One of my co worker got an email, saying that they're beta testing a feature, where they need to upload the receipts or else their account will be cancelled. This is such a bad business model. Can anyone else confirm this.
This should be make for a good case study for business schools some day. MoviePass was billed as using the gym membership model because it relied on paying customers who don't use the service. However they totally ignored what makes the gym membership model work.
It isn't that people are just too lazy to cancel a product they don't use. People feel an obligation to have a gym membership and many of those people don't use it because they simply don't enjoy working out. Canceling a gym membership is admitting failure in achieving a goal to work out. There is therefore a huge emotional investment in maintaining a gym membership. That pressure doesn't exist for MoviePass. Almost no one feels pressure to go to the movies so you don't get people signing up for the service out of obligation. And everyone who signs up enjoys going to the theater at some level so low usage members are hard to come by.
Meanwhile the marginal cost of an extra customer in the gym membership model decreases at scale. Adding a single heavy user that works out 10+ hours a week isn't really going to alter a gym's bottom line. This isn't the case for MoviePass. Each ticket costs the company the same amount. If you get one heavy user that buys a ticket everyday, MoviePass might need as many as 25 paying customers who barely use the service. It just doesn't scale.
> MoviePass was billed as using the gym membership model
This was never their business model. MP doesn't win if customers pay $9.95 but sometimes forget to go to the movies.
MP wins when they get revshare deals with theaters.
Naturally theaters don't want to share, so MP is buying negotiating leverage with free movie tickets.
MP is trying to get 20 million movie patrons hooked on an all-you-can-eat model so MP becomes the source of a large percentage of traffic. Then MP can threaten to shut off the tap if they don't get a cut.
Theater chains are betting that MP burns through their cash before they get big enough to make that threat.
What you are describing was their hope for the future business model, but it never materialized for a variety of reasons. The biggest being they were trying to brute force their way into making themselves a middleman in an industry without generating any value in that industry. All the extra value that theaters saw was not created by increased demand from consumers, it was simply paid for by MoviePass's investors. Like you said, the theaters are just betting they can wait that out. Maybe MoviePass thought it could be a middleman similar to Netflix or Spotify, but neither of those companies had to pay full retail cost for everything a customer watched/listened to.
> MoviePass was billed as using the gym membership model because it relied on paying customers who don't use the service.
No, it's more like Groupon. Theater attendance is at an all time low thanks to Netflix.[1] This is a way to sell seats through a discount channel -- or at least, that's the model they are trying to sell to theaters. Groupon and all those deal sites were successful in response to the 2008 recession when retailers & restaurants were suddenly left with a lot of excess inventory and seats to fill.
That's happening in theaters now. Netflix is the theater recession.
I'm not sure this announcement means that MoviePass is in trouble... yet. But like all those deal sites, it's a limited opportunity. Theaters will downsize and there will be less excess inventory. More immediately, there's a lot more consolidation in the theater world than in the general retail/restaurant landscape, so less need for a 3rd party discount channel.
>Meanwhile the marginal cost of an extra customer in the gym membership model decreases at scale. [...] This isn't the case for MoviePass. Each ticket costs the company the same amount.
I think it's reasonable to say that MoviePass's expenses don't scale as well as a gym's, but I bet they scale to some extent. Customers who want to see movies frequently were probably the first to sign up, while those who only go occasionally have less to gain by signing up and might wait longer or be more hesitant to do so. So their marginal customer probably has a lower usage rate than their overall customer base.
Ostensibly they're going to profit in the long run by selling data on the usage of their service, not on the service itself. I'm skeptical that this will pan out, but it's not completely implausible. The film industry is huge, it faces high fixed costs and low marginal costs, and I suspect that effective marketing can have a substantial impact on consumers' likelihood to see particular films. Data-driven marketing is likely to be highly profitable under those conditions, whether it's implemented by MoviePass, a different third party, or the studios themselves.
I think the real question is: should they have shut down in Summer 2017 when it was clear the $50/mo model didn't work, or should they have tried this. (If they knew of a better business alternative, they would have done that.)
I think that depends on which specifics of their business model you are considering. I don’t think the broad business model of an unlimited cinema subscription service is inherently a bad business model.
