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> 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,
by 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 agoInsurance 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 agoKind 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 agoInsurance 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).
- jlarocco 5y agoIt's not the same at all. Insurance protects people financially from unlikely and *undesirable* events they don't want to happen. Nobody in good faith wants to get in a car accident or have a medical emergency. Insurance "works" by assuming most people won't have to or want to use it. MoviePass is doing exactly the opposite, though. They're selling a desirable product for much cheaper than normal while paying full price themselves and hoping people won't actually take advantage.
- cr1895 5y agoI didn't suggest that MoviePass functioned like insurance, only that it's not really an unusual concept. It's just clearly not workable as you point out.