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MoviePass couldn’t afford to pay for movie tickets on Thursday (cnn.com)
269 points by gbear605 6 months ago | hide | past | web | favorite | 270 comments



If I am a traditional 'tech' company - I can afford to lose money when I am investing it in my platform or technology. It's like borrowing money to invest in your assets.

For MoviePass, they are losing money and passing it off to theaters - it's like borrowing money to buy more ingredients for a failing restaurant. You can't charge less than the marginal cost, it doesn't make sense!

I am trying to wrap my head around what MoviePass is trying to do - especially given the number of friends I have who say they would easily be willing to pay 2x or 3x for the service. The data they are gathering cannot be more valuable than the cost of a movie ticket.

I have to imagine they were making a play at building up a huge enough audience to strongarm theaters into lowering their rates. Well the joke is on them - everyone knows that they have no bargaining power. Plus, signing up was so hard, their audience is skewed towards power users and people persistent in their cheapness.

An emergency loan with no change to the service whatsoever? They are really having a deer in the headlights moment.


>You can't charge less than the marginal cost, it doesn't make sense!

The old joke is "Sure we have marginal losses, but we'll make up for it with volume!"


How do you make money doing this? The answer is simple: volume.

https://www.nbc.com/saturday-night-live/video/first-citiwide...


I assumed their plan was to have such great volume that they'd eventually be able to negotiate (larger?) bulk discounts with theater chains and thereby get their marginal profit back above zero.


Agreed. Somehow, they need to get the theaters and/or the studios to share in their model.

If they can demonstrate to the theaters that their heavy users are worth a lot more than just a ticket, perhaps high concession sales (through coupon redemption), then maybe the theaters would consider giving them a break on ticket price because they're supplying high-value customers.

Secondly, if they can pump the hell out of new movies so the studios or distributors get an even bigger bump on opening weekend, then the studios might be willing to fully or partially fund those tickets for that publicity (aka "trade spend").


Someone suggested that you could finance a money-losing startup by shorting the stock of its legacy competitors.


I mean the plan seems to be that except the marginal losses are supposed to go down as they reach higher volumes. Attract the heavy movie goers first and lose money on them till you can attract enough light movie goers that will buy this and forget about so you can afford the people seeing more than 2 movies a month. There's other ways to drop that marginal cost like getting deals from theaters on tickets for bringing people in (eg give us a better deal or we'll block our users from your theaters) and sell data.

I don't think this is going to work out but I can see how this would look workable in a model and pitch.


That might have worked before Netflix and Amazon Prime and other online movie services. The light movie goers are all online now. Only the heavy duty die-hards are still going to theaters to see first-run films. I haven't gone to a theater movie in over three years.


> I haven't gone to a theater movie in over three years.

The funny thing about this is that sometimes my wife and I want to go to a movie on a date night but we can't even find something that we actually want to go see. We'll go out for dinner and then instead of going to a movie we'll come home and watch another episode or two of a good TV show. High budget TV serials are so good now that movies can barely compete.


The never ending stream of largest box office takes makes that seem unlikely. Seems there's still a pretty strong desire for blockbusters and kids movies.


Ticket prices keep going up too.


Exactly. Most people aren't stupid enough to sign up for things they won't use.

The subscription model where you assume your customers just forget to unsubscribe will never go anywhere.


> Most people aren't stupid enough to sign up for things they won't use.

That's the gym model, sign up people in January for a yearly gym membership, have 90% of those people not visit past the end of the month.


And gyms often lock you in for a year, so it's not like the people have forgotten about it... they just can't cancel yet.


Right, the old "Let's sell $1 bills for $0.99!" Make up the loss with volume! =)


An emergency loan with no change to the service whatsoever? They are really having a deer in the headlights moment.

Reminds me of a startup I worked with once.

The goal wasn't to make a viable product. It was to make a big splash and get bought.

