
People Loved MoviePass Nearly to Death - pat2man
https://www.bloomberg.com/news/features/2018-05-16/with-vultures-circling-moviepass-still-believes-in-a-happy-ending
======
aresant
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.

~~~
wyattpeak
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.

~~~
smacktoward
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.

~~~
JumpCrisscross
> _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."

[https://www.wsj.com/articles/wework-the-workspace-giant-
want...](https://www.wsj.com/articles/wework-the-workspace-giant-wants-to-be-
its-own-landlord-using-other-investors-money-1526212801)

~~~
geofft
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?

~~~
pavs
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.

~~~
geofft
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).

------
arbie
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.

~~~
arrrg
Would you consider $30/month to be a lot?

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?

~~~
fyfy18
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.

~~~
solarkraft
This certainly seems like a way for cinemas to drive up utilization.

If my local Cinema (incidentally Cineworld) offered it I would seriously
consider going there more often.

~~~
angle_eyes
Is this not the same thing?

[https://www.cineworld.co.uk/unlimited](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.

~~~
solarkraft
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](https://cineworld-
luenen.de/kino/tree/node4217/city280)

------
ErikAugust
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!”

~~~
wellboy
Yeah and then you can simply change the movie pass feature and add some other
type of subscription model and sell stuff to your user base.

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.

------
john_moscow
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?

------
Animats
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.

------
ggg9990
Pricing can turn a good business into a dumb idea that doesn’t really deserve
to exist. MoviePass in one direction, Juicero in the other.

~~~
microdrum
Bird and Lime, too.

~~~
zhoujianfu
What’s dumb about their pricing? As far as I know the $1 plus 15c/min is
profitable for them and yet not discouraging users?

~~~
hndamien
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.

~~~
zhoujianfu
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.

~~~
hndamien
I see a place for both, like you say, but I think this might make it harder to
be financially viable.

------
gwbas1c
The CEO is betting that people will sign up and forget they have a
subscription.

No business survives when its runs on their customers stupidity.

~~~
cheriot
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.

~~~
gambiting
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.

~~~
lagadu
> plus actually going to a gym is not fun

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.

~~~
astura
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.

~~~
mrep
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.

~~~
astura
Yes, of course I have. Weight lifting certainly falls under both "traditional
workouts" and "everything you could possibly think of."

I can certainly appreciate some people get enjoyment out of physical activity,
but just the same, some people find it miserable.

------
franciscop
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.

~~~
ryanjshaw
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?

~~~
ghaff
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.

------
Teknoman117
If anything, it should show movie theaters that if they dropped their own
prices, more people would go to the movies...

~~~
actionscripted
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.

~~~
nol13
"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

------
iambateman
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.

------
WaltPurvis
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.

~~~
Teknoman117
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.

------
Camillo
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?

~~~
degenerate
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.

~~~
illnewsthat
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.

~~~
jack9
[https://www.reddit.com/r/moviepass/comments/7qa8t5/moviepass...](https://www.reddit.com/r/moviepass/comments/7qa8t5/moviepass_faqs/)

~~~
rwmj
> _For ticket verifications, if an unreadable stub is uploaded; you get one
> free pass. Upon the 2nd unreadable stub, your account will be terminated._

So there you are, a simple way to terminate your own account :-)

~~~
degenerate
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.

------
cm2187
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?

~~~
eaenki
data alone is kinda worthless. time + granular data is valuable.

------
mherdeg
Oh wow, I had been watching what happened to NASDAQ: HMNY in summer 2017, but
I had not kept paying attention since then. Yikes.

------
maym86
Why do cinemas not like it? They get paid for each ticket and people go more
frequently.

~~~
tristanj
AMC spells it out in a press release.
[http://investor.amctheatres.com/file/Index?KeyFile=389925821](http://investor.amctheatres.com/file/Index?KeyFile=389925821)

 _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._

~~~
cheriot
> 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.

~~~
pertymcpert
It's also a way to get out of the house with your SO if you both like movies.

------
ddtaylor
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.

------
fredsted
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.

~~~
mcintyre1994
This might lead to cinemas making their staff care about people bringing in
their own snacks though, which would suck.

------
onetimemanytime
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.

------
matte_black
“Nearly”? I’m pretty sure MoviePass is toast, just a matter of time before
it’s gone. Enjoy while you can!

------
floatingatoll
“How Bloomberg Blamed 2M People for MoviePass Permitting 2M Signups It
Couldn’t Afford”

------
skizm
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.

------
nunez
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?

~~~
tehlike
And most theaters make up the money from the beverages and popcorn.

