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Unpopular opinion, but MoviePass could have survived a lot longer if they had more funding. I think there could have been a real opportunity with establishing t

Unpopular opinion, but MoviePass could have survived a lot longer if they had more funding. I think there could have been a real opportunity with establishing themselves the main funnel to getting consumers to physical theaters. They couldn't hold on long enough to see what could be possible with such a moat.

s_dev 5y ago
They could never survive -- their customer demand came from selling $10 movie tickets for $9 -- funded entirely by investor burn. A sustainable business is one where you sell cinema tickets for $11 having bought them for $10 with the customer choosing you because you've added more than $1 in value for them. It's a car racing down a hill. The acceleration looks exponential but it's just going to crash.
- Sohcahtoa82 5y ago
  I always assumed that MoviePass's endgame was to funnel so many of the ticket sales through them that they could strong-arm the theaters into lowering their ticket prices. They thought if they captured the movie ticket sales market, they could tell the theater "Start allowing us to pay only $2/ticket or we'll remove you from our app and you won't make ANY sales!" I could be totally talking out my ass, but that's what I always figured. I don't see how else they could be profitable.
- asciident 5y ago
  It was more like them selling $300 of movie tickets (I'd watch one a day) for $10. Everyone only used them for the arbitrage.
jermaustin1 5y ago
MoviePass could have survived longer if they had more money, and a different business model. The problem is they were letting you go to movies at AMC and Cinemark for less than they bought the tickets, and both AMC and Cinemark said they wouldn't negotiate lower prices for them. They could have had a small but cult business contracting with smaller theater chains, but they didn't. They could have also bought tickets in bulk, and sold them through the app, but they didn't. They could have reserved tickets at premiers and sold them at a markup, but they didn't. They could have done a LOT of things to make money, but they didn't. I say this as a onetime holder of more than 1% of publicly available shares. And I think at the time, one of the largest non-institutional shareholders. Lost a lot of money on wanting a dumb "title".
- thirtyseven 5y ago
  Thanks for the free tickets! Just curious, what was your motivation for investing so heavily if you knew the business model was dumb?
  - TameAntelope 5y ago
    Not the guy you asked, but he just listed a half-dozen or so things he probably expected them to expand into that were promising/could have worked out, so I'm guessing he invested hoping they'd do those things, and was pissed when they didn't.
  - jermaustin1 5y ago
    For the bragging rights. It was already about to be delisted and I think it was sub $1/share. So I looked up how much I'd need to own to match the largest individual investor, and decided. I could have invested the paltry amount (I actually cannot remember how much, but it was < $10k in my IRA) in something worth while, or... burn it all to own more more than any other individual investor at the time that I did it. I only held for a couple of days, before selling it at a ~70% loss - or vanguard liquidating when it delisted - I cannot remember now. But it was a fun ride and brag I got to have. People at the office cheered for me. People in my house berated me.
    - nathancahill 5y ago
      Haha is "the office" WallSteetBets?
      - jermaustin1 5y ago
        I had never even used reddit before just a few months ago, so no, it was an actual office lol.
- indymike 5y ago
  >The problem is they were letting you go to movies at AMC and Cinemark for less than they bought the tickets, and both AMC and Cinemark said they wouldn't negotiate lower prices for them. Considering the Cinemark near me is a $1.50 per ticket second run place...
jlarocco 5y ago
Sure, but any business can survive indefinitely if they're given unlimited funding with no expectation of returns. In your opinion, what's the point of being the main funnel to theaters if you're losing money hand over fist to do so? What was the plan for profitability? Was the goal to somehow strong arm movie theaters into discounted pricing? Why would theaters agree to that when there's no benefit for them to do so, they're the ones with the actual product and it's irrelevant to them if MoviePass survives? The only way their business model can work is if the majority of customers sign up and never use it, which is a very weird thing for a business to depend on, IMO.
- cr1895 5y ago
  > The only way their business model can work is if the majority of customers sign up and never use it, which is a very weird thing for a business to depend on, IMO. This is essentially the concept of insurance, is it not?
  - ascagnel_ 5y ago
    Insurance works best when it's something that appeals widely (eg: all drivers must carry insurance) but is used rarely (very few drivers will have an accident at any given time). MoviePass was offering a service with narrow appeal (avid moviegoers) that used the service frequently.
  - warkdarrior 5y ago
    Kind of, but the insurance business depends on the costly events being rare and mostly independent of the customers' choices (e.g., getting sick is the event for health insurance, getting into a car accident for auto insurance). MoviePass is the opposite. It sells/sold a product that is frequent enough and dependent on customers' choices. The MoviePass product is pitched as way to go to the movies whenever and as often as you want, thus maximizing the frequency of costly events (i.e., paying for theater tickets).
  - xmprt 5y ago
    Insurance has the additional model of finding ways to avoid paying out claims even when people do try to use it. I think MoviePass would have a hard time stopping users from using their tickets once they already purchased them through the app (although they did try by blacking out certain movies).
rrrrrrrrrrrryan 5y ago
I think their main mistake was antagonizing the big theater chains. They should've had their hand outstretched to the chains, consistently, from the very beginning. The (probably smaller) chains that play ball and negotiate selling cheaper tickets to moviepass get rewarded with more foot traffic, the chains that don't play ball get punished in small ways. By gently and gradually steering traffic away from AMC, they would've put themselves in a much better position for negotiation.
- listenallyall 5y ago
  How is buying millions of tickets "antagonizing"? And what intelligent company turns down a 5-million ticket order - at full price! - from a single customer in favor of selling 3 million tickets one-by-one?
  - rrrrrrrrrrrryan 5y ago
    I was referring to the statements they made intentionally taunting AMC. That's not how you get people to come to the negotiating table. AMC absolutely did the right thing: they kept their mouth shut, collected the money, waited for MoviePass to fizzle out, then launched their own (presumably profitable) subscription service.
    - listenallyall 5y ago
      ...and watched its stock decline from mid-20s when MP launched to under $5 if I remember correctly. Later it became a WSB meme stock, but that is a different story.
Telemakhos 5y ago
MoviePass was started by a group of conmen who ran scams in India. https://www.businessinsider.com/moviepass-owner-emerged-from-indian-company-accused-of-massive-fraud-2018-7 https://www.businessinsider.com/moviepass-owner-emerged-from... The company was a classic pump-and-dump; it was never supposed to last this long. Somewhere along the line some other, US-based conmen ("serial entrepreneurs") got involved, probably holding the bag for the founders who got their stock profits and bailed.

