> MoviePass persisted for so long with a model that made no financial sense whatsoever
You can say that about almost every start up discussed on HN
You can say that about almost every start up discussed on HN
"We lose money on each sale but we'll make it up in volume!"
Our little agency ended up moving into eTour's space in Atlanta (VaHi) when they departed. Nice movie theatre built into the space.
Network effect? I'm not sure this would apply to a clothing retailer, but there are lots of services out there that have a marginal cost per customer but can't effectively monetize until they have a sufficiently large customer base and therefore have access to enough data to be marketable.
Exit strategy? A company with x million customers, even if unprofitable and unsustainable in its current state, is worth more than a company with x/n customers that is marginally profitable in many cases.
As for this case in particular... I don't know. I suspect that a case could be made that the money they're losing has them in the media enough that they're basically paying for advertising by being unprofitable. I doubt I would have ever heard of MoviePass if not for them being constantly in the news.
Similarly SpaceX now is being awarded more than 50% of all commercial space launches, but burned money in the beginning.
MoviePass is trying to sell movie tickets for less than they paid for them.
I don't think those are similar at all.
Still, it's not rocket science and probably could have been done much more cheaply (just offering subscription coupons or something).
somehow i doubt it.
If amazon initially dropped ship books to you that they ordered from Borders for $12 and sold to you for $10, they would have gone bankrupt. Amazon generally made money on each individual order.
Planet Fitness isn't burning money every time you go into their gyms.
MoviePass assets decrease every single time any user makes use of them. AMC A-List can possibly survive, MoviePass can't as is.
MoviePass has to demonstrate a model where the marginal revenue per usage is > 0 or that the total cost of a user is easily managable to be under their monthly subscription cost. I'm not convinced either are possible.
I'm a happier customer because I know what I'm getting and have seen 100+ movies on my costco annual subscription, but have zero expectations for them to survive.