them as the curmudgeonly dinosaurs they are.
        schizoidboy 9y ago
        It's amazing how curmudgeony they've been. Their comment that MoviePass is an "existential threat" is fascinating as a window into the minds of people just trying to survive rather than thrive.
schizoidboy 9y ago
I thought their business model was like a gym: hope that most people won't use it. (Source: I have MoviePass and I'm seeing less than 1 movie per month because I'm too busy :-D) Instead, this article claims it's: 1. Studio of movie $M pays MoviePass $X to market it to subscribers. 2. Subscribers see a movie they otherwise wouldn't pay for. MoviePass eats this cost ($Y). 3. Subscribers' word-of-mouth network effects bring in extra revenue $E that otherwise wouldn't have come in. 4. MoviePass stays alive if $E > $X > $Y.
- draw_down 9y ago
  If people don’t use it then MoviePass won’t get any data for analytics.
- dublidu 9y ago
  MoviePass can’t use the gym model because most people actually like going to the movies, it’s not aspirational. MoviePass also has much higher cost per visit, since they have to pay full price to AMC.
- deleted 9y ago
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neuralFatigue 9y ago
They also now take cuts from ticket prices and upto a 20% cut from concessions. More information here: https://techcrunch.com/2018/01/26/moviepass-pulls-out-of-amcs-top-theaters-as-negotiations-fail/ https://techcrunch.com/2018/01/26/moviepass-pulls-out-of-amc... The article makes it sound like Moviepass now has more leverage than the theatres themselves, which is super interesting.
- jrs95 9y ago
  Based on another article I saw, this doesn’t seem to be the case with AMC.[1] Basically, all of MoviePass’ subscribers is still a tiny portion of AMC’s sales, so they’re refusing to share any of their revenue with MoviePass. [1] https://www.theverge.com/2018/1/26/16936952/moviepass-amc-theatre-feud-movie-tickets-deceptive-earnings-statement https://www.theverge.com/2018/1/26/16936952/moviepass-amc-th...
mschuster91 9y ago
> Helios and Matheson, an analytics company which has a majority stake in MoviePass This here is the juice: Big data. The more customers they have, the better - they have validated full names, birthdates, addresses and CC numbers (and most likely also ethnicity) linked with the data when they visited what movie and even if the customers repeatedly visited a movie. MoviePass has, effectively, four distinct customers: a) the moviegoers themselves, where MoviePass makes a profit on everyone watching less than 1 movie a month b) the vast amount of adtech/big data/consumer analytics companies for which this data is a goldmine c) the movie studios which can (as shown in the article) use MoviePass to promote movies d) the cinemas which profit off the customers wanting to eat and drink They have, of course, monetized a) and begun to discover how to monetize c) - it will be interesting if they find a way to monetize the data.
- utnick 9y ago
  Is that data that valuable though? Its not that unique, off the top of my head there are several companies that have similar datasets, Every movie theatre chain, every online movie booking service, every movie review site
  - mschuster91 9y ago
    Yes, because: - the theatre chains only have mostly generic datasets (the audience for movie X is mostly young white males) while MoviePass can do far more detailed analysis (and, in theory, could pass detailed questionnaires after you watched a movie, thus gathering more personalized data) - online movie booking services (at least in my social bubble) are only used for movies where people think they don't have a chance to get a ticket without an early reservation - movie review sites only have tiny bits of data about the readers, and the reviewer dataset is skewed - it only provides data about the people caring enough to do a review.
    - alexwilde 9y ago
      I agree with this mostly. However, the data coming from MoviePass may be flawed. I'm much more likely to see a movie I would never normally pay to see with a MoviePass subscription.
Spooky23 9y ago
A: It almost certainly doesn’t make money. Since you have to buy the ticket at the theater, they are probably trying to sell analytics re: influencing selection. Good luck with that.
xivzgrev 9y ago
