Comment by gooseus | Hacker News Reader

Comment by gooseus | Hacker News Reader

I don't understand why theaters would have a problem with this... I was under the impression that theaters made most of their money from concessions since they get almost no margin on the box office.

So a service that gave people a reason to go the theater more often while encouraging them to spend more on on high-margin concessions (which the author admits is what he does) seems like a win for theaters.

Perhaps I'm missing something, one thing that drives me crazy nowadays is the sentence that hints at something buried in some link:

> And theater chains, particularly AMC, are [absolutely not on board](link to different article on same site that supports this claim, I assume).

Definitely couldn't have simply mentioned an AMC lawsuit against MoviePass, but why add more supporting facts when that might mean cutting anecdotes about what movies the author is now willing to sit through?

I agree with another commenter, this reads more like an ad, sounds more like MoviePass trying to get people to relate to this guy and become "terrifying" subscribers, just like him!

Theaters don't have a problem with it. This is an advertisement for MoviePass disguised as an article.

http://www.paulgraham.com/submarine.html

I thought you need to legally disclose it in the article if you're paying for the exposure.

Possibly, but PG's submarines do not directly pay the outlet. Instead, a contact at the hired PR agency contacts some newspapers reporter and gives them something that could be news. Of course, the reporter wants to publish interesting articles, and they trust the PR agency contact, so very likely they will publish some article about that.

You don't always pay for these articles. Lots of the time press outlets are looking for stories, and PR firms know this. They send a few emails, maybe even give "press releases" that are super close to being an already finished article. The press outlets are cool with this because it helps them get more stories and thus more advertising dollars.

I personally watch out for the submarine around every corner. But did we read the same article? Its specifically talking about the pain theaters will feel after moviepass inevitably collapses and people don’t want to go back to paying full price.

Sounds like a really bad puff piece.

> I don't understand why theaters would have a problem with this...

For a big city theater, there are always customers. But take a more rural cinema, have 60% of the moviegoer population base convert to MoviePass... for the theater, it may see a slight uptick because it isn't that expensive for the users and the cinema still gets the full ticket price. Then imagine MoviePass closing shop - are the 60%, hooked to 10$ or whatever a month while generating twice that in ticket sales, going to come back once MoviePass isn't around any more? There will be a sharp noticeable drop, and this is what scares theater managers. Hell even if it's just 100 people using MoviePass that's $2k in ticket sales a month (given 10$/ticket and 2 movies a month per person), and another $2k a month in sales from soda, popcorn, food and merch.

Especially as outfitting/retrofitting a theater with the newest advancements in dozens-channel audio, 8K 3D digital projections, the newest anti-piracy crap the studios force upon the managers and other stuff is a huge upfront capital investment... I would be scared shitless if I had to do such an upgrade because the customers demand it but I knew at the same time that a lot of the customer base might simply drop off at once due to circumstances way outside of my control.

On the other hand, people who normally don't go to the movies (such as myself, haven't been to a movie since I was a teen, with the exception of taking the stepkids a handful of times about 15 years ago) suddenly find that they really like the experience. And before MoviePass goes away, they will most likely gradually increase their prices, until former non-theatergoers get used to a monthly must-have entertainment expenditure.

If I had to come up with a reason (with no industry knowledge), I'd posit the following:

If MoviePass captures the ticket-buying market in a big way and becomes the gatekeeper for consumer movie-going money, they could feasibly develop direct relationships with distribution companies in the film industry and drastically diminish whatever power theater operators currently have.

As noted by others, there's a common belief theater profit comes largely from concessions. That defines their relationship with the consumer. MoviePass threatens their relationships on the other side, with the film industry, where we are the profitable product.

That's my guess.

Basically, MoviePass' existence means that the current $12 price may not last, whether it be because MoviePass will control so much volume that they'll demand a discount, or because if MoviePass goes belly up, then the users who have been conditioned to "pay less per movie" than the face value will now go to the movies less than pre-MoviePass times.

If the consumer no longer pays $12, or fewer consumers are willing to pay $12, there will be some kind of reckoning higher up the chain between the theaters and the film companies in splitting up the decreased topline revenue.

They get a minority of the ticket price, but it's far from 'no margin'.

Typically in the first week they keep anywhere from 0-25%, but after the first week or two they can be keeping as much as half.

MoviePass is going to be squeezing them for their share.

In addition, AMC was rumored to be planning on rolling out a similar plan with a price roughly double that of MoviePass. The benefit of MP is that there is no chain lock-in.

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