The icing on the cake in this article is the following picture caption:
"Mitch Lowe, chief executive of MoviePass, in the company’s office at a WeWork in Manhattan."
So the movie company selling dollar bills for half price is leasing their HQ from a real estate company that owns no physical asssets but has $5b in upcoming leasing liabilities as they proudly arbitrage 15 year triple net leases into 1 - 3 year terms for startups.
At some point the gas on the fire will stop and it may be awful cold for a while.
I'm with you on MoviePass, but I'm unconvinced there's any problem with WeWork's business model. Lacking any assets or output of their own hasn't stopped middlemen from making a mint since the invention of trade.
The problem isn't the lack of assets, it's being heavily dependent financially on other risky companies. This is part of what happened in the dot-com bust -- lots of media properties went under because their advertising portfolio depended heavily on splashy advertising buys from well-funded startups, so when the startups failed and the ads suddenly stopped coming, those publications' balance sheets rather suddenly went from boom to bankruptcy.
To apply to this case: WeWork's services are aimed very heavily at startups, small design/creative operations and solo operators, all of whom could easily be floating at the moment upon the same bubble. If that bubble were to burst, those customers would vanish and WeWork would be in a heap of trouble.
> it's being heavily dependent financially on other risky companies
WeWork has a creative solution to this vulnerability:
"In mid-2017, the giant landlord Brookfield Property Partners L.P was in advanced talks to buy the Lord & Taylor department store building in New York City for about $700 million, when an unexpected buyer swooped in and sealed a deal... Behind the deal was WeWork Cos., which put together the $850 million purchase...
WeWork didn’t put up the money. Instead, it came from a new real estate fund co-managed by WeWork and one of its early shareholders, private-equity firm Rhône Group. The fund aims to raise tens of billions of dollars from investors in coming years to buy buildings where WeWork would become a tenant, people familiar with the fund said."
Maybe this is a stupid question, but, why is that a solution? Presumably the fund's investors want to see the sort of returns they expect from investing in Manhattan real estate. Is WeWork / this fund prepared to turn into a Brookfield-like company if the market for short term leases to startups dries up? And can they produce the same percentage of profit on $850M that Brookfield would have produced from paying $700M for the same property?
When tenants go out of business you can rent your property to other tenants. If we work goes out of business, how will it hurt the owner of the property any more than it would hurt anyone else who would be the owner of the property?
Unless of course they are giving a deep discount to Wework, which would be concerning.
Because the new owner of the property paid $850M for something that an experienced non-WeWork-affiliated landlord was ready to pay $700M for.
So, either the new owner is correct that WeWork's model is sustainable will make them 21% more profit, or they'll be hurt once they try to turn into e.g. Brookfield (or sell their property to e.g. Brookfield for a loss).
No sure it means anything but my first pass I read "The fund aims to raise tens of billions of dollars from investors in coming years to buy buildings where WeWork would become a tenant, people familiar with the FRAUD said."
And in fact, during the dot-com bubble, contagion went even further because a lot of those startups were also buying all kinds of Sun servers, EMC disk arrays, Cisco networking gear and so forth.
The hopeful part here is that a mass weeding out of these companies with no business models at this point would obviously have an impact on those getting free movie tickets and taxi rides today, as well as the relatively modest number of people working for those companies and their associated suppliers. But, at least on the surface, it's not clear how many people outside of the mostly Silicon Valley startup scene would even notice if the bubble popped.
I suspect they get plenty of business from established companies that need extra space or a way to bootstrap offices in new locations. Linkedin, for example, used them to open the Detroit office.
My company has a "real" HQ and then satellite teams at a few different WeWorks. Anecdotally, lots of other people in this WeWork are in similar situations. But I'm still not sure it totally invalidates the larger point; if business were to slow, these offices would probably be the first to go.
Their model is similar to VC where they don't need or even expect everyone to be successful so long as enough of them survive. Conversely, they don't get big paydays when a company strikes it big because they'll just buy a real office.
Cloud Providers are also being used by large profitable companies and in the case of Amazon, they are thier own best customer. If AWS starts losing customers, they can just reduce their capital expenditures and start replacing hardware at a lower rate. Besides AWS also has GovCloud.
Azure seems to be more popular with large profitable enterprises than startups.
It seems that you, and most of the people who have replied to you, would rather live in a world where people don’t spend capital on taking risks that potentially move the world forward.
What are you doing on Y Combinator’s news site? And how have these sort of opinions become popular, the norm on here? I’m so confused.
The theater chains await MoviePass' demise so they can announce their revolutionary chain-specific Pass for just $30/month.
- Conditions apply. No more than one movie per calendar week. Surcharges applicable for IMAX, 3D, and other premium features. Opening nights and weekends excluded. Blackout dates apply.
I pay €23.40/month (about $27.50/month) to be able to watch as many movies as I want in all German UCI cinemas. There are no limitations (I think our record is watching five movies in a day) or surcharges. (I think some select newly renovated or built cinemas do take surcharges for certain special seats or cinemas, but I’m not affected in the city I am in.)
That’s definitely worth it for me, considering that I watch a couple hundred movies per year in the cinema. (You need about 3-4 movies/month to easily get above the €23.40.)
The other big chain chain cinema in the city (cinemaxx) offers a similar flat rate (but at a higher price) and this flat rate hasn’t been in place forever, but for at least a couple of years. I would have assumed that you can get something similar everywhere and if not, why not?
I had the same at Cineworld in Ireland a few years ago. I think at the time I was paying ~€15/mo and a single ticket was €8.