I don't quite follow the angle of promoting smaller studios' movies. If I am such a studio, and pay moviepass $100k to push a movie, and then that results in $1M tickets sold thru MoviePass, and I get $500k (or whatever), didn't MoviePass just lose $900k? MoviePass is both the marketing channel AND consumer. The studio has to make a profit and that has to come from somewhere - MoviePass' profit.
- toast0 9y ago
  Ah, but it their customers watched other movies, they would have lost $1M, so it's better. If the intent is to get movie attendance data at any cost (as it seems), getting it at less cost is better.
  - xivzgrev 9y ago
    True. How do you know they would've gone to see a movie though? That's what seems weird about this whole gravy train - the various drivers of the business clash with each other. More movies per person, more data, but more margin loss. Fewer movies per person, more margin, less data. More studio deals, more revenue, less margin. I think they're exploring various business models and finding where the sustainable value is. Will be interesting to see!
  - Udik 9y ago
    This is a way to reduce the costs, but it can't be a way to make any profit (or just break even). You'll always burn a lot of money. I can't believe there isn't a way to get movie attendance data for less than, say, 5$ per data point.
tacomonstrous 9y ago
At least in my case, by continuing to charge me monthly even after I canceled the service. Their customer service is non-existent, so I had to file a dispute with my credit card company to make it stop.
jon-wood 9y ago
At least in the UK each of the big cinema chains runs there own equivalent to this, and they push their staff hard to sell passes because the actual seat costs them a negligible amount of money, and people who “aren’t paying” for the seat are more likely to buy food and drink.
- deleted 9y ago
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praneshp 9y ago
Heads up from a former customer that just cancelled: I was a huge fan 3 months ago, but they've been dropping theaters left and right. Around mountain view, they have gone and dropped both theaters I watch movies in. In my opinion, this will be a better program if there was a guarantee that theaters will stay for X months.
deleted 9y ago
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jdlyga 9y ago
How do so many other companies like this make money? For example, HQ: the live trivia game show app that gives away a few thousand dollars multiple times per day. There's no ads, and no in app purchases. Besides burning through VC money like it's 1998, what's the business model?
- sudhirj 9y ago
  No ads doesn't mean your data isn't being used for ads. It's likely being sold to orthogonal adtech businesses. i.e. the company collecting the data is rarely the one using it, it usually just sells it.
  - cwyers 9y ago
    And how well does that work out? My experience with ad targeting is that it's mostly awful. Amazon can track every book I purchase through them, and the ads for books to buy on my Kindle are awful. Facebook has oodles of information about me, and if I turn off AdBlock for a moment there, the ads I see are... diabetes test strips (I do not have diabetes) and something involving Brook Shields that I bet is a total sham. The only online ads I see where data on me, and not just inventory, seems to play a major role is retargeting, where I look at something on Amazon and it's shown to me again in an ad in case I changed my mind about not buying it. The whole adtech industry is in awful shape, and the idea that MoviePass can be profitable by being such a periphery part of the adtech industry is laughable. People will just tell Facebook and Twitter what movies they've seen for free, there's no reason to subsidize movie tickets to get that data. This is a case of "let's spend VC money like water to get enough customers to get a huge valuation and then figure out a business model."
    - supreme_sublime 9y ago
      I'm curious, does Amazon continue to recommend items you either just bought or are similar to something you recently bought? I get this all the time and it is annoying. It seems like the recommended stuff is related to my searches and doesn't get changed by my purchases. I think the whole online ad industry is broken. I don't know why people keep pouring money into it. Most people have learned to ignore ads, or they use an ad blocker. I don't care to see an ad for something I already bought. I doubt a system like this would actually work, but I'd explicitly tell them what kind of products I'm looking for if they asked. This passive "we can get into their mind through searches" doesn't work very well.
