4 ms·

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.
  - jorams 9y ago
    > It’s a phenomenally good deal for them at the moment The problem here is in the at the moment. MoviePass trains consumers to see the experience of going to the movies as effectively worth nothing. That is very bad for theaters, because when MoviePass goes away they will be left with a product---with small margins---that consumers see as incredibly expensive.
    - RodgerTheGreat 9y ago
      And the insidious part of this is that MoviePass doesn't have to fail. If they achieve sufficient market dominance they can ruin any theater that refuses to play ball by removing their ticket "subsidies". "Heads I win, tails you lose."
  - deleted 9y ago
    [deleted]
bunderbunder 9y ago
The marginal cost to a theater, sure. But, as the 3rd paragraph points out, MoviePass is paying those theaters full price for each ticket. They're losing money hand over fist. They can't just solve this by squeezing theaters, either. They're already struggling, if not barely surviving. If MoviePass simply tries to strong-arm them into accepting less than full price, without offering some other source of revenue in return, that's a lose-lose strategy for them. If they fail, they lose their ability to supply customers in that market with the service that they signed up for. If they succeed, they risk bankrupting the people who actually supply their customers in that market with the service that they signed up for, and so they still lose it.
- txsh 9y ago
  If you believe what MoviePass is saying, they’re not losing money hand over fist. They claim most people stop going to the movies after the first couple of months. If someone doesn’t see 12 movies in a year, they aren’t losing money. They say the average is closer to 4.
  - j1vms 9y ago
    > They claim most people stop going to the movies after the first couple of months. Which of course hurts the ads/analytics side of their business. Not going to any movies means little or no data generation.
    - criddell 9y ago
      When the subscription price was higher, they have fewer members and the people that signed up went to a lot of movies and MoviePass was losing a lot of money. When the dropped the price, a lot more people signed up and most of these were casual movie goers. In every way they are better off with two million subscribers that go to 8 movies a year than a hundred and fifty thousand subscribers that go to 25 movies a year.
      - dawnerd 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.
- jorams 9y ago
  > It’s a phenomenally good deal for them at the moment The problem here is in the at the moment. MoviePass trains consumers to see the experience of going to the movies as effectively worth nothing. That is very bad for theaters, because when MoviePass goes away they will be left with a product---with small margins---that consumers see as incredibly expensive.
  - RodgerTheGreat 9y ago
    And the insidious part of this is that MoviePass doesn't have to fail. If they achieve sufficient market dominance they can ruin any theater that refuses to play ball by removing their ticket "subsidies". "Heads I win, tails you lose."
- deleted 9y ago
  [deleted]

bunderbunder 9y ago

The marginal cost to a theater, sure. But, as the 3rd paragraph points out, MoviePass is paying those theaters full price for each ticket. They're losing money hand over fist. They can't just solve this by squeezing theaters, either. They're already struggling, if not barely surviving. If MoviePass simply tries to strong-arm them into accepting less than full price, without offering some other source of revenue in return, that's a lose-lose strategy for them. If they fail, they lose their ability to supply customers in that market with the service that they signed up for. If they succeed, they risk bankrupting the people who actually supply their customers in that market with the service that they signed up for, and so they still lose it.

txsh 9y ago
If you believe what MoviePass is saying, they’re not losing money hand over fist. They claim most people stop going to the movies after the first couple of months. If someone doesn’t see 12 movies in a year, they aren’t losing money. They say the average is closer to 4.
- j1vms 9y ago
  > They claim most people stop going to the movies after the first couple of months. Which of course hurts the ads/analytics side of their business. Not going to any movies means little or no data generation.
  - criddell 9y ago
    When the subscription price was higher, they have fewer members and the people that signed up went to a lot of movies and MoviePass was losing a lot of money. When the dropped the price, a lot more people signed up and most of these were casual movie goers. In every way they are better off with two million subscribers that go to 8 movies a year than a hundred and fifty thousand subscribers that go to 25 movies a year.
    - dawnerd 9y ago