
Did MoviePass Just Die? Ticket Service Outage Again at Major Chains - jger15
https://deadline.com/2018/07/moviepass-manic-monday-ticket-service-outage-again-at-major-chains-1202436719/
======
everdev
Curious why movie chains themselves don't sell "season passes", like almost
every other entertainment venue. Sure, it might be much more expensive than
MoviePass in order to stay profitable, but I haven't seen any movie theater
near me attempt something like this.

~~~
jonknee
Probably because they have high marginal costs (a _lot_ of the ticket price
goes to the studios). It would be like a music venue selling you a
subscription, but then has to pay the band most of the subscription price if
you show up once. I guess it's possible, but there is a reason why your local
venue doesn't offer a subscription.

To be successful at this you'd need buy in from the studios and that will be a
tough nut to crack.

What entertainment venues were you thinking about that offer subscriptions?

------
KenanSulayman
Fun fact: in Germany you can get cinema (flatrate!) subscriptions ranging from
EUR 226 per year ($264) [1] to EUR 399 per year [2].

While I understand that $10 per month is far too low to cover the costs, it is
beyond me how expensive US cinemas are. I paid ~$19 for a cheaper spot in a 2D
movie and a small drink at an Oakland cinema. In Berlin that gets you a 3D
extra-length movie (3h+), a lot of popcorn and a big drink.

There's even a cinema where you have someone going around bringing you stuff,
a footstool and guaranteed space around you for EUR 10 ($11) per ticket -- it
even includes a glass of sparkling wine. [3]

[1] Independent cinema chain in Berlin: [https://www.yorck.de/shop/das-
kinoabo-unsere-jahreskarte](https://www.yorck.de/shop/das-kinoabo-unsere-
jahreskarte)

[2] Bigger cinema chain; includes 2D and 3D movies:
[https://www.cinemaxx.de/zeitkarten](https://www.cinemaxx.de/zeitkarten)

[3] "Premium cinema" in Berlin: [https://berlin.astor-filmlounge.de/astor-
film-lounge.html](https://berlin.astor-filmlounge.de/astor-film-lounge.html)

------
ironjunkie
Their goal was never to be profitable on paper, but acquire a ton of users and
use them as bargaining powers for big theaters. It never worked though, as AMC
and the others understood pretty well that the best way to deal with them is
to ignore them and let them die which would eventually happen.

It is a shame, because there is a real issue in the US with movie theaters
that are mostly empty due to Netflix and other "At Home" offerings. The
marginal cost of someone going to a movie is zero, so there is definitely some
business there.

~~~
jonknee
> It is a shame, because there is a real issue in the US with movie theaters
> that are mostly empty due to Netflix and other "At Home" offerings

Theaters are just about as busy as they have ever been and are at revenue
highs. It's nothing like what happened to CD sales after digital took over.

~~~
ironjunkie
It might be. My personal experience though is that whenever I go (usually peak
time on weekdays), it is 98% empty (only the typical couple central seat being
used).

The movie is going to be projected with or without more people. Even selling
the seat for 0.5$ generate some money for the theater, and probably even more
given what the average user spends at the concessions. I'm oversimplifying
since the Producers of the movie request X$ per ticket, but you get the idea.

MoviePass managed this badly, but there is definitely an opportunity here.

------
jonknee
The split adjusted 52-week high for HMNY (parent company) is $9,714.37 and it
closed today at $.80... That is impressive!

~~~
ironjunkie
I cannot imagine how bad whoever decided at HMNY to invest in MoviePass is
feeling right now.

~~~
cjhopman
MoviePass' huge losses only began after HMNY bought them and reduced the
membership price by 80%. Feel bad for whoever made that decision (likely the
same person, though).

------
bhouston
MoviePass is an awesome out of the box idea that everyone was too scared to
try.

But unfortunately MoviePass doesn't have a sustainable cost structure because
it hasn't partenered effectively with movie studios or theatres.

So MoviePass will clear die a quick death very soon but hopefully someone with
better business acumen will get the cost structure right and then this will
take off.

I think the trick will be that successful MoviePass-like offering would give
you non-desirable seats or give let you watch on non-prime days unless you
paid extra to make up for the difference. Then it would be helping to monetize
spare capacity rather than taking away money crowding filling premium seats
with lower revenue customers.

~~~
valuearb
It's hard to call an idea "awesome" if it involves giving away money to
strangers without any chance to recoup it.

I considered getting a MovePass membership, but it was so clear that there was
no economic way they could ever sustain their business, and I'd probably get
stuck holding the bag after they charged my card.

To work Moviepass would need massive discounts from the chains, and ion
reality they got exactly zero discounts. The main people attracted to it's
business model were hard core movie watchers would were guaranteed to use the
service a lot. If their average member saw more than one movie a month they
lost money on that member. If they saw three movies a month, MoviePass is
losing like $20 a month per member.

And that's just on cost of services. It doesn't count marking costs, sales
costs, operations, etc. Even if their members only watched a single movie a
month, MoviePass would still lose gobs of money.

And the idea they could switch to offering non-prime seating or times is also
dubious. Let's assume they can get consumers to pay $10 a month for the "non-
prime" offering, those consumers only watch two movies a month, and that movie
theaters agree to discount those "non-prime" tickets by 50%, or an average of
$4.50 each. Now MoviePass would have $1 per customer per month in positive net
margin (10%), but there is no way they can pay for all sales, marketing, and
operations costs out of that, and build a profitable business to boot.

Think of it this way, going non-prime means their product just got way worse,
so how are they going to get customers? Right now their product is a great
deal and sells itself, but the cost of acquiring new users for the non-prime
product is going to be a lot more than $1 each. It will probably cost 1-2
years to earn back the cost of acquisition for each customer. Will the average
subscription even last over a year?

Warren Buffett has a great saying about businesses. Go find a business that's
so easy an idiot can run it, because sooner or later an idiot will. In the
case of MoviePass it was, go build a business so hard the best CEO in the
world couldn't run it, and only idiots will run and fund it.