neovive 9y ago
I wonder how much longer the theater experience will command such a high premium. Beyond a true IMAX experience, the theater doesn't seem to add much value for average movies. One possible pivot for MoviePass would be to partner with Netflix, Amazon, HBO, or Hulu to run exclusive "members-only" premiers of their content in theaters. I could see some value in the community aspect of the theater for some of the more popular streaming shows.
- subpixel 9y ago
  For me, a movie theater is subpar to my apartment. I would much rather watch new releases on a streaming site than shlep to a theater, fight the desire to waste money on bad snacks, and sell my viewing history to god knows who.
  - gamblor956 9y ago
    I have a big screen 4k HDR TV, a 7.1 Dolby Atmos system, and very comfortable recliners. But I would never consider a movie theater a subpar experience to my condo for any movie worth seeing on the big screen. Maybe I'm just lucky that I live in Tinseltown and we know how to operate good theaters here, but every major-chain local theater has laser projectors, massive sound systems, and reserved reclining seats. The concession stands offer beer, wine, and cooked foods. Security regularly patrols the theaters during screenings to make sure that people aren't on their phones or talking.
- rhino369 9y ago
  Part of it is seeing movies 3 months before DVD. Discount for delay happens in other entertainment industries--like video games.
jrochkind1 9y ago
http://www.businessinsider.com/how-does-moviepass-make-money-2017-8 http://www.businessinsider.com/how-does-moviepass-make-money... > The same day it announced the $10-a-month plan, MoviePass raised cash by selling a majority stake to the data firm Helios and Matheson Analytics Inc.. With a new price-point designed to attract as many subscribers as possible, MoviePass is hoping to attract a large enough user base so as to be able to monetize it. > “If you get a trailer right now for Spiderman on Facebook, Facebook can’t tell if you ever actually go to the movie. We can,” he told Wired. “We can tell if you look at 'Spider-Man' and look at 'Wonder Woman' and 'Mission: Impossible,' we can tell you exactly what movie you went to out of all three trailers.” > Farnsworth envisions movie studios using MoviePass' valuable data to do targeted marketing for their films. Once MoviePass has millions of subscribers, its ability fill seats can make the difference between a hit movie or a flop, he explained. MoviePass plans to hold an IPO in March, he noted.
- cwyers 9y ago
  > “If you get a trailer right now for Spiderman on Facebook, Facebook can’t tell if you ever actually go to the movie. We can,” he told Wired. “We can tell if you look at 'Spider-Man' and look at 'Wonder Woman' and 'Mission: Impossible,' we can tell you exactly what movie you went to out of all three trailers.” Oh bull. So many people tag themselves in Facebook posts when they go to the movies. Facebook absolutely has enough data to determine this.
  - adjkant 9y ago
    Maybe for your friend group, but absolutely not mine (20-25). That market is huge for advertisers. Thar said I can't imagine their losses ever being recouped in ads.
    - cwyers 9y ago
      Maybe I am mistaken, but I find it hard to believe that if people in that demo are on Facebook enough to see movie trailers there that they wouldn't then post about the movie they just saw.
ricardobeat 9y ago
Is what they are doing even legal? Co-opting movie goers into their debit cards and then using that power to extort the movie theaters for money? Imagine how much money your bank could make if they started doing this...
- ricardobeat 9y ago
  /s
haily 9y ago
I think most people are missing the point here. MoviePass has many ways to monetize from begin to end. It currently has more then 1.5 million subscribers & growing very fast (fastest subscription service growth ever, even faster then netflix). Most people miss the opportunities MoviePass has. It will control the demand & distribution of movies through its subscribers. Movie theater goers have been declining year over year and MoviePass will help reverse this. It currently makes money by a) subscriptions $9.95/month b) $2-3 rebate per ticket contracts with about 1000 theaters (5 new contracts a week are signed) c) 20-30% of concession revenue with about 1000 theaters (5 new contracts a week are signed) d) Bought "America Animal" movie rights for North American release at Sundance Festival

