They could have had a small but cult business contracting with smaller theater chains, but they didn't.
They could have also bought tickets in bulk, and sold them through the app, but they didn't.
They could have reserved tickets at premiers and sold them at a markup, but they didn't.
They could have done a LOT of things to make money, but they didn't.
I say this as a onetime holder of more than 1% of publicly available shares. And I think at the time, one of the largest non-institutional shareholders.
Lost a lot of money on wanting a dumb "title".
It was already about to be delisted and I think it was sub $1/share. So I looked up how much I'd need to own to match the largest individual investor, and decided.
I could have invested the paltry amount (I actually cannot remember how much, but it was < $10k in my IRA) in something worth while, or... burn it all to own more more than any other individual investor at the time that I did it.
I only held for a couple of days, before selling it at a ~70% loss - or vanguard liquidating when it delisted - I cannot remember now.
But it was a fun ride and brag I got to have. People at the office cheered for me. People in my house berated me.
Considering the Cinemark near me is a $1.50 per ticket second run place...
Anyone could've looked at MoviePass' public filings and determined they would be no problem to AMC.
What if Uber and Lyft didn't subsidize ridesharing for years? Yellow cab service would still be the market leader today.
That is different. Uber and Lyft were paying drivers to drive.
MoviePass was giving people basically free tickets, but paying FULL FARE at AMC and Cinemark.
AMC and Cinemark have no reason to negotiate because what would happen if MoviePass stopped giving away tickets to AMC and Cinemark? Users would leave MoviePass and continue going to AMC and Cinemark at full price.
In your opinion, what's the point of being the main funnel to theaters if you're losing money hand over fist to do so? What was the plan for profitability? Was the goal to somehow strong arm movie theaters into discounted pricing? Why would theaters agree to that when there's no benefit for them to do so, they're the ones with the actual product and it's irrelevant to them if MoviePass survives?
The only way their business model can work is if the majority of customers sign up and never use it, which is a very weird thing for a business to depend on, IMO.
This is essentially the concept of insurance, is it not?
MoviePass is the opposite. It sells/sold a product that is frequent enough and dependent on customers' choices. The MoviePass product is pitched as way to go to the movies whenever and as often as you want, thus maximizing the frequency of costly events (i.e., paying for theater tickets).
Insurance protects people financially from unlikely and *undesirable* events they don't want to happen. Nobody in good faith wants to get in a car accident or have a medical emergency. Insurance "works" by assuming most people won't have to or want to use it.
MoviePass is doing exactly the opposite, though. They're selling a desirable product for much cheaper than normal while paying full price themselves and hoping people won't actually take advantage.
This is basically how gyms are profitable.
Of course there's a limit to how many daily active users one gym can service and it's better for them if they have lots of paying, inactive users. But at no point does a user's activity cost the gym money.
> no benefit
Movie theater attendance has been dropping steadily. Theaters, especially today's multi-plexes, are vast wastelands of empty seats the majority of the time. There absolutely is a benefit to them selling more tickets at off-peak times, or to not-so-hot films, or just as an incentive to sell popcorn. Keep in mind all this extra volume would cost theaters ZERO in additional marketing expense.
But if theaters wanted to do that then they would lower prices themselves.
And for all we know, most people signing up for MoviePass were the same people who were still going to the movies anyways.
A sustainable business is one where you sell cinema tickets for $11 having bought them for $10 with the customer choosing you because you've added more than $1 in value for them.
It's a car racing down a hill. The acceleration looks exponential but it's just going to crash.
I could be totally talking out my ass, but that's what I always figured. I don't see how else they could be profitable.
https://www.businessinsider.com/moviepass-owner-emerged-from...
The company was a classic pump-and-dump; it was never supposed to last this long. Somewhere along the line some other, US-based conmen ("serial entrepreneurs") got involved, probably holding the bag for the founders who got their stock profits and bailed.
The (probably smaller) chains that play ball and negotiate selling cheaper tickets to moviepass get rewarded with more foot traffic, the chains that don't play ball get punished in small ways.
By gently and gradually steering traffic away from AMC, they would've put themselves in a much better position for negotiation.
AMC absolutely did the right thing: they kept their mouth shut, collected the money, waited for MoviePass to fizzle out, then launched their own (presumably profitable) subscription service.