3 ms·

MoviePass is an awesome out of the box idea that everyone was too scared to try. But unfortunately MoviePass doesn't have a sustainable cost structure because

MoviePass is an awesome out of the box idea that everyone was too scared to try. But unfortunately MoviePass doesn't have a sustainable cost structure because it hasn't partenered effectively with movie studios or theatres. So MoviePass will clear die a quick death very soon but hopefully someone with better business acumen will get the cost structure right and then this will take off. I think the trick will be that successful MoviePass-like offering would give you non-desirable seats or give let you watch on non-prime days unless you paid extra to make up for the difference. Then it would be helping to monetize spare capacity rather than taking away money crowding filling premium seats with lower revenue customers.

shanghaiaway 8y ago
It's not an out of the box idea. It's not awesome. It's subscriptions applied to movie theaters.
valuearb 8y ago
It's hard to call an idea "awesome" if it involves giving away money to strangers without any chance to recoup it. I considered getting a MovePass membership, but it was so clear that there was no economic way they could ever sustain their business, and I'd probably get stuck holding the bag after they charged my card. To work Moviepass would need massive discounts from the chains, and ion reality they got exactly zero discounts. The main people attracted to it's business model were hard core movie watchers would were guaranteed to use the service a lot. If their average member saw more than one movie a month they lost money on that member. If they saw three movies a month, MoviePass is losing like $20 a month per member. And that's just on cost of services. It doesn't count marking costs, sales costs, operations, etc. Even if their members only watched a single movie a month, MoviePass would still lose gobs of money. And the idea they could switch to offering non-prime seating or times is also dubious. Let's assume they can get consumers to pay $10 a month for the "non-prime" offering, those consumers only watch two movies a month, and that movie theaters agree to discount those "non-prime" tickets by 50%, or an average of $4.50 each. Now MoviePass would have $1 per customer per month in positive net margin (10%), but there is no way they can pay for all sales, marketing, and operations costs out of that, and build a profitable business to boot. Think of it this way, going non-prime means their product just got way worse, so how are they going to get customers? Right now their product is a great deal and sells itself, but the cost of acquiring new users for the non-prime product is going to be a lot more than $1 each. It will probably cost 1-2 years to earn back the cost of acquisition for each customer. Will the average subscription even last over a year? Warren Buffett has a great saying about businesses. Go find a business that's so easy an idiot can run it, because sooner or later an idiot will. In the case of MoviePass it was, go build a business so hard the best CEO in the world couldn't run it, and only idiots will run and fund it.

shanghaiaway 8y ago

It's not an out of the box idea. It's not awesome. It's subscriptions applied to movie theaters.

valuearb 8y ago

It's hard to call an idea "awesome" if it involves giving away money to strangers without any chance to recoup it. I considered getting a MovePass membership, but it was so clear that there was no economic way they could ever sustain their business, and I'd probably get stuck holding the bag after they charged my card. To work Moviepass would need massive discounts from the chains, and ion reality they got exactly zero discounts. The main people attracted to it's business model were hard core movie watchers would were guaranteed to use the service a lot. If their average member saw more than one movie a month they lost money on that member. If they saw three movies a month, MoviePass is losing like $20 a month per member. And that's just on cost of services. It doesn't count marking costs, sales costs, operations, etc. Even if their members only watched a single movie a month, MoviePass would still lose gobs of money. And the idea they could switch to offering non-prime seating or times is also dubious. Let's assume they can get consumers to pay $10 a month for the "non-prime" offering, those consumers only watch two movies a month, and that movie theaters agree to discount those "non-prime" tickets by 50%, or an average of $4.50 each. Now MoviePass would have $1 per customer per month in positive net margin (10%), but there is no way they can pay for all sales, marketing, and operations costs out of that, and build a profitable business to boot. Think of it this way, going non-prime means their product just got way worse, so how are they going to get customers? Right now their product is a great deal and sells itself, but the cost of acquiring new users for the non-prime product is going to be a lot more than $1 each. It will probably cost 1-2 years to earn back the cost of acquisition for each customer. Will the average subscription even last over a year? Warren Buffett has a great saying about businesses. Go find a business that's so easy an idiot can run it, because sooner or later an idiot will. In the case of MoviePass it was, go build a business so hard the best CEO in the world couldn't run it, and only idiots will run and fund it.