108 points by dsr12 9y ago

I still remember when movie theaters provided a different experience - and I'm in my late 20's, so it was not that long ago. Movie theaters became just another living room - people go there chat, comment and eat during the movie just like they were at home. It became such an obnoxious experience, where people are shoved into a room and door is closed. This goes to say: movie theaters had a lot of distribution costs reduced over the years, and probably even the reform of projectors isn't such a big deal today due to digital distribution. MoviePass is aiming to give them volume, at a reduced margin - that's how.

schizoidboy 9y ago
If the main business model works (see my other comment), then theaters' margins needn't be reduced. I guess MoviePass thinks they deserve a cut of concessions since they're saving theaters - which might be true - but theaters control the end product, so I doubt they'd share revenue. They're more likely to compete against MoviePass if the plan works.
- libertine 9y ago
  I've seen your post - it does make sense to be that way indeed.
- lsc 9y ago
  >but theaters control the end product, so I doubt they'd share revenue. They're more likely to compete against MoviePass if the plan works. This seems the most likely to me; I mean, if I were to buy a ticket subscription, I'd want that at the theaters that I go to often; I am happy to pay full price when I go somewhere unusual. This means there's almost no network effect... my favorite theater could put up a subscription service that only worked at that one location, and it would instantly have more value than MoviePass that might or might not include access to that theater next month. Even better would be a regional service, but in this case, at least on the customer end, I don't think making the service national adds very much value at all.
scarface74 9y ago
It depends on the theatre. I only go to a regular movie theatre when I'm back home seeing my parents. I enjoy the theatre experience where you get reclining seats and you get to reserve your seat beforehand. The next step is the dinner and movie experience where you get to both enjoy reserved seating and get food served while you're eating. Those theatres by necessity aren't as crowded and you have a much better experience. The ticket costs for the movie and dinner type places are usually cheaper since they can make it up on food. We also still have a decent drive in in our area where the sound comes through your fm radio. You can see two new releases there for like $8 a person. You can bring your own food - usually we do take out. Movie pass is a no go for popular movies for us because you can't use it to reserve movies in advance online.
- slfnflctd 9y ago
  > The ticket costs for the movie and dinner type places are usually cheaper since they can make it up on food For some of them, this may be true. However, one I visited in the Midwest put their 'eat & watch' section in an exclusive balcony above the standard seating area and was charging almost double per ticket (along with sub-Applebee's food at Chili's prices). They have apparently been in business for over five years doing this. I enjoyed the experience, but I ultimately didn't feel it was worth the extra cost, and the sound of silverware on ceramic plates & bowls was a bit distracting. Handheld food and fancy paper/plastic plates and utensils would be how I'd run that operation.
  - scarface74 9y ago
    I have seen both. I went to a theatre in Miami where you had to pay more for the eat and dine experience and just to be in the lobby. Where we usually go - Studio Movie Grill - you can usually get a ticket for $5. The prices of the food and the quality is around AppleBeds like you said. That's true about the silverware, it's never been distracting but another place we go - a small place with about a capacity of 70 that has live music uses paper plates and utensils.
- dawnerd 9y ago
  moviepass works for new movies, you just have to show up first thing in the morning and reserve a night show. Never had problems getting a good seat myself at a regal with reclining/reserved seats.
cryptozeus 9y ago
Hummm I have not experienced this, atleast in big amc type theaters. What I like about movie theater is that its one of the last places that exist where nobody is on the phone and you are enjoying distraction free.
eloisant 9y ago
I've seen that kind of behaviour in the US (and that was 10 years ago already). I've never seen it in Europe however, I just thought that's the way Americans enjoy a movie in a theater (a way that really turns me off, actually).
- nxc18 9y ago
  Where in the US have you been watching movies? I’ve never experienced this. The worst I’ve seen (and it bugs the heck out of me still) is people clapping when something big happens, but that is still quite rare. I’ve seen films in upstate NY, SF, SD, LA area, and beautiful New Hampshire.
  - eloisant 9y ago
    That was in the Bay Area (SF, Mountain View, San Mateo...)
    - adventured 9y ago
      I've noticed a huge difference between movie behavior based on city. It makes sense that it would vary by regional culture. In Los Angeles, clapping was semi-common, particularly during the early days of a big new release; it seemed to vary in direct proportion to how many people were in the theater. I consider that extremely obnoxious. I've almost never seen clapping during a movie anywhere on the east coast however.
- gambiting 9y ago
  Same here - and I've been to theatres in multiple EU countries. People definitely don't talk, absolutely don't talk on their phones(they would be kicked out if they did), and eating - meh, just the standard popcorn stuff. I've been to one theatre which also served proper food but you actually sat at a table not in a theatre seat, it felt more like a restaurant with the film playing in the background.
  - Udik 9y ago

dingo_bat 9y ago

Because the marginal cost for a theatre to show a movie is virtually zero.