At the time there were a few restrictions, you needed to pay more for 3D or IMAX, and you had to collect tickets from the counter. This last part meant going at peak times was discouraged (as you needed to queue and weren’t guaranteed a ticket), so I usually went at off peak times when the cinema was usually empty.
Are multiplex cinemas really completely filled so often? We always just show up 15 minutes before the film starts and never had any trouble. I mean, we are sad when we can’t find a row with no one directly in front of or behind us …
Obviously you shouldn’t watch the new Avengers movie during the first couple of weeks, but I wouldn’t watch it during those weeks even if I had no flat rate. Cinemas full of people are awful. (Also, I think I can even order online, but in practice that was never necessary and I do want to sit next to my friends.)
Mine's in Germany, I assumed it's part of the UK chain because of the name. After some searching I'm still not sure whether it is. If it is it seems like the management has pretty much abandoned it - Here's the website (pricing): https://cineworld-luenen.de/kino/tree/node4217/city280
Then the movie pass doesn't apply to you. Why even respond to this? Go see your one movie, and others who watch more than one can invest in a monthly pass.
But it does - the whole point of MoviePass, or what cinemas come up with on their own to defeat/replace it, is to remove dollars every month from the pockets of people who don’t see a lot of movies.
Sorry, I don't see what your point is. MoviePass nor the theaters require you to buy a monthly subscription. Go pay for one movie, and be done with it. If you're dumb enough to buy into subscriptions and not use it, that's your issue. This isn't anything new anyhow, Netflix makes money off of people never returning movies for a year.
No, it's to remove dollars every month from the pockets of people who THINK they see a lot of movies, but in reality don't. Just like Costco or any other membership-based wholesaler depend on people having the illusion of value in bulk when in reality a lot of people probably break even or come out worse, when waste is factored in.
Movie theatres probably have high fixed costs and a low variable costs. As such it can be in their best interest to drive up utilisation, even if the revenue per customer per film seen goes down.
€400 for a year (€33/month) and you have to pay it upfront.
I would probably go for it if I had to, but that’s close to my personal limit of what I’m willing to pay. Especially the whole prepaid aspect is a bit hard to swallow. (Since I have my UCI Unlimited Card now for more than a year I can cancel it monthly.)
I recently signed up for Cinemark movie pass for $8.99 a month. What's amazing is that their commercial[1] seems to strongly suggest the tickets are a discount. It never explicitly says so.
It's hilarious because a weekend evening ticket is $7.75 a ticket, and if I buy an IMAX ticket, the "premium upcharge" is exactly $1.76, the price needed to cost the exact same as a normal IMAX ticket ($10.75).
The only reason it makes sense for me to get it is how often I buy several IMAX tickets online, and there's a $1.50 per ticket in "online fees" they waive for movie club members. There was a cost neutral way to avoid online fees before, but they removed it when they launched this to push signups.
I visit the theater enough that it makes sense to do this, but it's sole benefit to me is removing penalties... not gaining any sort of positive discount.
> I recently signed up for Cinemark movie pass for $8.99 a month. What's amazing is that their commercial seems to strongly suggest the tickets are a discount. It never explicitly says so.
They probably are in high-cost urban markets which probably account for a large share of their volume.
> It's hilarious because a weekend evening ticket is $7.75 a ticket,
My local Cinemarks' prices for weekend evening tickets for standard-format 2D (they don't have IMAX, but do have XD at an upcharge) range from $11.75-$12.75.
But even then... why sell a plan providing me no discount? Shouldn't I get the same discount others would off their tickets?
It's strange to hear there are places Cinemark has significantly higher prices: I live in a fairly affluent suburban area, my Cinemark is literally around the corner from a significant number of multi-million dollar properties. Anyone who sees movies near me can arguably afford the higher ticket prices.
But thanks for the non-local perspective on the matter!
Keep in mind that urban areas have much higher property values, which get passed down by landlords in the form of much higher rents per sq ft. Chain movie theaters are more or less the same size everywhere you go, so an equivalently sized movie theater in a bustling downtown is likely paying top dollar.
But is the commercial real estate expensive there? In a lot of suburban areas commercial areas can be significantly detached from residential in terms of pricing to to rezoning difficulties.
Local vs. National pricing is always funny like that. For example, a local doughnut chain had a sale that was actually $0.01 more expensive than the local price.
"Unsurprisingly, Manhattan (average adult ticket price of $12.59 when matinee pricing is included) was the most expensive of the city’s five boroughs. Not a single Manhattan theater we studied offered a sub-$10 price for a regular adult ticket. The average cost of the borough’s 28 theaters was $14.30."
This one just happens to be my closest, preferred theater:
"The most expensive regular adult ticket in New York City was for $17.49 at the AMC Loews on Manhattan’s Upper West Side."
At those prices, MoviePass is a ridiculous deal for me.
It doesn't need to be that restrictive. Just a couple of dollars more than a one standard deviation consumer's monthly spend (or whatever they settle on).
The unit cost of one person in a cinema is normally negligible after all, so a specific cinema just need to convince members to spend a little more, and to always spend it at their cinema. Moviepass does neither of these things.
This is definitely a model which can work for cinemas. Just not at this price point and business model.
Here's the problem, or at least part of it; executives don't usually give a damn what the most reasonable option is. This comes across their desk and they want to know how much they can get away with. It may not need to be that restrictive, sure... but the question they're looking at is how restrictive it can be while still netting a profit.
The other problem is that I think the cost of someone using a subscription service will be higher than the average moviegoer, simply because going to the movies often is cost prohibitive for a lot of people.