  10 Start a product/service
  20 Make a big hype and get lots of publicity
  30 Get bought by some larger company that sees you as a threat/opportunity
  40 Founders get big cash payout, everyone else gets the shaft
  50 GOTO 10


This unfortunately is probably the untold goal of 80% of startups around the Bay area that have unsustainable business models.

What I find ethically borderline is that no founders will admit this, they will all pretend their goal is to make it a super successful sustainable company.

As you said, the issue is that founders will usually get a moderate payout (a couple Million$), while even early employees will get almost nothing.


It is slimy, and I had to learn that the hard way. There is a lot of sleaze in our industry.

But as someone who has spent his entire career working startups, and just a human who has seen other scams before, I think the cliche about not being able to con an honest person is fairly true. If you buy the hype that you'll make an unreasonable amount of money in a short period of time, well, buyer beware.


>As you said, the issue is that founders will usually get a moderate payout (a couple Million$), while even early employees will get almost nothing.

How is that an issue? To quote Robert T. Kiyosaki's book "Rich Dad's Cashflow Quadrant: Rich Dad's Guide to Financial Freedom": "Your boss' job is not to make you rich. Your boss' job is to make sure you get your paycheck. It's your job to become rich if you want to."


The problem isn't necessarily one of ethics, it's that employees aren't able to appropriately assess a companies business strategy.

1. What is your monetization strategy?

2. What is your plan for profitability?


Exactly, also asymmetrical decision power and non-aligned incentives.

If you are a founder and you get a proposal for a 10M$ acquisition, you know you will make something around 2-3M$, which is not too bad.

The employee however will make a small 100k if he owns 1% after dilution, which is usually not the case. This is after many years of hardwork, probably taking a paycut of at least 100k$ per year compared to a big company.


Honestly, as an employee, I don’t care. I won’t be persuaded to take a lower than market salary for the promise of equity. If the company does well and I make some money off of my equity, it’s s bonus. If not, I call my list of recruiters and have another job in 2 weeks to a month. I’m no special snowflake, good developers who keep their skill set current can easily get a job. I’m nowhere near the west coast but it’s been the case for me for 20 years.

My criteria for a job is the technology stack, the environment, and the money.


I have to 100% disagree about your assessment of ethics. If you're hiding things from your employees so you can get your bailout and shaft everyone else, how is that ethical?


You're statement has an underlying assumption that founders are hiding things from employees.

As stated above, I think its that employees aren't asking the right questions.

It's like when purchasing a vehicle; it's up to the buyer to educate themselves. Savvy buyers get better deals. We'd like to think of our industry as a meritocracy; but it's still largely based on humans with monkey brains,and greed is a powerful incentive.


You'd better believe they are absolutely hiding things. Dont believe me? Go into the CEO's office and ask about the financials, and see what they do.


Who are we talking about here--founding employees who are presumably taking lower than market salaries for more equity, or someone else?

I asked our CEO to give us an update on our runway, and he told me. I guess he could be lying, but I don't see what purpose that would serve.

At my previous company, the CFO was invited to our semi annual engineering meetings, and he'd give us the last quarterly numbers, along with a lengthy Q&A.

At the startup I co-founded before that, the CEO/co-founder was very transparent about our financials and gave me all the time I required to understand the impacts of the business decisions he was making.

Before that, at INRIX, at least once a month during our weekly all-hands, we'd get our financials detailed to us.

Being a founder requires optics, progressive disclosure, and getting creative with the representation of data, but in my experience, I've yet to be in a situation where I felt I was lied to, or purposefully misled.


I actually worked for a startup and during its last days, they had weekly meetings telling us the status. We all knew the end was coming. After we all got laid off, we took our severance, and everyone had a job in two or three weeks.


If you receive options and exercise at least some of them then you'll become an actual shareholder with rights to see certain parts of the financials.


The only possibly unethical thing here is if equity was used as a carrot when hiring you. Other than that- do you like the job? Are you happy with the pay?


What if founders were personally liable for losses?