s_dev 5y ago

They could never survive -- their customer demand came from selling $10 movie tickets for $9 -- funded entirely by investor burn. A sustainable business is one where you sell cinema tickets for $11 having bought them for $10 with the customer choosing you because you've added more than $1 in value for them. It's a car racing down a hill. The acceleration looks exponential but it's just going to crash.

Sohcahtoa82 5y ago
I always assumed that MoviePass's endgame was to funnel so many of the ticket sales through them that they could strong-arm the theaters into lowering their ticket prices. They thought if they captured the movie ticket sales market, they could tell the theater "Start allowing us to pay only $2/ticket or we'll remove you from our app and you won't make ANY sales!" I could be totally talking out my ass, but that's what I always figured. I don't see how else they could be profitable.
asciident 5y ago
It was more like them selling $300 of movie tickets (I'd watch one a day) for $10. Everyone only used them for the arbitrage.

jermaustin1 5y ago

MoviePass could have survived longer if they had more money, and a different business model. The problem is they were letting you go to movies at AMC and Cinemark for less than they bought the tickets, and both AMC and Cinemark said they wouldn't negotiate lower prices for them. They could have had a small but cult business contracting with smaller theater chains, but they didn't. They could have also bought tickets in bulk, and sold them through the app, but they didn't. They could have reserved tickets at premiers and sold them at a markup, but they didn't. They could have done a LOT of things to make money, but they didn't. I say this as a onetime holder of more than 1% of publicly available shares. And I think at the time, one of the largest non-institutional shareholders. Lost a lot of money on wanting a dumb "title".

