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Comment by kemiller2002 | Hacker News Reader

kemiller2002

This is pretty ingenious. Movie theaters don't make money off of the movie, they make it off of the concessions. This lowers the barrier to entry in getting people in the theater. A number of people I know always get popcorn and a drink when they go. They do it every time no matter what time of day. It's just what they do. By lowering the price of admission, they are going to get people to spend more money on concessions by getting them to go to the theater more.

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You misunderstand this model - MoviePass does not own nor share a revenue stake with the theaters directly. MoviePass pays the theatres the full price of each ticket, and the theatres don’t provide kickbacks. MoviePass wants to make money off the data they collect.

Maybe it's me, but I don't see this data as all that valuable. Say I go to the movies 8-10x a month. Given that my local theater probably gets about 20 new movies per month, does knowing which half of the movies I see really provide analytical value over aggregate box office numbers?

I wonder if the app is spying on you in more nefarious ways. I guess I could dedicate a retired phone to be my "movies" phone.

The missing piece with box office numbers is connecting individual ticket sales with other individual ticket sales, as well as a host of other factors (since they have your personal information, and credit card or whatever on file, they can correlate your activity with all kinds of other things).

Another smart HN commenter wrote "If it's free, then you are the product."

That seems to be the case with significant discounts.

Right, the studio agreements require theaters to hand over ~100% of ticket prices on opening weekend.

But my understanding is that they can't just stop charging for tickets (or cut prices significantly) "since they're not seeing it anyway"; there are uniform ticket prices in those same agreements that prevent such tactics [1].

If they didn't have minimum prices, theaters could game it with a system like:

Movie ticket: $1

No-poke service: $11

"If you buy our no-poke service, a theater employee won't randomly poke you with a stick throughout the movie, as happens with our discounted tickets. ... Hey, Hollywood studios, we only saw $1 in revenue per ticket, but you're welcome to keep it!"

So, any system like the one in the story would have to renegotiate such agreements or work within some loophole.

Edit: Nevermind, this is why you read the article before commenting: apparently they pay the full price to the theater for you, which is a huge loss that they plan to make up by selling the analytics:

>MoviePass will pay theaters the full price of each ticket used by subscribers, excluding 3D or Imax screens.

>MoviePass could lose a lot of money subsidizing people’s movie habits. So the company also raised cash on Tuesday by selling a majority stake to Helios and Matheson Analytics Inc., ...

>Ted Farnsworth, chief executive officer at Helios and Matheson, said the goal is to amass a large base of customers and collect data on viewing behaviors.

[1] From a quick googling:

http://www.cinemablend.com/new/Arguing-One-Price-Ticket-Syst...

https://www.theatlantic.com/business/archive/2012/01/why-do-...

> But my understanding is that they can't just stop charging for tickets (or cut prices significantly) "since they're not seeing it anyway"; there are uniform ticket prices in those same agreements that prevent such tactics.

Isn't this practically a cartel?

If this move were so ingenious, why wouldn't the movie theaters just lower their prices to get more people in the door? Instead, the trend over the last few years has been to increase prices (according to the article).

Theaters have to pay a nut to the studio doing the distribution. They negotiate how much of a nut based on the perceived popularity of the title. The studios don't give a hoot about per ticket price, they just want XX dollars for a specific time period. The theater can charge $1 or $20 per ticket, they're still paying the studio the nut at then end of the day.

There's no risk to the movie theaters here, I just don't really understand how this business model works for MoviePass. Article says they're paying full price for the tickets and eating the costs.

For the time being, yeah. But they say the eventual goal is to sell customer data to advertisers.

Okay, but how much do they think that information is worth?

General admission to a regular movie here is $12. If their average user sees even 1.5 movies a month (might be higher - I imagine this kind of subscription would appeal to the type of people that enjoy going to the theater), they're losing $8/mo/user right off the bat.

If they get 100,000 users, figure in some operating/other costs, etc, they're looking at trying to sell 100,000 people's theater watching habits for like $1m/mo. That seems a little wacky to me.

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