I find it non acceptable that founders get out of LowBall acquisitions with a couple Million$ , while early employees that worked almost as much, will in the best case get out with 100k$, in the worst case nothing (depending on the shares classes)


On the ethical side, I fully agree, however that‘s not how things work. Investors are insured through liquidation preferences. If shit hits the fan, it‘s very probable that they will get at least their money back with a firesale or an aquihire. For all of these variants of an ordered shutdown, you‘ll need some coherency though. Nobody will buy a sinking ship with 90% of the crew already gone.

Im cases like these, founders are in a strong position, even if on paper, their shares would be worth zero. So for their service to stay on deck until the last moment and let the band play (in order to save some investor money), they are usually generously paid from the remains — the term you‘re looking for is carveout.

Punishing founders will make the investors look bad and cost big money, so both sides collude at the cost of the employees.


Unfortunately, I know of a startup that did exactly this and made out like a bandit.

An acquaintance of mine started some Java/Web startup when the web and Java were just taking off (1998? 1999?). He made a lot of noise. Then he hired a top B-school alumnus to specifically get his company bought out, and promised him a large chunk (30%? I don't remember) of the company if it went for more than $X million. Well, lo and behold, the B-school guy found a sucker and the company sold for close to $50M. This guy retired right away, and now cruises around as an "angel investor".


This is likely all too common.

After all, who's in a better position to know when someone's trying to sucker an investor?


There is a funny south park episode that goes over this: https://www.marketwatch.com/story/what-south-park-can-teach-...


Yeah, that was a popular pattern in the early 90s. Basically take a EE PhD thesis, dress it up and build some early engineering samples, file a patent application then go to Cisco saying "buy us or we'll make this product".

It worked a little too well.


"A startup I worked with once"?! That's the dominant start-up model.


It's crazy. The data is basically worthless. I honestly don't know if they will survive for more than a few months.

I was just thinking, what could they possibly do to survive as long as possible?

They could introduce incentives to reduce the number of movies people saw a week? Maybe some kind of credit system, where customers built up points towards a premium membership.

They could also start taking the most expensive users of their platform. For whatever reason they could. Ban users sharing accounts. Introduce friction somehow. Get them to reenter their payment info.

The customer data is mostly worthless but it's scary. They could weaponize it. Announce to high use customers that they're going to sell non premium customer data. Might scare off some privacy minded customers.

Strong arm theaters somehow? Send customers to certain theaters and away from others by dangling credits toward premium or some other incentive structure


> They could introduce incentives to reduce the number of movies people saw a week?

Since I joined, they pretty much did this by limiting people from seeing a movie more than once. There just aren't that many movies, and nobody really wants to see every movie that's out.

It's pretty frustrating how they sold me a year-long subscription and then immediately started changing what I bought. I'd rather they used some of this borrowed money to refund the remainder of my year.


> I'd rather they used some of this borrowed money to refund the remainder of my year

Issue a chargeback.


> They could introduce incentives to reduce the number of movies people saw a week? They could also start taking the most expensive users of their platform

They've already done this. Just like unlimited data doesn't really mean unlimited. I guess they need to lower the thresh hold even more and affect more of their customers?


Use some of the funding to start their own theater chains?


Weaponizing customer data like that would literally be illegal in the EU, so doesn't seem like the best plan...

Other ideas might work!


Moviepass is not available in the EU.


true, but I think their point is that if the policy catches on there as popular, what is to prevent the US (or others) from implementing similar laws? Relying on a business model that could reasonably be illegal after the stroke of a pen by a legislator is not a good thing. And legislators are at least putting on the appearance of being concerned about user data after the Facebook/Cambridge Analytica thing would cause one to exercise even more caution.


Regulatory capture, bribes (AKA lobbying), a culture that devalues privacy, a culture that places corporate rights over individual rights, a culture that doesn't like sane limitations on contracts, etc...

So long as Google is an 800B behemoth who invests more than anyone else in lobbying, monetizing customer data (and sucking up massively more data than needed) is going to be legal.


