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Comment by chiefalchemist | Hacker News Reader

> The $9.95 “unlimited” plan was a temporary marketing gimmick to drive subscriber growth, and MoviePass was losing money as a result.

Oh come on now, who didn't realize this? It was obviously a loss-leader. Sure they could have done $19.95 or $29.99, but then they would have paid more in marketing / advertising.

Maybe they were deceptive about how sustainable the biz model was at that price point? But God help any investor who couldn't tell that $9.95 didn't have a long term future.

Love might be blind, but evidently greed can be as well.

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The way they were doing it wasn't working (or going to work), but it wasn't obvious to me that there wasn't a way to make it work.

For example, look at Prime. You pay $100/year for effectively unlimited free 2-day shipping. That seems crazy on its face -- especially if you go back when it was introduced. But getting people to buy more can help their core business of selling books/products, which offsets the costs.

With MoviePass if they could get people in at 9.95/month, especially into seats that would be empty otherwise -- and then help the theaters make money on concessions -- then get a kickback on that. I don't if this maths, but it doesn't seem completely infeasible.

That seems crazy on its face

Does it? (Hint: Not really). You're buying something(s) to get the "free" shipping. Furthermore, Amazon was in a position to test this to see what happens. Prime was not something that always existed.

The same can not be said for going to the movies. Presuming MoviePass has to pay the theater for every ticket used, and can't get back say some percentage of the concessions because how are you going to track that, it doesn't take much common financial sense to see that $9.95 isn't going to get you very far.

It can be a short term marketing-friendly loss leader, but beyond that only the naive would see a sustainable business model.

I agree... the way they were doing it wouldn't work.

But AMC did a similar thing just for their own cinemas. You pay $X/month (or whatever) and get free movies for the month (I think they may have had some cap on number of movies per week). And this avoids the issues you mention. Interestingly, AMC had a partnership with MoviePass at one point.

And apparently the AMC program is still running at $23/month (which is definitely more expensive than it was at launch).

>The way they were doing it wasn't working (or going to work), but it wasn't obvious to me that there wasn't a way to make it work.

Especially because it does work when the theaters run a similar program themselves now. Moviepass essentially proved the concept and then the individual chains just stopped taking moviepass and switched to their own version.

There's a pretty good documentary about MoviePass entitled "MoviePass, MovieCrash" that goes into detail about the fraud. It's a pretty wild story.

Mitch Lowe and Ted Farnsworth were very deceptive about Moviepass and its parent company. They also started using shady tactics to prevent paying customers from using the service, like changing power users' passwords and posing it as a technical problem to prevent them from getting tickets to high-profile movies.

Ted Farnsworth is the more interesting character of the two. He's essentially a scam artist, in my opinion.

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