4 ms·

But MoviePass "could also choose to raise prices ever so slightly". It seems very likely it would not work. What's the categorical difference between the two b

But MoviePass "could also choose to raise prices ever so slightly". It seems very likely it would not work. What's the categorical difference between the two business models? Guess it's the fact that when MoviePass tries to change prices it will force every user to opt in all over again. Opting in is part of the everyday user interaction for Amazon.

Mindwipe 8y ago
MoviePass doesn't have to raise prices ever so slightly to be a viable business. It has to raise prices by significant integer multiples. (And heck, Amazon don't even need to raise prices, they could be very profitable just by investing in growth less. But their investors are clearly happy with the current state of affairs).
- walshemj 8y ago
  Not really could just have tiered prices 6.99 for weekdays before 5:30, 9.99 after - and say 12.99 at the weekends/holidays. For example my local VUE in the UK I can get a ticket on Mondays for less than $6 full price is $16 I suspect that its the paying up front for a year when a substantial majority of its customers wont goto the cinema
  - TylerE 8y ago
    I think you are misreading the business model. The MoviePass price is per month. There is NO cost per viewing. You could in theory see up to 31 movies for your single $10 payment.
    - walshemj 8y ago
      But normal people wont they will see 1 or 2
      - TylerE 8y ago
        I live in an area with a cheap cost of living and even if I only went to one movie a month a MP is still about a buck cheaper.
    - jessaustin 8y ago
      I can't think of a month in which I wanted to see three movies in current release...
      - basementcat 8y ago
        If you live in a city with many independent theaters showing limited releases and foreign films, 31 movies per month isn't enough to scratch the surface. PS. Staff at indie theaters tell me that 70-80% of tickets are purchased with Moviepass cards.
    - pwinnski 8y ago
      jessaustin, I don't often see more than a movie or two per month, but back when I had a MoviePass (before they cut the price so low!), I found myself seeing movies I wouldn't otherwise have bothered to see. When the marginal cost is zero, it becomes a lot easier to drop by a theater and see what's playing, and even walk out if the movie's no good, feeling no sense of loss. I was paying $40/month for MoviePass, and most months they still lost money and me, and I saw a lot of movies in a theater that I would normally have waited to see at home.
    - walshemj 8y ago
      You have to pay for a year up front + another fee
  - Mindwipe 8y ago
    Moviepass is an all you can eat subscription. The UK has those - Cineworld and Odeon both do them. But the point is that they're significantly more expensive than Moviepass is, and the price of quite a few individual tickets (they're usually £35/40pm, which is $50-60 US). And they're run by the chains themselves so they have less infrastructure cost to check for fraud. That's what I meant by integer multiples. If Moviepass was $60 a month it might be sustainable. But it's not, it's $10.
    - munk-a 8y ago
      If the all-you-can-eat subscription is run by the chains they might also be hoping to make back what they lose on ticket sales in concession sales. Moviepass doesn't get any of that sweet concession stand money and they'd have a hard time convincing theaters that they should unless they start leveraging their user base (i.e. threatening to drop MoviePass from working at Cineplex) to pressure theaters. Even then they add so little value to the system that it'd be hard for them to do that while sustaining a competitive advantage against new market entrants. MoviePass is just a terrible idea to be in as an independent business.
    - vilmosi 8y ago
      Cineworld is £18/month, not 35/40.
- TylerE 8y ago
  Raising prices may even make things worse, as it will just narrow their customer base to those that are most expensive to service.
  - r00fus 8y ago
    How are higher-paying customers more expensive to service?
    - michaelchisari 8y ago
      More likely to use their service regularly. At $10 you have a certain percentage which will go once a month. At $50 you only attract the people who go twice a week.
lrem 8y ago
Amazon was making profit on every incremental sale, but invested more money than the sum of that profit.
- dmode 8y ago
  This is the key. Amazon was profitable in the unit economics, Moviepass is not.

Mindwipe 8y ago

MoviePass doesn't have to raise prices ever so slightly to be a viable business. It has to raise prices by significant integer multiples. (And heck, Amazon don't even need to raise prices, they could be very profitable just by investing in growth less. But their investors are clearly happy with the current state of affairs).

walshemj 8y ago
Not really could just have tiered prices 6.99 for weekdays before 5:30, 9.99 after - and say 12.99 at the weekends/holidays. For example my local VUE in the UK I can get a ticket on Mondays for less than $6 full price is $16 I suspect that its the paying up front for a year when a substantial majority of its customers wont goto the cinema
- TylerE 8y ago
  I think you are misreading the business model. The MoviePass price is per month. There is NO cost per viewing. You could in theory see up to 31 movies for your single $10 payment.
  - walshemj 8y ago
    But normal people wont they will see 1 or 2
    - TylerE 8y ago
      I live in an area with a cheap cost of living and even if I only went to one movie a month a MP is still about a buck cheaper.
  - jessaustin 8y ago
    I can't think of a month in which I wanted to see three movies in current release...
    - basementcat 8y ago
      If you live in a city with many independent theaters showing limited releases and foreign films, 31 movies per month isn't enough to scratch the surface. PS. Staff at indie theaters tell me that 70-80% of tickets are purchased with Moviepass cards.
  - pwinnski 8y ago
    jessaustin, I don't often see more than a movie or two per month, but back when I had a MoviePass (before they cut the price so low!), I found myself seeing movies I wouldn't otherwise have bothered to see. When the marginal cost is zero, it becomes a lot easier to drop by a theater and see what's playing, and even walk out if the movie's no good, feeling no sense of loss. I was paying $40/month for MoviePass, and most months they still lost money and me, and I saw a lot of movies in a theater that I would normally have waited to see at home.
  - walshemj 8y ago
    You have to pay for a year up front + another fee
- Mindwipe 8y ago
  Moviepass is an all you can eat subscription. The UK has those - Cineworld and Odeon both do them. But the point is that they're significantly more expensive than Moviepass is, and the price of quite a few individual tickets (they're usually £35/40pm, which is $50-60 US). And they're run by the chains themselves so they have less infrastructure cost to check for fraud. That's what I meant by integer multiples. If Moviepass was $60 a month it might be sustainable. But it's not, it's $10.
  - munk-a 8y ago
    If the all-you-can-eat subscription is run by the chains they might also be hoping to make back what they lose on ticket sales in concession sales. Moviepass doesn't get any of that sweet concession stand money and they'd have a hard time convincing theaters that they should unless they start leveraging their user base (i.e. threatening to drop MoviePass from working at Cineplex) to pressure theaters. Even then they add so little value to the system that it'd be hard for them to do that while sustaining a competitive advantage against new market entrants. MoviePass is just a terrible idea to be in as an independent business.
  - vilmosi 8y ago
    Cineworld is £18/month, not 35/40.
TylerE 8y ago
Raising prices may even make things worse, as it will just narrow their customer base to those that are most expensive to service.
- r00fus 8y ago
  How are higher-paying customers more expensive to service?
  - michaelchisari 8y ago
    More likely to use their service regularly. At $10 you have a certain percentage which will go once a month. At $50 you only attract the people who go twice a week.

lrem 8y ago

Amazon was making profit on every incremental sale, but invested more money than the sum of that profit.

dmode 8y ago
This is the key. Amazon was profitable in the unit economics, Moviepass is not.