Oh okay, that's alright then /s


Becoming movie payola was the way I thought they would go. They could be an avenue for studio to discount tickets to specific films without some of the problems of traditional couponing. This could either just drive buzz, or could allow studios to goose opening weekend sales by paying MoviePass to push films, as well as reimbursing MoviePass the ticket cost.

Probably not enough to become profitable though.


Didn't moviepass just show they aren't capable of pushing a movie with their big "Gotti" campaign?


The Nerdwriter has a good video (short, just 6 minutes) about it: https://www.youtube.com/watch?v=w876zZZIb10

The gist of it is, they're hoping to grow so big that movie theaters will have no choice but to negotiate with them, to share part of the revenues they bring theaters from people who normally don't come watch movies on a whim anymore.


And the movie theatres just created thier own subscription service. Why should they pay a third party?


Being able to go to a different chain is nice. For example, near home there is Regal theater, but near where everyone hangs out there is an AMC.

I'm considering switching from MoviePass to AMC A-Stubs or whatever it's called, but will lose out on the opportunity to walk to my local theater for a free flick.


The best part about this is that you called them "free flicks". Are they actually? I was under the impression you were paying something for them?


Yeah, I'm definitely going to at least 1 movie each month. So MoviePass was a no-brainer. Walking to the theater and watching The Foreigner felt completely free to me. I would never have seen that in theaters. That night I would have been home alone playing games or watching TV.


If you're paying $10 a month, you normally see 1 movie per month, and you're thinking of the monthly fee as paying for that one movie, any additional movies you see are effectively free.


Offhand, I don't think I actually see 12+ movies a year on average.

In recent years it's mostly been Marvel films + a random other thing that I also happened to be interested in seeing (E.G. Incrediables 2).


My wife and I were exactly the same way. Only the “event” films were worth seeing in the theatre. Most other movies we would see when they fell off of a truck onto my Plex Server.

We have gone to see a lot more movies this month since we had it. If you see two movies a month you break even. If we see one $17.26 IMAX movie we almost break even.

But more importantly, for us. It is a commitment device. There are a lot of times that life gets busy and my wife and I don’t go out. Now we just get out the house once or twice a week and go to a movie. We can even meet for an extended lunch sometimes since my wife had a split shift during the school year. She’s off during the summer.


This is sort of like Amazon's tactic with ebooks and such. Lose until your volume is high, then when you've cornered that particular market, negotiate a workable cost per unit.

I really hope it works out -- but in all sincerity, I don't see why the theaters themselves aren't just copying this for their chains. MoviePass has already demonstrated the market.


I don't see how it makes sense to copy a strategy that loses money when someone else is already following that strategy and going broke due to all the money they're paying you.


The strategy only loses money because they are paying full-retail price for movie tickets.

AMC's A-List (costs $19.99) does not pay $9-$13 per showing a la MoviePass. They pay the same space/personnel costs per seat they always have. Tickets have never been a theater's largest or most desirable source of revenue.


It was my understanding the ticket price basically covered the film licensing cost, the movie theater made basically zero profit of that. They make their profits off concessions. I don’t know if that’s true still or not, but used to be the case.


They've done this in the UK for at least a decade. The two biggest chains each have an unlimited subscription service. They're both £18 though, so a lot more than moviepass


Theaters are copying this for their chains - see Cinemark Movie Club and AMC Stubs A-List.


And to me that means Moviepass has done its job. I subscribed to the annual Moviepass plan, tried to use it last night (which failed, see article), so signed up for the Cinemark Movieclub, which lets me buy tickets online, and days in advance.


I might sign up for the AMC one, or regal.

mostly I like to see movies at Cinerama though. Just way way better.


> I don't see why the theaters themselves aren't just copying this for their chains

They are.


Isn't that kind of rent-seeking?


Not if they are providing a better customer experience along the way as well as drawing new customers to the market. "Rent-seeking" implies a desire to simply extract cash without providing any value to anyone.