This is interesting, I guess they're closing the current loophole where they can't actually determine which movie you're seeing from the debit charge. Currently, if you get blocked from seeing a movie that you've already seen, just pick another one and "check in" and the money gets loaded and just buy the ticket for whatever movie you actually want to see. Adding the receipt verification makes this much harder to pull off.
Couldn't someone just buy a ticket for another movie at the same time? It's not like the cineplex is going to suspect you're doing anything wrong if you walk up, get your ticket torn, and then walk into the wrong theater. They got paid either way, and if you leave after just watching the one movie, they're no worse off. Not that I'm suggesting doing this, but it seems like a trivial workaround.
I considered that also. But if you’re not going at busy times (which I understand is the case for many movie pass customers, since you can’t reserve in advance conveniently), then seating and capacity wouldn’t be as much of an issue.
Can this still be done? I can check-in to whatever random movie, but walk up to the counter and ask to pay for a ticket to something else? I haven't received any emails asking for my receipt to be photographed. Unless they have some way of tracking the movie title on a debit charge (which my own Visa debit card doesn't even do) then you can just load a ticket for whatever movie and then request tickets from the actual employee to the movie you want to re-watch.
Customers have cell phones, and the receipts are the size of the tickets themselves at most theaters (since they use the same printers). You literally just have to bust your phone out and take a picture.
You see it all the time in the insurance business -- when you make a claim many times insurance companies verify it. Yet insurance is still a good business.
Sure, it's a nuisance, but ipso facto a bad business?
Shockingly, their terrible business model allowed them to grow quickly as long as they could lose prodigious amounts of money. They're facing competition now from the theater chains (Cinemark, who runs my nearest theater, has a discounted movie pass club that's not nearly as good a deal but is actually a viable business) and it looks like they can no longer afford to lose as much money. They're doomed.
Honestly, this was my assumption when I signed up for the service. People like me will keep them in business longer than they ought to be (because new people signing up delays their financial failure). But I'm almost at break even after just 1.5 months. As long as they last through June, which I expect they will, I'll have saved money on (mostly) movies I'd have gone to see anyways.
They recently switched their pay model to upfront quarterly, which gives them an influx of cash short term. Not a good sign for long term but it will keep them afloat and allow everyone to burn VC money for a bit longer. In their minds, I'm guessing that as long as they grow exponentially or close to, they will eventually have the leverage over theatres they need to get a cut of concessions.
Jukely still lets you see a concert every day, but there are so many hidden restrictions now that the service is practically unusable.
You can pay by the month, but certain shows force you into a three-month contract. You can pay for a +1, but some shows don't let you claim more than a single ticket (a dealbreaker for me, since I share the service with my wife).
And the quality of the shows has gone down the toilet. I was seeing some big names when the service was new, but now I just get crappy artists that can barely fill half a venue. Of course, all of the sought-after artists have the aforementioned restrictions.
This kind of subscription service seems always doomed to fail.
Never heard of them before. From the looks of it (being as they mention saying you're on a guest list) they're acting like a promoter and using their block of tickets for subscribers. That's an interesting way to go about it (if thats what they're doing).
kinda crappy business model... but kudos to them for being transparent about it, i guess?
also, there really hasn't been more than 1 good new movie per month on average lately. mostly it's just kids movies and superhero stuff. i'd say i'm breaking even on it.
This is on top of only allowing new users to watch four movies per month.
Cinemark has a 8.99 a month plan where you get one movie credit per month, and they roll over the credit if you don't use it. That's starting to sound like a far better offer.
That is sort of hilarious. I still don't understand how you grow a business which currently consists of taking money from venture capitalists and giving it to people so they can go to the movies. The VC's would get more mileage out of it if they just rented a showing of a movie every day and offered it free to whomever wanted to do if they wouldn't mind sitting through a 30 minute pitch that would feature one of their portfolio companies. And they locked the doors so you couldn't skip the pitch.
At least that way they could be helping to mitigate the customer acquisition cost of their portfolio companies with no reduction in the efficiency of movie pass (actually better efficiency since they wouldn't have to pay any moviepass employees!)
