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Comment by AlexandrB | Hacker News Reader

> We all knew the $10 a month plan was not going to be profitably by itself.

How is this kind of "growth hack" not simply dumping[1]? The only new development here is that dumping is no longer limited to large companies with large war chests thanks to the availability of venture capital.

The more interesting question is can healthy, truly profitable technology companies develop in an environment where they have to compete with startups that are ready and willing to undercut them by losing tons of investor money. I don't think the current status quo is good for the long term health of the valley.

[1] https://en.wikipedia.org/wiki/Dumping_(pricing_policy)

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I don't think the environment will stay like this for long.

Investors in MoviePass will likely not make their money back. Or maybe they'll break even on a sale of assets to some major theater chain, if everyone involved is smart.

Afterward, future investors in companies like this will use MoviePass as another example for the fact the times when you could form a business mostly based on collecting user data is over. The stakes have changed, the goalposts have moved; Google/Facebook sized ingestion of user data is still very profitable, but now startups have to compete with that. So MoviePass knows which movies I go see and where I go before and after... Google knows where I am literally all the time.

They really should have started from day 1 trying to play ball with the theater chains. Theaters always made most of their money on concessions; incentivize upsells into that and get subsidies on ticket prices from the chains. Instead, they burned every bridge with the theaters they could have hoped to make. They'll pay for it.

People going to theaters is on the decline. If MoviePass reverses that trend they will have shown their value. I'm going to wager they're at a tipping point.

But Moviepass’s investors won’t be the ones walking away with anything of value. The big theater chains & Disney were just delivered a product market fit for free. Better than free, because all of the Moviepass money went to them.

I received a MoviePass as a Christmas give. I've learned a few things.

1. I hadn't been to my local theaters in a long time.

2. I was surprised just how convenient it had become now that nobody else is visiting.

3. I am thoroughly enjoying this movie subscription service model combined with the lack of crowds at theaters.

I think I saw maybe 2-3 movies in theaters in 2016, maybe 2-3 up through October of 2017.

I got MoviePass when they had that special deal at Costco, and have gone to ~15 movies (try to go once a week) since.

If I had more free time, I would get it in a heartbeat (and install/uninstall as needed to keep my privacy). My first job was at a movie theater, and I saw 5-7 movies a month from age 16 through 21. I miss seeing movies in theaters, but with kids and work, it's hard to find the time, and when I do it's about $75 to get the family in. That's not cheap.

"lack of crowds at theaters" > I am also not a crowd lover, i too love it when visiting not so popular theaters where i could stretch myself in between the movie, but sad thing is it won't last long isn't it.. either the theatre closes down or the maintenance goes really low it starts to stink..

That is strange to me. For me there is no other feeling like enjoying a movie with hundreds of strangers. Everyone laughing at the same time, people choking back tears, the "class clown" that hoots and hollers at the appropriate time. When the local theater started serving dinner and beer my friends and I became regulars again. Maybe it's just a nostalgic Oregon Trail Generation thing?

Complimentary anecdote: I grew up playing Oregon Trail on the Macintosh, yet I also make a point to always wait at least a week before seeing any movie release so 1) the crowds die down, and specifically 2) so everyone there is there to see the movie and is unlikely to make any sort of noise (ESPECIALLY the class clown, who IMO ruins the movie-going experience)--ideally so I feel like I have the gigantic screen all to myself. If I _did_ have a theater-sized screen all to myself, I'd never go to the movies.

Maybe it's something like an introvert/extrovert thing, rather than a generational thing?

> the "class clown" that hoots and hollers at the appropriate time

This is exactly why I don't like theaters. I go to enjoy the movie, not have a shared social event. The extend of the 'social' aspect is my wife or friend next to me maybe getting an ear whisper, but even that is rare. If I want a shared social movie event I'll go watch The Rocky Horror Picture Show.

Edit: I also grew up playing Oregon Trail

I like those things too, except for the crying baby and teens that won't put their bright cell phones away.

those are the things that keep me out of theaters. it was happening often enough to be an issue. (larger city)

At our local theaters it now seems like the older generation can’t put away their cell phones either.

Reverse that trend by giving away tickets? Is that sustainable?

Theatres will have to find some other way to draw crowds, or they will be replaced by stores and restaurants that make more money per unit area.

I suspect if they do find some other way, it will be based on some relatively new technology (perhaps already existing, like smartphones, or up-and-coming like some kind of AR), or it would have happened already.

I've been trying to thing of a movie theatre / lan party combo, but haven't been able to come up with anything useful.

There's a theater chain in my area that is always crowded and does really well: Alamo Drafthouse.

Their pitch? Pretty much comes down to good service including food and cocktails, at low prices, and a no-noise policy.

You buy a ticket ahead of time picking your exact seats. Tickets are about $11. The pre-show instead of being ads are usually short videos or clips from earlier movies. Food is around $12-16 an entree, alcoholic beverages are between $6 and $20 with most cocktails around $12.