But why not increase the membership fee marginally in the meantime to stay afloat? I suspect the vast majority of members would stay.

Also as another user posted below, set a cap on the number of movies you can view per month and offer a premium unlimited membership upsell.


They are starting to do it. One of their new features is charging a few dollars on "hot" show time.


I'd rather just get a ticket to a different movie twice, via moviepass, and just pay to see the "hot" movie normally.

I hate this surge pricing bullshit. It's just scalping and I'd rather lose moviepass entirely than every contribute to that shit.


> You can't charge less than the marginal cost, it doesn't make sense!

It worked for Uber tho. And now they've raised prices in markets where they are established.


Uber has a network effect, so it's naturally monopolistic. Cinema passes have a network effect too (you only want the pass if the cinemas near you have it), but firstly it's much much weaker because you literally only need your local cinema, and secondly that's a network effect that helps the actual cinema, not a random middle man like moviepass.


Uber has a network effect, but it's not exclusive—hence the larger number of drivers driving for both Uber and Lyft. I don't see Uber's position as being very entrenched at this point.


Uber also plans to cut costs significantly in the future w/ autonomous cars. May be a pipe dream, but if they believe in the successful widespread deployment of the technology, that means they just have to stay afloat until then.

MoviePass could start to make their own movies, but that would require a substantial investment and isn't really comparable


Wow that would be something...

what would happen if Universal Pictures stepped in with a subscription model (or whatever Moviepass does) for their movies?


Why build when you can buy?

Universal just has to buy MoviePass. Assuming it has the cash. From what I've read over the last few years, the big Hollywood studios are not cash-rich.


I forgot where I read it, but I though Moviepass's ability to geolocate and push money onto a credit card was considered a good idea and could sold.


Hardly seems like a large barrier. I would think the biggest issue would be finding the card company to partner up with, and then it doesn't sound like a very high barrier.

For theatres it's even easier to offer an unlimited option since they can just have the accounts internally. Studios can partner with theatres, though that seems overly complicated (I went to Mission Impossible last night, so I need a paramount account?)


Uber will not invent SDCs much sooner than the other companies, at which point they will have to cut their own prices too to compete with the other SDC companies. So there would be a very small window for monopoly profits.


Uber offers a real, irreplaceable service though. I can walk out of my apartment and be on the way to my office in an Uber pool in 5 minutes. The cost is basically 2x of the bus ticket I'd need to buy. As far as I know this service was being offered by absolutely nobody before Uber.


Uber has a 30% take rate and zero marginal cost. Wrong example.


If by "worked" you mean "burned through ten billion in cash" then sure, it worked.


True, I think that maybe Uber found the fine line (could be pure luck) between creating enough buzz right before running out of cash (several times) and simply going bankrupt.


That Q1 profit was interesting, but it's nowhere near a trend.

They may need another ten or twenty billion, or maybe infinite billions because their business model is critically flawed.


Except Uber was building a market.

If I start a company that just subsidizes Uber rides I'm never going to make money. Unless Moviepass provides some actual value to theatres, they won't make money. Theatres aren't going to give them discount rates to Star Wars or Avengers 4 because those movies sell out anyway.


Maybe hoping to make their money back when people let their subscriptions idle during the off season for movies...but this is most attractive avid movie goers so I don't see this working. People who don't go to movies all the time likely won't get it.


The problem with this idea is that (at $9.95) someone in my area needs to see one movie in the evening and they're ahead. Two movies, and MoviePass needs them to not see a movie for a full month to almost catchup, and they'd still be behind by $1.50. During the big movie seasons, it's easy to see 2-5 movies in a month. I've only seen 2 movies (since April) that I wouldn't have seen without MoviePass. I've seen 15 movies.