Sure but if cinemas aren't full (and they rarely are except for opening weekend) the actual cost of having someone in the theatre is nothing. If the target customer sees 2 movies @$12 each a month it doesn't matter if they see 10 at $30 total as long as they aren't filling the cinema - the cinema is still making $6 more off them, plus any snacks they buy.
Maybe it's a matter of just not allowing subscription passes for opening weekend (or only at the door if it's undersold rather than in advance). Maybe you get your seat allocated at ticket pick up rather than in advance so full-fare paying customers get the best seats. There's obviously going to be a compromise somewhere, but it doesn't have to be unworkable.
Do theaters pay studios per showing or per ticket sold? If it’s per ticket sold, then monthly passes could be cost prohibitive for theaters: they would end up eating the cost of people going to 5 movies in a week, while owing the studios more. If they pay per showing, then monthly subscriptions with caveats like “only 30 seats for monthly passes available, until an hour before the show, when all seats become available” could make sense.
> Do theaters pay studios per showing or per ticket sold?
Percentage of revenue, i.e. per ticket sold [1]. That said, the studios' take rates vary "as you move into the second and third weeks of release," when "the percentage starts to swing to" a greater take rate for the cinema. A movie pass which blacks out the first N weeks after release could thus be economical (if something the studios would fight tooth and nail).
There are some super shady deals here. If you want to be able to show $BLOCKBUSTER, you might have to agree to pay for a minimum of N seats/day of showings of $UTTER_CRAP. If nobody shows up, the studio still gets paid, and of course the stars of $BLOCKBUSTER don't see a cent of that money.
> so they can announce their revolutionary chain-specific Pass for just $30/month
I know film buffs who would grab this deal in a heartbeat. The cinemas would win, too, by turning brand-indifferent customers into loyal ones (without having to invest in reclining seats or liquor licenses).
One movie per week makes it not worth it. It's only marginally better than buying 4 tickets individually a month but requires the the upkeep of a subscription that you may not use on a regular basis. Nobody will go for one movie a week for 30 a month.
MoviePass is just an experiment. An important thing they have proved is that there are a lot of people still interested in going to theater and reason they are not doing so is because of lack of flexibility in current business model. I don't see any theater chain learning from this even while they are still going on the same path as RadioShack and Blockbuster. I think eventually MoviePass or some other startup will come around and they will start their own popup-theaters to implement business model such as this.
They boast of the CEO growing customers from 20,000 to 2M by cutting prices. But by cutting prices, they lose more money per customer. So by growing customers they grow losses.
One thing you see time and time again is some version of the old joke: “We lose money on every unit, but we make it up on volume!”
I just can't stop wondering: had they been VC-backed rather than a public company, would they manage to raise >10x their current market cap? There are plenty of other examples like Uber and WeWork that get plenty of funding based on speculation of finding a better business model in the future; what stopped MoviePass from riding that wave?
There's probably a profitable business model in selling a cheap movie pass that lets you watch all you want Monday through Wednesday. Movie theaters would go for a bulk buy for their dead days.
Their business was selling dollar bills, and their model was to start by charging $0.75 to drum up business. Once they had a large user base and a well-tested service, they were going to raise prices to $1.25 to become profitable.
(MoviePass might be a good idea, but it looks like almost all the value they actually offered came from the unsustainable pricing.)
I still think private ownership for something that is 7.5 - 12kgs makes more sense. Always with you, charge yourself, not cost prohibitive. The market for transient ownership and use still doesn't make that much sense to me, but I guess it works.
I actually bought one of the scooters bird used because they’re cheap and they don’t usually have one right by my house... but I still rent them semi-frequently. They come in handy whenever you need to do a one-way trip, or spontaneously realize one would be useful and didn’t bring yours, and it’s kind of nice to not have to worry about maintenance/charging.
i disagree for exactly the reasons you listed. i don't want to charge it myself, i don't want to lug it around or worry about it's security once i'm at my destination. i'm paying for the ability to leave it anywhere.
I agree that it is better, I guess I'm just surprised that the unit economics work. For the price it is great to relieve yourself of the burden, but they have to contend with chop shops, private ownership, damage, network rebalancing, scooter hostage and other issues. If they get it to work financial it will be great!
That's how Planet Fitness sells gym memberships for $15/month. People are not good at predicting their future behavior. I don't like their gyms, but the business model can make money.
If movie pass owned the product they were selling they might have been able to pull it off.
Nope, gym memberships work the way they do, because people feel like they should have a gym membership and cancelling one is considered a failure, plus actually going to a gym is not fun. I've had a membership for over a year and I haven't been once, but I would feel bad about cancelling. There is no expectation on anyone to own a cinema pass, and there is no reason not to use it if you have it. Right now the cinema is so expensive that I only go to see the biggest blockbusters - I might be interested in the smaller films but I can't justify paying to see a film I might not like. But with a movie pass? I'd go all the time.
Going off-topic here but: you're doing it wrong. The gym is supposed to be fun; have you tried joining different classes or swimming? If you're not into working out solo (I'm usually not for example) there are usually group classes of all types available. Talk to them: they'll be happy to help you find something that you'll enjoy doing or alternatively just cancel the membership, if you find that embarrassing just don't mention it to anyone.
Nobody would ever go to the gym regularly if they didn't find it to be a genuinely fun activity.
I went to the gym regularly for for more than a decade. Throughout the years I did "tradition" workouts, classes, swimming, yoga, spinning, pilates, solo workouts, workouts with a friend, everything you could possibly think of I tried.
Still not fun and was never fun. Working out while watching TV even makes TV unenjoyable.
Even the activities I did as a kid weren't fun: soccer, dance, gymnastics (which I was good at).