blairbeckwith 9y ago
That has no effect on MoviePass. As per the article, what’s “interesting” (for certain definitions of interesting) is that MoviePass pays the theatres for the full price of the tickets for each user.
- throwaway287391 9y ago
  And the theatre companies are complaining about this, which blows my mind. It’s a phenomenally good deal for them at the moment — tons of free revenue they otherwise wouldn’t see at all, courtesy of VC capital. What a bunch of whiners.
  - schizoidboy 9y ago
    The article quotes AMC about why they're complaining: they worry that if MoviePass fails, people will sour even more on theaters and that could be their death knell (btw, love the use of harrumphed!): > The largest theater chain in the US instead described MoviePass as as an existential threat. “That price level is unsustainable and only sets up consumers for ultimate disappointment down the road if or when the product can no longer be fulfilled,” the company harrumphed. (emphasis added)
    - throwaway287391 9y ago
      I did read that and understand the potential downside for them in the long term. I still think publicly complaining about free money is a really bad look and just exposes them as the curmudgeonly dinosaurs they are.
      - schizoidboy 9y ago
        It's amazing how curmudgeony they've been. Their comment that MoviePass is an "existential threat" is fascinating as a window into the minds of people just trying to survive rather than thrive.

schizoidboy 9y ago

I thought their business model was like a gym: hope that most people won't use it. (Source: I have MoviePass and I'm seeing less than 1 movie per month because I'm too busy :-D) Instead, this article claims it's: 1. Studio of movie $M pays MoviePass $X to market it to subscribers. 2. Subscribers see a movie they otherwise wouldn't pay for. MoviePass eats this cost ($Y). 3. Subscribers' word-of-mouth network effects bring in extra revenue $E that otherwise wouldn't have come in. 4. MoviePass stays alive if $E > $X > $Y.

draw_down 9y ago
If people don’t use it then MoviePass won’t get any data for analytics.
dublidu 9y ago
MoviePass can’t use the gym model because most people actually like going to the movies, it’s not aspirational. MoviePass also has much higher cost per visit, since they have to pay full price to AMC.
deleted 9y ago
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neuralFatigue 9y ago

They also now take cuts from ticket prices and upto a 20% cut from concessions. More information here: https://techcrunch.com/2018/01/26/moviepass-pulls-out-of-amcs-top-theaters-as-negotiations-fail/ https://techcrunch.com/2018/01/26/moviepass-pulls-out-of-amc... The article makes it sound like Moviepass now has more leverage than the theatres themselves, which is super interesting.

jrs95 9y ago
Based on another article I saw, this doesn’t seem to be the case with AMC.[1] Basically, all of MoviePass’ subscribers is still a tiny portion of AMC’s sales, so they’re refusing to share any of their revenue with MoviePass. [1] https://www.theverge.com/2018/1/26/16936952/moviepass-amc-theatre-feud-movie-tickets-deceptive-earnings-statement https://www.theverge.com/2018/1/26/16936952/moviepass-amc-th...

mschuster91 9y ago

> Helios and Matheson, an analytics company which has a majority stake in MoviePass This here is the juice: Big data. The more customers they have, the better - they have validated full names, birthdates, addresses and CC numbers (and most likely also ethnicity) linked with the data when they visited what movie and even if the customers repeatedly visited a movie. MoviePass has, effectively, four distinct customers: a) the moviegoers themselves, where MoviePass makes a profit on everyone watching less than 1 movie a month b) the vast amount of adtech/big data/consumer analytics companies for which this data is a goldmine c) the movie studios which can (as shown in the article) use MoviePass to promote movies d) the cinemas which profit off the customers wanting to eat and drink They have, of course, monetized a) and begun to discover how to monetize c) - it will be interesting if they find a way to monetize the data.

utnick 9y ago
Is that data that valuable though? Its not that unique, off the top of my head there are several companies that have similar datasets, Every movie theatre chain, every online movie booking service, every movie review site
- mschuster91 9y ago
  Yes, because: - the theatre chains only have mostly generic datasets (the audience for movie X is mostly young white males) while MoviePass can do far more detailed analysis (and, in theory, could pass detailed questionnaires after you watched a movie, thus gathering more personalized data) - online movie booking services (at least in my social bubble) are only used for movies where people think they don't have a chance to get a ticket without an early reservation - movie review sites only have tiny bits of data about the readers, and the reviewer dataset is skewed - it only provides data about the people caring enough to do a review.
  - alexwilde 9y ago
    I agree with this mostly. However, the data coming from MoviePass may be flawed. I'm much more likely to see a movie I would never normally pay to see with a MoviePass subscription.