MoviePass has paid $137.00 for me, and I've paid them $89.95 (I bought the annual pass, joke's on me now, but I did get enough in to be better than break even). If I'd done the monthly I'd have spent $38.80 over that same time, they'd be out $100. They'd need me to idle for 10 months to catch up.


you didn't really break even as you said it yourself you would only have paid for two movies out of the 15.

The question is, do you really value the other 13 movies at (70$/13) a piece ? In my case probably not.


Perhaps I worded that poorly. I saw 13 movies I would've seen regardless, and 2 I wouldn't have seen. So I did break even (a bit better than, actually).

I, personally, enjoy going ot the theater, I always have. And in past years have seen at least this many movies (though with an emphasis on catching matinees and discounted options, like two-dollar Tuesday or whatever). Two movies (average) per month is not uncommon going back about 6 years for me, with some years being lower than others depending on the releases.


I've seen 1, maybe 2, movies with moviepass that I otherwise wouldn't have gone to the theatre for.


I think they are about even with me.

Would be behind, but their card wouldn't work last time I went. oh well.


It’s the dumbest thing I’ve ever seen and I’m still bullish on subscription commerce in general. A multi-brand theater pass doesn’t make much sense. Chains are much better off offering their own subscription. I’ve heard theaters pay distributors per ticket sold (not per screening or day) so it doesn’t have the dynamics of a perishable good. I don’t understand who would lend it money or buy its shares at this point.


They are trying to buy customers at a loss, then get so big that they can shake down theaters + their own customers for more money. It didn't work.


Many subscription services start to make money as users start to use the service less and less but are too lazy to cancel the subscription.


I listened to a podcast from the CEO about what their ultimate objective would be. The idea is to at one point have MoviePass be sponsored or paid ( or get a cut) of recommending things aside from the movie experience. For example, you'd get a deal with Uber to get to the theater or a list of great restaurants to try close to the cinema. Package an overall experience. I also think the data collected from movies that people are most interested in seeing would be of great use to publishers ( Box-Office seems to already help satisfy that). Problem is I think their cash burn rate won't allow them to get to that stage soon enough and I can't really see a light at the end of the tunnel for them especially considering AMC has started its own similar experience.


This is a very hand-wavy, Web 1.0-esque monetization model.

Acted-upon, local recommendations aren't worth as much as MoviePass is paying for customer movie tickets.


I was under the impression they were trying to have a big enough block of customers to take to the studios and try to get a percentage. As if their service would have sufficient numbers to sway debuts and over all movie numbers.


> The data they are gathering cannot be more valuable than the cost of a movie ticket.

Yeah, but they think they can get the loss low enough that it becomes feasible to overcome that with data. And it goes beyond just knowing what movies someone is watching.

For example, they know the exact location and time of where people are going to be (the app requires location to work). So MoviePass can use that info to upsell their customers to restaurants/etc around the theater and even transportation there and back. Create packages around this.


If I run a restaurant near a theater, why would I want their data?

I already know the clientele that visits the area, whether that's relatively high-end, working folks on their one-movie-night-escape a week, high school kids on date night, etc.

I can already trivially find show (and run-) times from the theater and plan to stay open later or otherwise staff accordingly.

I can advertise, in the theater even, for not a whole lot of money, and reach the people who saw "movie x". Theaters are happy to take your money for a 30-second spot in between pre-roll movie trivia clips.

If I'm an uber/lyft/taxi driver, the same thing applies -- it's easy to find out when movies are out, so it's easy to be in the area.

I guess I just don't see the value in "exact location and time" (at the theater, shortly before the movie starts) or any other data they can provide.

What am I missing? What use-case is there for that data that makes it worth paying for?


Oh, I didn't mean that they'd sell the data. But that MoviePass would use it themselves to generate more revenue from their users.

Instead of just movie tickets, they'll combine it with other things. Dinner and a movie. Movie then a ride home. Stuff like that. I think their plan is to take commissions.


> You can't charge less than the marginal cost, it doesn't make sense!

You can if you are dumping to achieve a monopoly and/or monopsony where you will then have pricing power on one or the other side of the transaction you are in the middle of.