I did it for the same reason I clean the dishes, because it's something I "should" do and it improvedy quality of life.
I understand that not every activity pleases everyone but in that case I'd just drop the subscription, not using it would make me feel far worse than not having it, I'd say. I certainly couldn't imagine myself setting foot in the gym if, like you, I didn't enjoy it.
Have you tried weight lifting? I hate pretty much all rote cardio but I have been lifting for almost 10 years now. Since it is low reps, you don't get that progressive burning. Plus, it is cool to see progression as you get bigger and stronger over time.
There's more than one reason gym memberships work they way they do. Subscriptions, especially low cost ones, tend to run longer than if a person paid per usage. That's why there's so many subscription scams.
PF has the lunk alarm. Netflix's dvd service use to give preference to its less active customers on new releases. If MoviePass owned their product they could play that game as well. Like price discrimination, but modifying the value.
Another angle to look at it, I had netflix subscription for a long time, but I would very rarely use it but I also didn't want to cancel just incase I wanted to see something that might be interesting. Its an irrational way of thinking, because you can always sign up anytime you want, after closing your subscription. But I know quite a few people who do it.
Netflix needs very little commitment to use, just a few mouse clicks and you are in. With moviepass you actually need to go to a movie theter and hope the sits are not full and needs your physical commitment to use their service.
Like Gym membership, the first few months of every year people might jump into it but that not so much - but most likely will continue to pay for it.
I am not saying moviepass will be a success but there are some solid logic to their business model and it just might work, as long as they have the fund for the initial loss from new users.
This is significant - it's not just that gyms want memberships from people who forget they're paying or get locked in, it's that they want low occupancy.
If only 1% of your members want to use a squat rack at peak hours, you need gear and space for one rack per 100 members. But if 10% of your members are in squatting at noon on Saturday, you have 10x the capital and maintenance costs. And that's even before hardcore members create other costs like wanting unusual equipment most people won't use.
The obvious answer is pricing discrimination - people who work out more care enough to pay more. But it's hard for one gym to sell tiered access to facilities, plus the different groups often don't want to work out together. Hence, Planet Fitness.
It's hard for me to see what MoviePass could do in this vein. They have the same low-occupancy objective, but much less consumer optimism (who makes a New Year's Resolution to see more movies?) and much less ability to shape behavior; either you want to see a movie or you don't. The only option I can think of is horizontal integration - gyms target either high- or low-use consumers with open access, but MoviePass can more easily sell "x visits per month" for a range of X.
There's actually an interesting episode of the Recode Media podcast where he talks about their business model. There's an element of 'the gym model' but they also plan on leveraging MoviePass as an advertising/promotional tool. i.e., customers are already paying to watch movies and they want to maximise how much they use the service, so MoviePass promotes more obscure/indie movies that may be of interest.
I’ve only seen like one movie this month so very possible. When I signed up I watched a movie a day until there was nothing else. I bet most people will be the same. Moviepass will probably have to get people into year plans only so there’s no subscribing just to May/June/July for the big blockbusters.
But yeah it’s pretty dumb for that to be their only game plan. They could pivot and license their tech out to chains to run their own programs - especially smaller chains.
"Most businesses would close if their customers never showed up. An empty restaurant is a disaster. An empty store means bankruptcy. At a gym, emptiness equals success.
Today on the show, the mind games that gyms play with you. From design to pricing to free bagels, gyms want to be a product that everyone buys, but no one actually uses."
Gyms rely on their clients optimism to sign up, but profit on their lack of commitment, which seems to be what MoviePass is banking on. Early adopters tend to be the most vocal and the most intent on extracting value, so I can see that if they hit a certain level of users, there's a chance it could be as profitable as a gym.
The question comes down to one of runway, and it's tough to tell if the CEO is being truthful about future investment.
It seems risky but I'm curious to see if I should give it a try now vs. waiting until they get more "creative" with their plans.
I think this is a perfect example of what the people want I'm home all companies are too blind to see it. Of course we want to go to the movies, but with the current pricing and alternatives such as Netflix and torrents (where it is legal) why would we? Some companies are just too stubborn to survive, trying to maximize current profit while destroying their long-term viability.
It will be interesting to see what happens. Demand has spoken at this price point. Will supply come around to accept it and produce movies for e.g. $25m instead of $100m?
There are tons of relatively modest budget movies out there. They mostly aren't what draw the big crowds though. It's the big action franchises that make most of the money, not the small prestige dramas.
Is watching at home versus going to the theater really a money thing though? I guess there are some people discouraged by theater pricing but then these passes are oriented toward heavy users.
Personally there are a lot of reasons why I usually watch at home but sometimes go to a new release on a big screen. Money doesn't really factor in.
For me personally the cost of a movie ticket is a rounding error, even at more expensive cinemas.
The experience of watching a movie at home, with a few close friends, on a 65 inch OLED, with a Dolby Atmos system, and access to my beer fridge and refreshments from the supermarket, is far superior to anything a cinema could offer.
> The experience of watching a movie at home... is far superior to anything a cinema could offer.
This, at least, theaters seem to have realized. Increasingly, (urban) theaters are offering seat choice at booking, cushy reclining chairs, real food, and full bars. Sure, you've got to go out, and dinner and two beers will run you $40. But if you don't care about cost, you can at least see new releases under conditions as nice as home.
It might be too little, too late, but there's at least some recognition that a big screen and good sound are no longer a theater-exclusive draw.
Every now and then I like to catch an anticipated new release on IMAX or whatever. But we're talking maybe once a year. I'm with you that for a typical movie night, I'd just as soon watch at home. Even if someone were to give me free movie passes, it's more planning and time--and I have to drive a good 20 minutes--for an experience that isn't as good in a lot of ways as I can get at home.
