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> You can't charge less than the marginal cost, it doesn't make sense! It worked for Uber tho. And now they've raised prices in markets where they are establis
by acchow 8y ago
> You can't charge less than the marginal cost, it doesn't make sense!
It worked for Uber tho. And now they've raised prices in markets where they are established.
- slivym 8y agoUber has a network effect, so it's naturally monopolistic. Cinema passes have a network effect too (you only want the pass if the cinemas near you have it), but firstly it's much much weaker because you literally only need your local cinema, and secondly that's a network effect that helps the actual cinema, not a random middle man like moviepass.
- organsnyder 8y agoUber has a network effect, but it's not exclusive—hence the larger number of drivers driving for both Uber and Lyft. I don't see Uber's position as being very entrenched at this point.
- citrablue 8y agoUber also plans to cut costs significantly in the future w/ autonomous cars. May be a pipe dream, but if they believe in the successful widespread deployment of the technology, that means they just have to stay afloat until then. MoviePass could start to make their own movies, but that would require a substantial investment and isn't really comparable
- jacobush 8y agoWow that would be something... what would happen if Universal Pictures stepped in with a subscription model (or whatever Moviepass does) for their movies?
- reaperducer 8y agoWhy build when you can buy? Universal just has to buy MoviePass. Assuming it has the cash. From what I've read over the last few years, the big Hollywood studios are not cash-rich.
- mulletbum 8y agoI forgot where I read it, but I though Moviepass's ability to geolocate and push money onto a credit card was considered a good idea and could sold.
- stuckinarut 8y agoHardly seems like a large barrier. I would think the biggest issue would be finding the card company to partner up with, and then it doesn't sound like a very high barrier. For theatres it's even easier to offer an unlimited option since they can just have the accounts internally. Studios can partner with theatres, though that seems overly complicated (I went to Mission Impossible last night, so I need a paramount account?)
- SilasX 8y agoUber will not invent SDCs much sooner than the other companies, at which point they will have to cut their own prices too to compete with the other SDC companies. So there would be a very small window for monopoly profits.
- astrodust 8y agoIf by "worked" you mean "burned through ten billion in cash" then sure, it worked.
- pandasun 8y agoTrue, I think that maybe Uber found the fine line (could be pure luck) between creating enough buzz right before running out of cash (several times) and simply going bankrupt.
- astrodust 8y agoThat Q1 profit was interesting, but it's nowhere near a trend. They may need another ten or twenty billion, or maybe infinite billions because their business model is critically flawed.
- stuckinarut 8y agoExcept Uber was building a market. If I start a company that just subsidizes Uber rides I'm never going to make money. Unless Moviepass provides some actual value to theatres, they won't make money. Theatres aren't going to give them discount rates to Star Wars or Avengers 4 because those movies sell out anyway.
- pbreit 8y agoUber has a 30% take rate and zero marginal cost. Wrong example.
- dingo_bat 8y agoUber offers a real, irreplaceable service though. I can walk out of my apartment and be on the way to my office in an Uber pool in 5 minutes. The cost is basically 2x of the bus ticket I'd need to buy. As far as I know this service was being offered by absolutely nobody before Uber.