It's why places like Planet Fitness are able to offer $10/month unlimited memberships.
MoviePass will pay about $12 each and every time someone sees a movie -- more than the monthly fee any one member is paying.
So every super movie fan watching 10 movies a month requires more than 11 other members paying the monthly fee and then not using their membership at all. Hard to see that math working out.
Huh? What exactly do you think a gym's principal expenses are beyond rent, employee cost and equipment maintenance/replacement? And how long do you think a gym treadmill which is run on for ~6 hours a day will last?
I'm not saying MoviePass automatically makes sense, but the idea that gyms are "all upside" after the initial equipment purchase is badly misinformed.
> but the idea that gyms are "all upside" after the initial equipment purchase is badly misinformed.
I'm not sure how you read what GP said, but if you reread it you'll understand that the mistake was on you, not them being misinformed.
Emphasis added to both their post and yours to highlight.
That model is far different though
For each Planet Fitness, much of the cost is upfront. That is, they have to buy the property, renovate (or build), and then buy all the machines. Yes there are increased maintenance costs as more people join the gym, but cost per user should decrease with each additional membership.
For MoviePass, for each user they have to pay for the price of each movie ticket they go to. Thus their costs increase proportionally to the number of subscribers. Unless each additional user they sign up goes to the movies less than the average MoviePass user, Cost per user doesn't decrease.
As said before, this is not remotely accurate. Firstly, nearly all of these franchises rent their building space. Secondly, as with any B&M business, fully loaded employee costs comprise a majority of operating expenses. Thirdly, gym equipment maintenance is a non-trivial ongoing factor. Certainly the initial equipment purchase is a bubble, but the idea that PF is only fiscally viable due to equipment longevity is specious at best.
You can see an estimate breakdown of PF expenses here: http://www.franchisedirect.com/fitnessfranchises/planet-fitn...
Note fitness equipment estimates range from $35,930 to $944,800; re-equip costs are estimated at $359,900 to $944,800. (that low estimate on re-equip may be a typo, it is likely re-equip costs are estimated in the same range)
With a $40 annual membership fee, as well, though.
But yeah, they're making money off of me. I went nearly every day until I started full-time work. Now, it's just far more convenient to use my neighborhood gym during the morning, though the equipment is lacking. But I retain the membership on the chance that I might use Planet Fitness's facility instead, because it's only $10!