thirtyseven 5y ago
Thanks for the free tickets! Just curious, what was your motivation for investing so heavily if you knew the business model was dumb?
- TameAntelope 5y ago
  Not the guy you asked, but he just listed a half-dozen or so things he probably expected them to expand into that were promising/could have worked out, so I'm guessing he invested hoping they'd do those things, and was pissed when they didn't.
- jermaustin1 5y ago
  For the bragging rights. It was already about to be delisted and I think it was sub $1/share. So I looked up how much I'd need to own to match the largest individual investor, and decided. I could have invested the paltry amount (I actually cannot remember how much, but it was < $10k in my IRA) in something worth while, or... burn it all to own more more than any other individual investor at the time that I did it. I only held for a couple of days, before selling it at a ~70% loss - or vanguard liquidating when it delisted - I cannot remember now. But it was a fun ride and brag I got to have. People at the office cheered for me. People in my house berated me.
  - nathancahill 5y ago
    Haha is "the office" WallSteetBets?
    - jermaustin1 5y ago
      I had never even used reddit before just a few months ago, so no, it was an actual office lol.
indymike 5y ago
>The problem is they were letting you go to movies at AMC and Cinemark for less than they bought the tickets, and both AMC and Cinemark said they wouldn't negotiate lower prices for them. Considering the Cinemark near me is a $1.50 per ticket second run place...

jlarocco 5y ago

Sure, but any business can survive indefinitely if they're given unlimited funding with no expectation of returns. In your opinion, what's the point of being the main funnel to theaters if you're losing money hand over fist to do so? What was the plan for profitability? Was the goal to somehow strong arm movie theaters into discounted pricing? Why would theaters agree to that when there's no benefit for them to do so, they're the ones with the actual product and it's irrelevant to them if MoviePass survives? The only way their business model can work is if the majority of customers sign up and never use it, which is a very weird thing for a business to depend on, IMO.

cr1895 5y ago
> The only way their business model can work is if the majority of customers sign up and never use it, which is a very weird thing for a business to depend on, IMO. This is essentially the concept of insurance, is it not?
- ascagnel_ 5y ago
  Insurance works best when it's something that appeals widely (eg: all drivers must carry insurance) but is used rarely (very few drivers will have an accident at any given time). MoviePass was offering a service with narrow appeal (avid moviegoers) that used the service frequently.
- warkdarrior 5y ago
  Kind of, but the insurance business depends on the costly events being rare and mostly independent of the customers' choices (e.g., getting sick is the event for health insurance, getting into a car accident for auto insurance). MoviePass is the opposite. It sells/sold a product that is frequent enough and dependent on customers' choices. The MoviePass product is pitched as way to go to the movies whenever and as often as you want, thus maximizing the frequency of costly events (i.e., paying for theater tickets).
- xmprt 5y ago
  Insurance has the additional model of finding ways to avoid paying out claims even when people do try to use it. I think MoviePass would have a hard time stopping users from using their tickets once they already purchased them through the app (although they did try by blacking out certain movies).

rrrrrrrrrrrryan 5y ago

I think their main mistake was antagonizing the big theater chains. They should've had their hand outstretched to the chains, consistently, from the very beginning. The (probably smaller) chains that play ball and negotiate selling cheaper tickets to moviepass get rewarded with more foot traffic, the chains that don't play ball get punished in small ways. By gently and gradually steering traffic away from AMC, they would've put themselves in a much better position for negotiation.

listenallyall 5y ago
How is buying millions of tickets "antagonizing"? And what intelligent company turns down a 5-million ticket order - at full price! - from a single customer in favor of selling 3 million tickets one-by-one?
- rrrrrrrrrrrryan 5y ago
  I was referring to the statements they made intentionally taunting AMC. That's not how you get people to come to the negotiating table. AMC absolutely did the right thing: they kept their mouth shut, collected the money, waited for MoviePass to fizzle out, then launched their own (presumably profitable) subscription service.
  - listenallyall 5y ago
    ...and watched its stock decline from mid-20s when MP launched to under $5 if I remember correctly. Later it became a WSB meme stock, but that is a different story.

Telemakhos 5y ago

MoviePass was started by a group of conmen who ran scams in India. https://www.businessinsider.com/moviepass-owner-emerged-from-indian-company-accused-of-massive-fraud-2018-7 https://www.businessinsider.com/moviepass-owner-emerged-from... The company was a classic pump-and-dump; it was never supposed to last this long. Somewhere along the line some other, US-based conmen ("serial entrepreneurs") got involved, probably holding the bag for the founders who got their stock profits and bailed.