Oh, and if they see your phone or if you're talking during the movie, you get kicked out with the option to be banned.

It's an amazing movie experience, and I regularly go at least once a month. Their food is genuinely good restaurant quality and their drinks are creative, often times with special cocktails or entrees to go along with big releases. It's obviously not an every day thing, but it's cheap enough to be a once a week kind of thing.

> You buy a ticket ahead of time picking your exact seats.

the whole package sounds great, but I would be sold on this detail alone. I hate having to choose between sitting in the theater for 30-45 mins and getting a bad seat at popular films.

MoviePass is majority-owned by Helios & Matheson, a public company (NASDAQ:HMNY).

Helios & Matheson seems to be an Indian outsourcing firm.

I met both the CEO and their investor recently at a conference where they presented. Both are very happy with the growth and the revenues.

They are currently breaking even, as their models predicted. Even paying full price for each ticket. Their innovation was getting Mastercard to issue and process their own card, so the movie theaters can't block them without violating Mastercard policy!

Now their next plans are to promote indie films and much more. I do not think they need all this tracking to make that happen. Also, Uber tracks you before and after the trip.

At Qbix we would never resort to this kind of thing, however the current movie theater model sucks and the prices just keep rising. And also the founder is the same guy who founded Netflix and Redbox! This would be the third time he is upending the movie industry.

Didn't Uber stop tracking after dropoff?

https://arstechnica.com/tech-policy/2017/08/uber-to-stop-tra...

I think these guys will, too.

My guess is that the plan was or is to demonstrate that a subscription model can fill mostly empty theatres, while providing theaters with more stable revenue than they currently experience.

From there, the question is what to price the subscription at. It could be that revenue sharing on $10/mo with a couple added restrictions (No opening weekends) will provide theatres with more than they're currently making.

> How is this kind of "growth hack" not simply dumping[1]?

"Dumping" is bad because it harms unsubsidized competitors. (It also pits foreign governments against private companies.) I fail to see who MoviePass hurt except its own investors.

> Can healthy, truly profitable technology companies develop in an environment where they have to compete with startups that are ready and willing to undercut them by losing tons of investor money

Lyft seems to be doing fine.

> I fail to see who MoviePass hurt except its own investors.

Games on the iOS App Store are generally free (or 99 cents). It is not profitable to recoup your costs by selling the product, because consumers will not pay for an app that costs more money than $1. In order to sustain this environment, the industry has moved to selling data, ads, and other sort of nonsense.

Let's suggest that MoviePass successfully "disrupts" the industry and then gets bought out or dies. What happens if this disruption permanently causes admissions revenue to go down, because consumers expect $10, and as such, movies to be substantially more unprofitable to make?

This sort of long-term "environmental impact" never seems to come up as long as we can pile more ads and tracking on top to make up the difference in unreasonable business models.

They already got bought by Helios & Matheson: http://variety.com/2017/film/news/moviepass-1202527956/

The consumers that bought expensive games aren't the same ones that expect to pay 0.99$ for a game so the comparison doesn't really apply. In particular, people still pay $50 for a game.

I paid more than amount in 80s for a nintendo game as I do now for that $50 game.

> because consumers will not pay for an app that costs more money than $1

I'm quite the opposite. If a game on the play store is low priced/free and contain the "in-app"-purchases label I run far away.

It's a bit sad as some use this method as a demo with only a "full game" unlock in-app and I won't know. But I've been burned by that in the past, i.e. buy a full version without adds of a game and having the "full version" destroyed by adds a year later.

I'm generally extremely wary of buying anything on the play store now and have resorted to only using mail, signal, firefox with ad-block and my public transportation ticket app.. And the PS4 apps

Not sure if Play Store has the same thing, but the App Store lets you expand the IAPs if you scroll down, so you can see whether it's just a full game unlock or garbage ingame currencies.

> as such, movies to be substantially more unprofitable to make?

Then...there will be fewer and cheaper movies made, unless and until consumer demand makes it profitable to produce more again.

This is like market economics 101, people.

>"Dumping" is bad because it harms unsubsidized competitors. (It also pits foreign governments against private companies.) I fail to see who MoviePass hurt except its own investors.

Everyone who might have started a competing company but did the math to figure out they would have to charge more?

>Lyft seems to be doing fine.

Hasn't Lyft been spending billions of dollars without posting a profit just like Uber?

> might have started a competing company

Point well taken, but in the case of MoviePass I'm not sure this is a bad thing?

I can see how it's a long-term harm if a value-adding startup is shut out by a competitor which relies on burning investor money. But I really can't work out what value-added startup MoviePass could be displacing; effectively the only benefit for consumers is the artificially low pricing. It seems like "VC money pit" is the entire story for this one.

> Lyft seems to be doing fine

By what measure? They have hundreds of millions in investor money and afaik aren’t turning any profit?

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