Spooky23 9y ago

A: It almost certainly doesn’t make money. Since you have to buy the ticket at the theater, they are probably trying to sell analytics re: influencing selection. Good luck with that.

xivzgrev 9y ago

I don't quite follow the angle of promoting smaller studios' movies. If I am such a studio, and pay moviepass $100k to push a movie, and then that results in $1M tickets sold thru MoviePass, and I get $500k (or whatever), didn't MoviePass just lose $900k? MoviePass is both the marketing channel AND consumer. The studio has to make a profit and that has to come from somewhere - MoviePass' profit.

toast0 9y ago
Ah, but it their customers watched other movies, they would have lost $1M, so it's better. If the intent is to get movie attendance data at any cost (as it seems), getting it at less cost is better.
- xivzgrev 9y ago
  True. How do you know they would've gone to see a movie though? That's what seems weird about this whole gravy train - the various drivers of the business clash with each other. More movies per person, more data, but more margin loss. Fewer movies per person, more margin, less data. More studio deals, more revenue, less margin. I think they're exploring various business models and finding where the sustainable value is. Will be interesting to see!
- Udik 9y ago
  This is a way to reduce the costs, but it can't be a way to make any profit (or just break even). You'll always burn a lot of money. I can't believe there isn't a way to get movie attendance data for less than, say, 5$ per data point.

tacomonstrous 9y ago

At least in my case, by continuing to charge me monthly even after I canceled the service. Their customer service is non-existent, so I had to file a dispute with my credit card company to make it stop.

jon-wood 9y ago

At least in the UK each of the big cinema chains runs there own equivalent to this, and they push their staff hard to sell passes because the actual seat costs them a negligible amount of money, and people who “aren’t paying” for the seat are more likely to buy food and drink.

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praneshp 9y ago

Heads up from a former customer that just cancelled: I was a huge fan 3 months ago, but they've been dropping theaters left and right. Around mountain view, they have gone and dropped both theaters I watch movies in. In my opinion, this will be a better program if there was a guarantee that theaters will stay for X months.

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jdlyga 9y ago

How do so many other companies like this make money? For example, HQ: the live trivia game show app that gives away a few thousand dollars multiple times per day. There's no ads, and no in app purchases. Besides burning through VC money like it's 1998, what's the business model?

sudhirj 9y ago
No ads doesn't mean your data isn't being used for ads. It's likely being sold to orthogonal adtech businesses. i.e. the company collecting the data is rarely the one using it, it usually just sells it.
- cwyers 9y ago
  And how well does that work out? My experience with ad targeting is that it's mostly awful. Amazon can track every book I purchase through them, and the ads for books to buy on my Kindle are awful. Facebook has oodles of information about me, and if I turn off AdBlock for a moment there, the ads I see are... diabetes test strips (I do not have diabetes) and something involving Brook Shields that I bet is a total sham. The only online ads I see where data on me, and not just inventory, seems to play a major role is retargeting, where I look at something on Amazon and it's shown to me again in an ad in case I changed my mind about not buying it. The whole adtech industry is in awful shape, and the idea that MoviePass can be profitable by being such a periphery part of the adtech industry is laughable. People will just tell Facebook and Twitter what movies they've seen for free, there's no reason to subsidize movie tickets to get that data. This is a case of "let's spend VC money like water to get enough customers to get a huge valuation and then figure out a business model."
  - supreme_sublime 9y ago
    I'm curious, does Amazon continue to recommend items you either just bought or are similar to something you recently bought? I get this all the time and it is annoying. It seems like the recommended stuff is related to my searches and doesn't get changed by my purchases. I think the whole online ad industry is broken. I don't know why people keep pouring money into it. Most people have learned to ignore ads, or they use an ad blocker. I don't care to see an ad for something I already bought. I doubt a system like this would actually work, but I'd explicitly tell them what kind of products I'm looking for if they asked. This passive "we can get into their mind through searches" doesn't work very well.