The only stuff I watch in the theater are Star Wars movies, and occasionally MCU stuff. I have a large screen projection system at home that rivals most theaters. It's paid for itself in both $$ saved, and sanity from not killing the inconsiderate filmviewers.
Well this is Hacker News with many tech people making X00.000/year, but for most people paying $10-20/movie is significant enough! While it is also a rounding error for me now, I feel outraged when I go to the cinema in Japan and have to pluck ~$15 for a movie. Mind you, I am originally from Spain where torrenting is legal because sharing our culture is more important than profit.
I feel the same about concessions. I realize it might all be calculated to the penny for peak income but I would be more keen to regularly buy concessions if I wasn't paying close to $20 for a soda and a popcorn. I would think dropping the cost a bit might increase the number of folks buying. (The margins on it all are what really piss me off.)
I also wish it wasn't essentially a flat price for everything. A small, medium or large anything is generally just fifty cents to a dollar away from any other size. I want a small soda and popcorn I get pressed to size-up for that extra few cents to get a gallon/barrel of each.
"The margins on it all are what really piss me off."
Not that it's your problem as a consumer, but factor in that your ticket price pretty much all goes to the studio. (correct?) And getting $8.50 for the large which costs $0.14 better than getting $8.00 for small which costs $0.12
The difference is that most movie showings are not full, and every empty seat is $12 lost. If you have 50 people seeing a movie at $12, and you'll get more than 10 more people watching it if you price it at $10, you'll make a profit (not to mention concessions).
It seems like MoviePass is stuck between a marginal cost rock and user expectation hard place.
But if AMC adds their own pass subscription, I don’t think they would be. My impression is that theater chains have great margins and very low marginal cost to add one more viewer. In my area, there are only a few theaters playing the major hit movies, and I don’t think it would be a problem to subscribe to a particular theater.
I really think AMC is holding onto a $19/month plan for unlimited movies, which would be profitable for them out of the gate.
I signed up for MoviePass 5 months ago, thinking I'd be more likely to go watch movies in a theater if it "doesn't cost anything" to go. Sadly, that's not been the case for me. I haven't been to the theater once, so I've basically wasted $50.
Time to cancel MoviePass, and I guess also time to admit that I just don't care that much about seeing movies on the big screen.
I suppose I was the opposite. I enjoy seeing the big titles of the year, but I usually only go to one or two because I really don't mind waiting another 3 months for it to come out on bluray or some instant video service. Whereas after I got moviepass, I go see pretty much everything that catches my attention.
Does it make sense to get MoviePass while it's still alive?
On one hand, the subscription costs less than a single movie ticket where I live, and even as an infrequent movie-goer I'm pretty sure I'd save money.
On the other hand, they're obviously going to crash and burn, and who knows what they'll do with my account at that point. What's the worst I can expect? Spam? Robocalls? Identity theft?
Don't do it. You have to install their app and use a special credit card they send you in conjunction with the app. That's how they ensure you are not cheating/sharing.
I had it for a month and then tried to cancel before my renewal; it took 3 full weeks (21 days!) of pestering their support over email every 3-5 days to escalate my refund case, and I had to threaten a BBB case before my ticket actually got escalated, and I finally got refunded 4 days after the threat. They do not have phone support at all.
I don't have Movie Pass, but according to moviepass subreddit they do have phone support: 646-400-0801 11AM-8PM EDT.
(Might be newly added depending on when you cancelled). Doesn't necessarily mean they have good customer support, but probably a step in the right direction.
Damn, wish I saw that in the TOS, would have saved me a lot of trouble haha. But as indicated, the (MUCH needed) phone support came out in Jan 2018. I cancelled in November.
So they plan to make up the gaps by selling their customers data. How valuable is this data in the first place? It feels that so many companies, whether social network, search engines, advertising companies, etc are all building the same profile. At the end there is only so many attributes a company can collect on its users, if everyone has them are they worth anything?
The AMC average ticket price for watching a movie at AMC Theatres in the most recent financial quarter was $9.33. From what we can tell, by definition and absent some other form of other compensation, MoviePass will be losing money on every subscriber seeing two movies or more in a month. [...] In AMC’s view, that price level is unsustainable and only sets up consumers for ultimate disappointment down the road if or when the product can no longer be fulfilled. AMC also believes that promising essentially unlimited first-run movie content at a price below $10 per month over time will not provide sufficient revenue to operate quality theatres nor will it produce enough income to provide film makers with sufficient incentive to make great new movies. Therefore, AMC will not be able to offer discounts to MoviePass in the future, which seems to be among their aims. While AMC is not opposed to subscription programs generally, the one envisioned by MoviePass is not one AMC can embrace.
> AMC also believes that promising essentially unlimited first-run movie content at a price below $10 per month over time will not provide sufficient revenue
MoviePass has proven theaters are interesting to more people than I'd have thought in a world of 70"+ TVs and 4K streaming. A smarter Pass could experiment with non-peak times, second release movies, and concessions.
Average ticket price really isn't the best metric with the fixed costs of a theater.
If Movie Pass manages to do well they are at the mercy of a middle man that can turn supply on and off for their cinemas and ultimately crunch them down on price.
If Movie Pass fails it still helps set an unrealistic price for the cinemas who won't be able to match it. It may drive even more people away from cinemas who no longer wish to pay full price.
They foresee Moviepass flexing it's muscle to drop the average cost of tickets below what's already a low margin service. Also, I wonder how many Moviepass users get concessions each time they see a flick.