But that's a game you either win completely before you run out of money or die horribly; there's no glidepath to a sustainable but not dominant position. And MoviePass seems very close to the die horribly outcome.


> it's like borrowing money to buy more ingredients for a failing restaurant.

Well, they're gathering people's information & movie consumption habits as well. I could imagine a similar business losing money on the movie cost but making up for it by exploiting people's data. Not sure how "well" they're doing on that front though.


“...be more valuable than the cost of a movie ticket.”

That’s the gamble right there. You think a movie ticket is worth what the movie theaters is telling you. MoviePass is calling their bluff by undercutting them on their own service if they get enough of the market theaters will have to cut them a deal they can survive on.


But isn't the marginal cost of a movie seat pretty low for the overwhelming majority of showtimes? I think they're banking on eventually becoming a reseller of inventory the chains themselves can't move.


The deer in the headlights moment might be when this outfit decides to pay for movies that people want to see.

I assume HN knows that most Hollywood movies are deliberately made for export to Chinese and Indian audiences.


Not saying it’s a good strategy but amazon seems to have done/is doing something similar. Each purchase is a loss when shipping is taken into account. But if the bleeding is slow enough the created ingress can be enough to shift the landscape so that there are new opportunities. Cultural lockin followed by price increases is a typical one.

Like the hub and spoke model of pizza shops. Basically bet that spoke opportunities will appear if the hub is engaging enough.


Amazon has since stop losing money on shipping. Especially considering all of the money they make on Prime memberships.


Amazon has pretty much always been margin positive even after shipping so not a good comparison.


Amazon's losses to shipping can actually be lowered by improving logistics, alternative delivery systems, and negotiating better contracts because of the massive volume.

Plus I won't believe the "every purchase is a loss" narrative unless I see evidence. Especially recently.


"The data they are gathering cannot be more valuable than the cost of a movie ticket."

When you install the app what does seek to access? Given that most movie theaters are surrounded by food & drink establishments then it would seem they're not too far from becoming a "niche" Groupon. That's got to add some revenue.

Moi? The data is a privacy issue. But I'm a fringe minority. Most ppl see deal and convenience and ignore the risks.


They already do strongarm some smaller theaters into getting a cut of concessions.


What leverage do they have to strongarm? If a theater is popular, that means MoviePass customers like the theater. MoviePass needs the theater more than the theater needs MoviePass. If MoviePass chooses not to pay for tickets at the theater, that’s a MoviePass problem.


It becomes the theater's problem if the customers have alternatives. In my area, they don't. There are 2 theater companies and 3 theaters. But say you're in Atlanta, there are tons of theaters, and often not too far from each other. So the decision to go to theater X or theater Y could easily be determined by which one accepts MoviePass.

Customer's line of thought: I've already paid for this service. It'd be stupid to see a movie without using it, because I'd be double paying (not entirely accurate, but this is the thinking). I can go 2 more miles and see the same movie at a similar time and not have to pay for the ticket. Sold!

The problem for MoviePass is the customers will do that, and MoviePass can't actually afford the tickets (since most of their spending, now, seems to be from borrowed money).


If MoviePass represent let's say 50% of your customer and suddenly they remove your theater from the list, I will bet you will lose about 90% of those MoviePass customers, so you will lose about 45% of your customers.

I have a MoviePass, and when they removed a big AMC theater around my place a couple months ago, I simply drove two more miles to the Century theater. I have zero loyalty to a specific theater//chain, I care a little bit about better seats though.

So yeah, their goal was to get that bargaining power by getting as many users as possible.


MoviePass' problem was that their biggest users were stingy as fuck. They would smuggle in their own snack and drink, instead of purchasing from the movie concessions stands.

This might not have been much of an issue (since MoviePass pays full price for the tickets), but they tried to make a play for all of a theater's concessions revenue rather than just the revenue traceable to MoviePass customers.