neovive 9y ago

I wonder how much longer the theater experience will command such a high premium. Beyond a true IMAX experience, the theater doesn't seem to add much value for average movies. One possible pivot for MoviePass would be to partner with Netflix, Amazon, HBO, or Hulu to run exclusive "members-only" premiers of their content in theaters. I could see some value in the community aspect of the theater for some of the more popular streaming shows.

subpixel 9y ago
For me, a movie theater is subpar to my apartment. I would much rather watch new releases on a streaming site than shlep to a theater, fight the desire to waste money on bad snacks, and sell my viewing history to god knows who.
- gamblor956 9y ago
  I have a big screen 4k HDR TV, a 7.1 Dolby Atmos system, and very comfortable recliners. But I would never consider a movie theater a subpar experience to my condo for any movie worth seeing on the big screen. Maybe I'm just lucky that I live in Tinseltown and we know how to operate good theaters here, but every major-chain local theater has laser projectors, massive sound systems, and reserved reclining seats. The concession stands offer beer, wine, and cooked foods. Security regularly patrols the theaters during screenings to make sure that people aren't on their phones or talking.
rhino369 9y ago
Part of it is seeing movies 3 months before DVD. Discount for delay happens in other entertainment industries--like video games.

jrochkind1 9y ago

http://www.businessinsider.com/how-does-moviepass-make-money-2017-8 http://www.businessinsider.com/how-does-moviepass-make-money... > The same day it announced the $10-a-month plan, MoviePass raised cash by selling a majority stake to the data firm Helios and Matheson Analytics Inc.. With a new price-point designed to attract as many subscribers as possible, MoviePass is hoping to attract a large enough user base so as to be able to monetize it. > “If you get a trailer right now for Spiderman on Facebook, Facebook can’t tell if you ever actually go to the movie. We can,” he told Wired. “We can tell if you look at 'Spider-Man' and look at 'Wonder Woman' and 'Mission: Impossible,' we can tell you exactly what movie you went to out of all three trailers.” > Farnsworth envisions movie studios using MoviePass' valuable data to do targeted marketing for their films. Once MoviePass has millions of subscribers, its ability fill seats can make the difference between a hit movie or a flop, he explained. MoviePass plans to hold an IPO in March, he noted.

cwyers 9y ago
> “If you get a trailer right now for Spiderman on Facebook, Facebook can’t tell if you ever actually go to the movie. We can,” he told Wired. “We can tell if you look at 'Spider-Man' and look at 'Wonder Woman' and 'Mission: Impossible,' we can tell you exactly what movie you went to out of all three trailers.” Oh bull. So many people tag themselves in Facebook posts when they go to the movies. Facebook absolutely has enough data to determine this.
- adjkant 9y ago
  Maybe for your friend group, but absolutely not mine (20-25). That market is huge for advertisers. Thar said I can't imagine their losses ever being recouped in ads.
  - cwyers 9y ago
    Maybe I am mistaken, but I find it hard to believe that if people in that demo are on Facebook enough to see movie trailers there that they wouldn't then post about the movie they just saw.

ricardobeat 9y ago

Is what they are doing even legal? Co-opting movie goers into their debit cards and then using that power to extort the movie theaters for money? Imagine how much money your bank could make if they started doing this...

ricardobeat 9y ago
/s

haily 9y ago

I think most people are missing the point here. MoviePass has many ways to monetize from begin to end. It currently has more then 1.5 million subscribers & growing very fast (fastest subscription service growth ever, even faster then netflix). Most people miss the opportunities MoviePass has. It will control the demand & distribution of movies through its subscribers. Movie theater goers have been declining year over year and MoviePass will help reverse this. It currently makes money by a) subscriptions $9.95/month b) $2-3 rebate per ticket contracts with about 1000 theaters (5 new contracts a week are signed) c) 20-30% of concession revenue with about 1000 theaters (5 new contracts a week are signed) d) Bought "America Animal" movie rights for North American release at Sundance Festival