I buy a soda, and bring a friend with my extra pass and they usually get a large popcorn. Very happy with it. I've seen tons of good movies I wouldn't have seen with friends that I wouldn't have seen.
I think it was just the editor trying to create a strawman. The only objection I saw was an AMC exec saying their pricing model is flawed. That's not really hating it's existence.
I don't think the idea of selling advertising is very good for MoviePass, as in suggestions on what to watch or where to eat, etc. They could have some success with different tiers of service and letting the studios pay to have their movie in a cheaper tier - like a Bronze package at $10/mo that only gives access to movies where studios have paid them X and people have to play a higher rate for Silver, etc. to recoup the cost of seeing movies they would take a loss on. That could make some sense since studios have turned many movies into advertisements for merchandise.
I think cinema subscriptions are obviously the future: I don't even think the cinemas care that much about ticket prices. Food, candy, beverages – that's where the money is earned.
Like me opening a business next to Walmart and $100 a month offer to buy, say, $500 Walmart stuff for each user. I'd make up in volume pretty quickly :)
MoviePass would make sense if the major theater chains did it and focused on slow days. If the lights are one, movie playing and theater staff has to be on site, adding additional users would cost next to nothing. Add popcorn and soda purchases and they'd make out like bandits.
They should change the model to only sell the tickets at or after the listed start time of the movie. That way all the tickets sold are all profit since those tickets probably wouldn't have been sold anyway.
AMC has been struggling at keeping people in the theaters. Shouldn’t they be thankful for a company like MoviePass that gets people into theaters again, even if it’s at a lower ticket price?
"Mitch Lowe, chief executive of MoviePass, in the company’s office at a WeWork in Manhattan."
So the movie company selling dollar bills for half price is leasing their HQ from a real estate company that owns no physical asssets but has $5b in upcoming leasing liabilities as they proudly arbitrage 15 year triple net leases into 1 - 3 year terms for startups.
At some point the gas on the fire will stop and it may be awful cold for a while.
To apply to this case: WeWork's services are aimed very heavily at startups, small design/creative operations and solo operators, all of whom could easily be floating at the moment upon the same bubble. If that bubble were to burst, those customers would vanish and WeWork would be in a heap of trouble.
WeWork has a creative solution to this vulnerability:
"In mid-2017, the giant landlord Brookfield Property Partners L.P was in advanced talks to buy the Lord & Taylor department store building in New York City for about $700 million, when an unexpected buyer swooped in and sealed a deal... Behind the deal was WeWork Cos., which put together the $850 million purchase...
WeWork didn’t put up the money. Instead, it came from a new real estate fund co-managed by WeWork and one of its early shareholders, private-equity firm Rhône Group. The fund aims to raise tens of billions of dollars from investors in coming years to buy buildings where WeWork would become a tenant, people familiar with the fund said."
https://www.wsj.com/articles/wework-the-workspace-giant-want...
Unless of course they are giving a deep discount to Wework, which would be concerning.
So, either the new owner is correct that WeWork's model is sustainable will make them 21% more profit, or they'll be hurt once they try to turn into e.g. Brookfield (or sell their property to e.g. Brookfield for a loss).
The hopeful part here is that a mass weeding out of these companies with no business models at this point would obviously have an impact on those getting free movie tickets and taxi rides today, as well as the relatively modest number of people working for those companies and their associated suppliers. But, at least on the surface, it's not clear how many people outside of the mostly Silicon Valley startup scene would even notice if the bubble popped.
To be fair, that's just a rehash of the way things played out in 2008. I'm sure when the crunch comes, it'll come from somewhere less expected.
They work for our satellite offices in Denver (one designer) and London (two account people).
Azure seems to be more popular with large profitable enterprises than startups.
For those unaware, this is not a metaphor.
https://www.wsj.com/articles/weworks-debt-receives-junk-rati...
https://www.bloomberg.com/gadfly/articles/2018-04-25/wework-...
What are you doing on Y Combinator’s news site? And how have these sort of opinions become popular, the norm on here? I’m so confused.
Two entirely different things.
The parent wasn't sharing opinions but facts.
- Conditions apply. No more than one movie per calendar week. Surcharges applicable for IMAX, 3D, and other premium features. Opening nights and weekends excluded. Blackout dates apply.
I pay €23.40/month (about $27.50/month) to be able to watch as many movies as I want in all German UCI cinemas. There are no limitations (I think our record is watching five movies in a day) or surcharges. (I think some select newly renovated or built cinemas do take surcharges for certain special seats or cinemas, but I’m not affected in the city I am in.)
That’s definitely worth it for me, considering that I watch a couple hundred movies per year in the cinema. (You need about 3-4 movies/month to easily get above the €23.40.)
The other big chain chain cinema in the city (cinemaxx) offers a similar flat rate (but at a higher price) and this flat rate hasn’t been in place forever, but for at least a couple of years. I would have assumed that you can get something similar everywhere and if not, why not?
At the time there were a few restrictions, you needed to pay more for 3D or IMAX, and you had to collect tickets from the counter. This last part meant going at peak times was discouraged (as you needed to queue and weren’t guaranteed a ticket), so I usually went at off peak times when the cinema was usually empty.
Obviously you shouldn’t watch the new Avengers movie during the first couple of weeks, but I wouldn’t watch it during those weeks even if I had no flat rate. Cinemas full of people are awful. (Also, I think I can even order online, but in practice that was never necessary and I do want to sit next to my friends.)
