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Comment by Crazometer | Hacker News Reader

The marginal cost is likely significantly lower than the ticketed price. I'm sure there is a win-win there somewhere.

In Australia tickets are about $20 ea retail. Many of the cinemas have deals regularly offering tickets for around $15. If you are with certain telcos you can get tickets all year round for $13.

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That's actually incredibly complex - generally the way the revenue model works is that the Movie company will negotiate a certain percentage that depends on how old the movie is. So in opening weekend 100% of the revenue is probably going to the movie, but 4 weeks in the theater is probably taking 90% of the revenue. So yes, if you can fill those empty seats in the 4 week old showing you can make bank. But MoviePass has no mechanism for increasing sales of 4 week old movies particularly, they're just as likely to canabalize your existing week 1 sales.

Now I don't know what the Australian system is like but in the UK we have an insurance company from whom you can get 2-4-1 vouchers every tuesday if you're a subscriber. Well that solves the exact problem you're talking about - it incentivizes people to buy the tickets that don't normally get filled, whilst not providing any discount during premium times.

I am not sure your statement about the marginal cost is correct. This is a closely guided secret among studios and exhibitors, but the little anecdotal information that leaks out indicates that for well publicized major releases the studios want pretty much the entirety of the ticket price and the theater can only make money off of concessions. There isn't much room for moviepass in here.

Even for movies that are not as well popular and give more margin to exhibitors, it is very hard to see how you can accommodate moviepass and the crazy discounts they give. Lets take a person that sees about 4 movies per month which should be kind of usual for moviepass. That gives about $2.50 per showing. This has to be shared between moviepass, the theater and the movie owner. While before moviepass, only the theater and the movie owner could share $10.

I don't see how this does not end up severely impacting the profitability of the theater, the movie owner or both. I really do not see a win-win in the moviepass pricing model.

I don't think it's a closely guarded secret. The movie theater business is a century old textbook example of a marginal cost loss leader for concession sales.

> I'm sure there is a win-win there somewhere.

$15 popcorn.

Which MoviePass wasn't selling and had no way to sell.

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