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Comment by colinchartier | Hacker News Reader

This is reminiscent of MoviePass's antics when forced to pay up for the huge deficit per customer they had promised: Change user's passwords to lock them out, freeze out subscribers arbitrarily from blockbusters, etc. [1]

I wonder if anyone at Hoover got the same treatment of being known as a disruptor -- the founder of moviepass is quoted as saying, "Things went a little sideways, so I thought talking to investors now would be, 'Ugh, you started MoviePass.' But it's 'You started MoviePass!'" [2]

[1] https://www.businessinsider.com/inside-story-moviepass-rise-... [2] https://www.bloomberg.com/opinion/articles/2019-08-07/moviep...

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I am constantly astonished by the MoviePass story. The whole business model made no sense.

Even if it could be restricted to be financially viable, the cinema chains were always going to be able to undercut them as they only pay the marginal cost while making money from the concessions.

It could have made sense, when the moonthly subscription cost was 50$, alas I doubt it.

Regal just launched their own unlimited movies subscription for $18 a month. Then again, they don't have to pay full price to a middleman like MoviePass did.

Yes, that was my point. For the cinema chain, the additional cost of a ticket is negligible if they are filling otherwise empty seats, and they make profit on the concessions. So long as they don't cannibalise full price tickets too much, then the maths works well for them. For MP, the arthmetic is completely different

But surely some amount of money from each ticket has to go to the distributor of the movie? I don't think charging 'nothing' for the ticket is just a huge loop hole in the system.

Good point, I'd forgotten about the distributor fees. A quick Google suggest an average of about 50% depending on the film, location and time in the release.

Once you factor in profits from concessions (very high) and the adverts, the maths clearly works out well for the cinema chains. Certainly here in th UK a number of them are really pushing these sorts of schemes.

This is all in comparison to MP, who have to pay the full retail price of the ticket and get nothing from the concessions. The chains can probably absorb two to three times as many visits in a month compared with MP.

MoviePass actually did run as a $50 subscription for a few years and had a viable business model.

Many people only know of MoviePass as the $10 a month subscription service that sprung out of nowhere about 2 years ago, but MoviePass had been around much longer than that.

MoviePass started back in 2011 and originally required you to print out physical vouchers at home, and take them into the theater. MoviePass juggled lots of different pricing models ranging from $25 a month for 3 movies, up to $99 for an unlimited movies. And yes, for a while they had a $50 per month unlimited movie plan.

For the first 6 years of their business, they operated in this semi-sustainable way. They had funding from AOL Ventures, True Ventures, and other venture capital companies during the time but ran a fairly sustainable business.

In 2017 they finally had their "exit" when a publically traded analytics company called "Helios and Matheson" purchased a majority stake in the company. Helios and Matheson saw potential in MoviePass (which had been running "successfully" for 6 years at this point) and wanted to expand it to as many people as possible.

This is when MoviePass decided that the best way to get lots of new users is to offer them something they can't refuse. How about $10 a month for unlimited movies. This led to a myriad of articles and free press about the company and a huge influx of customers. This is when most people had first heard of MoviePass as if it came out of nowhere, but it had a solid 6-year history of being in this business.

The goal of this promotion was only to gain a large influx of customers. It was never intended to be a long term strategy. I also think that H&C (the parent company) intended to make money back by selling customer data (since they are already in that business anyway).

Unfortunately, like the Hoover story, they underestimated how many people would take advantage of this offer for unlimited movies.

Stories like this, combined with personal experiences, have made me very anxious for the exit coming when I'm still invested in the future of the company.

The new owners always envision a different business model and those often span a gamut from slightly sinister to patently absurd.

Startups can have a lot of BS, it's true, but it's a different flavor from the post-exit BS.

95% of movie theater seats go unsold* and much of the profit margin comes from the concession stands. Moviepass wasn’t the right solution as a third party but it was a decent opportunity.

*people don’t perceive this because people only go to popular movies

Movie theater chains running the subscription on their own is much more viable. They are paying per showtime anyway so a full or empty theater doesn't make them any money but the concessions do. Paying for extras like comfy chairs or food is how they get their money. Offering a monthly subscription that only covers tickets would really be the best option for them. They get more people in the theater that might feel obligated to buying food since they didn't just have to buy a ticket.

> They are paying per showtime anyway so a full or empty theater doesn't make them any money but the concessions do.

Perhaps, but the distributor (who gets 40-90% of the ticket cost) would have to agree to it somehow,.

Right, you cut them in on the subscription fees. The theater gets more people willing to go to the movies and the distributor gets pretty much a guaranteed income every month. Figure out the average amount of money people spend on movies every year, divide by 12, and make that the monthly fee. The distributor would see mostly the same income (holiday months might bring in less than years past but the slow months would bring in more than usual). If the average movie goer sees one movie per month with a ticket costing $12, make that the monthly fee. Offer tiered subscriptions if it helps reduce people from going too often.

It's like a gym membership. People like having the option to go to the gym whenever they want. Many gyms offer a per use fees but if you want to go more than once or twice a month, it is cheaper to have the membership. Actual operating costs are fairly low (machines aren't too expensive to fix and clean) but the real money maker is in all of the extra goods and services that you pay extra for.

It should be noted that the founder of MoviePass was replaced by the new owners long before the shenanigans against users.

Related HN discussion: https://news.ycombinator.com/item?id=20636152

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