If my local Cinema (incidentally Cineworld) offered it I would seriously consider going there more often.
https://www.cineworld.co.uk/unlimited
For reference, at my local Cineworld in Greenwich, 17.90 is less than the cost of two adult tickets.
Because this is a discussion forum and OP is discussing this price point.
€400 for a year (€33/month) and you have to pay it upfront.
I would probably go for it if I had to, but that’s close to my personal limit of what I’m willing to pay. Especially the whole prepaid aspect is a bit hard to swallow. (Since I have my UCI Unlimited Card now for more than a year I can cancel it monthly.)
It's hilarious because a weekend evening ticket is $7.75 a ticket, and if I buy an IMAX ticket, the "premium upcharge" is exactly $1.76, the price needed to cost the exact same as a normal IMAX ticket ($10.75).
The only reason it makes sense for me to get it is how often I buy several IMAX tickets online, and there's a $1.50 per ticket in "online fees" they waive for movie club members. There was a cost neutral way to avoid online fees before, but they removed it when they launched this to push signups.
I visit the theater enough that it makes sense to do this, but it's sole benefit to me is removing penalties... not gaining any sort of positive discount.
[1] https://www.youtube.com/watch?v=yIfdw2XgPXs
They probably are in high-cost urban markets which probably account for a large share of their volume.
> It's hilarious because a weekend evening ticket is $7.75 a ticket,
My local Cinemarks' prices for weekend evening tickets for standard-format 2D (they don't have IMAX, but do have XD at an upcharge) range from $11.75-$12.75.
It's strange to hear there are places Cinemark has significantly higher prices: I live in a fairly affluent suburban area, my Cinemark is literally around the corner from a significant number of multi-million dollar properties. Anyone who sees movies near me can arguably afford the higher ticket prices.
But thanks for the non-local perspective on the matter!
https://www.strongtowns.org/journal/2017/8/9/gary-morris-law...
"Unsurprisingly, Manhattan (average adult ticket price of $12.59 when matinee pricing is included) was the most expensive of the city’s five boroughs. Not a single Manhattan theater we studied offered a sub-$10 price for a regular adult ticket. The average cost of the borough’s 28 theaters was $14.30."
This one just happens to be my closest, preferred theater:
"The most expensive regular adult ticket in New York City was for $17.49 at the AMC Loews on Manhattan’s Upper West Side."
At those prices, MoviePass is a ridiculous deal for me.
Source: https://www.valuepenguin.com/2015/04/movie-ticket-prices-ins...
The unit cost of one person in a cinema is normally negligible after all, so a specific cinema just need to convince members to spend a little more, and to always spend it at their cinema. Moviepass does neither of these things.
This is definitely a model which can work for cinemas. Just not at this price point and business model.
The other problem is that I think the cost of someone using a subscription service will be higher than the average moviegoer, simply because going to the movies often is cost prohibitive for a lot of people.
Maybe it's a matter of just not allowing subscription passes for opening weekend (or only at the door if it's undersold rather than in advance). Maybe you get your seat allocated at ticket pick up rather than in advance so full-fare paying customers get the best seats. There's obviously going to be a compromise somewhere, but it doesn't have to be unworkable.
Percentage of revenue, i.e. per ticket sold [1]. That said, the studios' take rates vary "as you move into the second and third weeks of release," when "the percentage starts to swing to" a greater take rate for the cinema. A movie pass which blacks out the first N weeks after release could thus be economical (if something the studios would fight tooth and nail).
I know film buffs who would grab this deal in a heartbeat. The cinemas would win, too, by turning brand-indifferent customers into loyal ones (without having to invest in reclining seats or liquor licenses).
I worry we are approaching peak hubris
People will go to a lot of movies if you make them free while burning through VC money? Holy shit what a scoop!
One thing you see time and time again is some version of the old joke: “We lose money on every unit, but we make it up on volume!”
It's a smart way to grow your app, but they need to be smart to sell something good to monetize their usr base wel now.
Their business was selling dollar bills, and their model was to start by charging $0.75 to drum up business. Once they had a large user base and a well-tested service, they were going to raise prices to $1.25 to become profitable.
(MoviePass might be a good idea, but it looks like almost all the value they actually offered came from the unsustainable pricing.)
No business survives when its runs on their customers stupidity.
If movie pass owned the product they were selling they might have been able to pull it off.
Going off-topic here but: you're doing it wrong. The gym is supposed to be fun; have you tried joining different classes or swimming? If you're not into working out solo (I'm usually not for example) there are usually group classes of all types available. Talk to them: they'll be happy to help you find something that you'll enjoy doing or alternatively just cancel the membership, if you find that embarrassing just don't mention it to anyone.
Nobody would ever go to the gym regularly if they didn't find it to be a genuinely fun activity.
Still not fun and was never fun. Working out while watching TV even makes TV unenjoyable.
Even the activities I did as a kid weren't fun: soccer, dance, gymnastics (which I was good at).
I did it for the same reason I clean the dishes, because it's something I "should" do and it improvedy quality of life.
I can certainly appreciate some people get enjoyment out of physical activity, but just the same, some people find it miserable.
PF has the lunk alarm. Netflix's dvd service use to give preference to its less active customers on new releases. If MoviePass owned their product they could play that game as well. Like price discrimination, but modifying the value.
Netflix needs very little commitment to use, just a few mouse clicks and you are in. With moviepass you actually need to go to a movie theter and hope the sits are not full and needs your physical commitment to use their service.
Like Gym membership, the first few months of every year people might jump into it but that not so much - but most likely will continue to pay for it.
I am not saying moviepass will be a success but there are some solid logic to their business model and it just might work, as long as they have the fund for the initial loss from new users.