Makes me wonder if the small subset of people who would regularly watch the same movie multiple times in a theater are: (1) movie buffs, highly likely to see a movie even if it can't be the same, and
(2) high concession spenders?
If it's not sold out, seems a bit like licensing already built software: (if it's going unused and doesn't cost to on-board new users or otherwise affect higher paying customers, might as well get butts in the seats)
In my experience people who have access to a theater during their daily work/chores/gym-run/etc. will buy tons of tickets using their account to help get groups in to a movie.
I saw black panther for free thanks to my friend getting like 8 tickets for 6 of us. He had so many tickets he didn't even know where all of them were or how many he had so we found another couple in his car a few days later.
Movie pass just puts on the money on the card, but they're unaware of what you're actually buying with that. You can buy the same movie for a date in the future over multiple days. I'm sure many will try to do the same using up movies they don't care about.
Is moviepass able to restrict who charges to the card? When I read about how their preloaded charge card system works, it made me wonder if someone with a square reader could just create a business with the word theaters in their name and charge the value of the ticket while in the theater lobby.
To get the funds loaded on the prepaid debit card you must check in to the movie on your phone, with GPS turned on, and within 100 feet of the theater, and purchase the ticket within 30 minutes of check-in.
And you're restricted from using one account on multiple phones.
Thats why they're requiring ticket stub photos now. I imagine they also have some auditing tricks to find people using the card at non approved locations based on transaction history.
Perhaps MoviePass can make a case to studios or theater chains directly that giving a break to their higher-volume customers might help drive more business overall...
That was definitely their plan, (1) burn cash to get enough customers (2) use leverage of large customer base to get deal for lower cost tickets from theaters (3) finally make a profit. A problem is that to really leverage their customers for step (2) they'd have to believably threaten to block their subscribers from using that theater which will also cause some people to leave. In the mean time theaters would only decrease their take by giving them the deal. Not terribly surprised the theaters aren't enthusiastic about the whole company.
They are making that case now. If they can get discount ticket prices and stop people from abusing the service (like the guy in a post here whose friend buys and gives away tickets) then they might be able to break even.
The “one movie a day” thing becomes moot though after this change. Since there will really be no more than 3-5 new movies a month anyways (outside of big cities at least where you might get indie and foreign films).
Theaters can cut them in because movie pass puts butts in seats. And theaters make the vast majority of their income from concessions and not ticket sales. Most of the ticket revenue goes back to the studios.
Right, but how much money do you think it costs to add a MoviePass-like feature to their ticketing system and their phone apps, compared to paying MoviePass a cut? If it really is a revenue-driving system, they can just implement it themselves. Or if they want to do it cross-chain, I bet you Fandango could implement such a functionality pretty easily. The part about developing a service like this that costs money is eating the loss on tickets, not the software engineering. MoviePass isn't a value add to this process. It's like Groupon, which quickly established a market but they had no "stickiness" for consumers and they've been swirling the drain ever since.
I imagine theaters are reticent to turn encourage people to get on a service that is essentially putting themselves between them and their customers.
If they give discounts and support moviepass, then moviepass could eventually wield enough power to force discounts on theaters or else the theater will get blacklisted.
Frequent movie viewers talk to, or attend with friends who might not have otherwise gone? You would want to collect attendance data in comparable areas w/ and w/o and have varying degrees of Movie Pass users to validate the effect.
No one is forcing you to think critically about anything in the world or read critical comments from others. Stop using this website?
(You can just copy and paste your comment for every complaint about any business ever other than true monopolies for truly essential things; you'll never have to discuss and consider any concerns ever again.)
I hadn't even heard of MoviePass until seeing this posting at HN. I don't watch movies, and MoviePass sounds ridiculous.
I was critiquing your comment because it had no substance and seemed anti-intellectual. It actually sounded like what you see people write to defend bull-crap like MoviePass, as in "Don't like Facebook's terrible actions? You don't have to use it…" used as an argument against people complaining (as opposed to an argument that people should leave Facebook because the complaints are legitimate).
Maybe it was just a misunderstanding. Seems you didn't do a good job of making your initial point, and I replied to the words I read.