If only 1% of your members want to use a squat rack at peak hours, you need gear and space for one rack per 100 members. But if 10% of your members are in squatting at noon on Saturday, you have 10x the capital and maintenance costs. And that's even before hardcore members create other costs like wanting unusual equipment most people won't use.
The obvious answer is pricing discrimination - people who work out more care enough to pay more. But it's hard for one gym to sell tiered access to facilities, plus the different groups often don't want to work out together. Hence, Planet Fitness.
It's hard for me to see what MoviePass could do in this vein. They have the same low-occupancy objective, but much less consumer optimism (who makes a New Year's Resolution to see more movies?) and much less ability to shape behavior; either you want to see a movie or you don't. The only option I can think of is horizontal integration - gyms target either high- or low-use consumers with open access, but MoviePass can more easily sell "x visits per month" for a range of X.
But yeah it’s pretty dumb for that to be their only game plan. They could pivot and license their tech out to chains to run their own programs - especially smaller chains.
Since it's now only good for once a week, they will not.
"Most businesses would close if their customers never showed up. An empty restaurant is a disaster. An empty store means bankruptcy. At a gym, emptiness equals success.
Today on the show, the mind games that gyms play with you. From design to pricing to free bagels, gyms want to be a product that everyone buys, but no one actually uses."
From Planet Money: https://www.npr.org/sections/money/2014/12/17/371463435/epis...
Still, the NPR story mentions 15$/month Gym! in Manhattan! And its a huge place that can hold 300 people.
Americans are crazy...
The question comes down to one of runway, and it's tough to tell if the CEO is being truthful about future investment.
It seems risky but I'm curious to see if I should give it a try now vs. waiting until they get more "creative" with their plans.
Personally there are a lot of reasons why I usually watch at home but sometimes go to a new release on a big screen. Money doesn't really factor in.
The experience of watching a movie at home, with a few close friends, on a 65 inch OLED, with a Dolby Atmos system, and access to my beer fridge and refreshments from the supermarket, is far superior to anything a cinema could offer.
This, at least, theaters seem to have realized. Increasingly, (urban) theaters are offering seat choice at booking, cushy reclining chairs, real food, and full bars. Sure, you've got to go out, and dinner and two beers will run you $40. But if you don't care about cost, you can at least see new releases under conditions as nice as home.
It might be too little, too late, but there's at least some recognition that a big screen and good sound are no longer a theater-exclusive draw.
I also wish it wasn't essentially a flat price for everything. A small, medium or large anything is generally just fifty cents to a dollar away from any other size. I want a small soda and popcorn I get pressed to size-up for that extra few cents to get a gallon/barrel of each.
Not that it's your problem as a consumer, but factor in that your ticket price pretty much all goes to the studio. (correct?) And getting $8.50 for the large which costs $0.14 better than getting $8.00 for small which costs $0.12
But if AMC adds their own pass subscription, I don’t think they would be. My impression is that theater chains have great margins and very low marginal cost to add one more viewer. In my area, there are only a few theaters playing the major hit movies, and I don’t think it would be a problem to subscribe to a particular theater.
I really think AMC is holding onto a $19/month plan for unlimited movies, which would be profitable for them out of the gate.
Time to cancel MoviePass, and I guess also time to admit that I just don't care that much about seeing movies on the big screen.
On one hand, the subscription costs less than a single movie ticket where I live, and even as an infrequent movie-goer I'm pretty sure I'd save money.
On the other hand, they're obviously going to crash and burn, and who knows what they'll do with my account at that point. What's the worst I can expect? Spam? Robocalls? Identity theft?
I had it for a month and then tried to cancel before my renewal; it took 3 full weeks (21 days!) of pestering their support over email every 3-5 days to escalate my refund case, and I had to threaten a BBB case before my ticket actually got escalated, and I finally got refunded 4 days after the threat. They do not have phone support at all.
(Might be newly added depending on when you cancelled). Doesn't necessarily mean they have good customer support, but probably a step in the right direction.
So there you are, a simple way to terminate your own account :-)
When it goes under, you lose just that months fee. In the mean time you get to go the movie theatre.
But probably even closer to insolvency. I love it though.
The AMC average ticket price for watching a movie at AMC Theatres in the most recent financial quarter was $9.33. From what we can tell, by definition and absent some other form of other compensation, MoviePass will be losing money on every subscriber seeing two movies or more in a month. [...] In AMC’s view, that price level is unsustainable and only sets up consumers for ultimate disappointment down the road if or when the product can no longer be fulfilled. AMC also believes that promising essentially unlimited first-run movie content at a price below $10 per month over time will not provide sufficient revenue to operate quality theatres nor will it produce enough income to provide film makers with sufficient incentive to make great new movies. Therefore, AMC will not be able to offer discounts to MoviePass in the future, which seems to be among their aims. While AMC is not opposed to subscription programs generally, the one envisioned by MoviePass is not one AMC can embrace.
MoviePass has proven theaters are interesting to more people than I'd have thought in a world of 70"+ TVs and 4K streaming. A smarter Pass could experiment with non-peak times, second release movies, and concessions.
Average ticket price really isn't the best metric with the fixed costs of a theater.
If Movie Pass fails it still helps set an unrealistic price for the cinemas who won't be able to match it. It may drive even more people away from cinemas who no longer wish to pay full price.
As a MoviePass customer I buy more concessions since my budget isn't blown on the ticket.
MoviePass would make sense if the major theater chains did it and focused on slow days. If the lights are one, movie playing and theater staff has to be on site, adding additional users would cost next to nothing. Add popcorn and soda purchases and they'd make out like bandits.