It's the GroupOn problem. You're allowing people to self-select for being cheap, wanting deals.

The MoviePass system was probably pitched like a health-club membership with the expectation that nobody would ever use it, or like a streaming service people forgot they were subscribing to, but it seems they've captured a base of enthusiasts taking full advantage of the program.


Or at least selecting for the heavy user/expensive customer. I rarely go to the movies for reasons that have nothing to do with ticket prices. They’d love me as a customer but I’d never sign up.


I agree and that's the issue when you compete and differentiate on price in the low market. The customers that subscribe, will do everything possible to save a couple $s.


I'm not 1000% up on how they tried to do it, but I remember seeing (on HN, I think) that they would see a non-chain theater be popular, and so they would threaten to not list their theater in the app unless they gave them a cut. The commenter said they saw it with 2 theaters, both initially told MoviePass to go pound sand, so they were delisted. One barely noticed, but the other saw a significant decline in patronage, so they had to go back to MoviePass, hat in hand.


Anecdotally 30-50% of Studio Movie Grill (southern chain of dine & drink theaters) patrons are Moviepass subscribers. The food and drinks are their primary profit centers to the point that they often don't even bother with ticket monkeys. If Moviepass interrupts that stream of customers, the theater starts losing out on sellout showings nearly everybody is purchasing a meal and drinks.


They still keep thinking that people will eventually treat it like they do gym memberships - buy them, but ultimately not use them. But there is a certain social expectation to have a gym membership and at least pretend you are doing something about your physical fitness. I have one through work and the last time I've been to that gym was over a year ago. But I can't be bothered to go to HR and actually cancel my account. But going to the gym sucks - and going to the movies does not. There is no reason to not use the movie pass once you have one. I'd be shocked if anything but an absolutely marginal percentage of their users were actually paying more than they were using.


And a critical difference, your gym doesn't lose actual money any time you visit. They may not want everyone to visit all the time, but it doesn't drain their bank account anytime you enter the door.


They lose a little money on equipment maintenance over time, but it's nothing like going to a movie.


I’d imagine even a moderately engaged gym user would lose the gym money on every visit, in staffing costs alone. The marginal cost of each user rises too, as people that are unable to get on machine are more likely to churn. It is however usually outweighed by the huge numbers of people who simply do nothing with their subscription.


> I’d imagine even a moderately engaged gym user would lose the gym money on every visit, in staffing costs alone.

A gym user attending a gym doesn't incur significant additional staffing costs. The work required to clean the gym may increase a bit but that'd be nowhere near the price of even the cheapest gym memberships.

> The marginal cost of each user rises too, as people that are unable to get on machine are more likely to churn.

That's not a cost, it's a factor for the overall churn rate and marginal cost for acquiring a new user. It'd limit the max profitability of a gym (i.e. getting to churn = growth equilibrium) but it's not an operational cost.


>A gym user attending a gym doesn't incur significant additional staffing costs. The work required to clean the gym may increase a bit but that'd be nowhere near the price of even the cheapest gym memberships.

But that's not the right way to gauge "cost per member-usage". If you get a lot more usages, you will have to pay noticeably more for staff, maintenance, replacement, etc.

For comparison, how would you gauge the actual cost of sending a letter in the mail? Naively, you would say "well, you can't detect the cost of sending it in labor or fuel costs, so it's zero".

But that would be wrong. The right way is to say "how much would it cost to send a million more letters? The cost of one letter should be treated as one millionth of that" because, in the large, your marginal costs will scale that way as letter transmission goes up and down.

So yeah, the gym is, for all relevant purposes, bearing a small cost each time you use the gym.[1] It's just that, for the vast majority of members, all those usages cost them much less than the membership fee.

[1] I've heard figures of $1/visit but can't find at the moment.


In my professional experience with gyms, the most expensive thing you can do, is use the treadmills a lot. They are the most expensive machinery, and most prone to breaking down.


I go to the gym and I interact with 1, sometimes 2 staff members. The people at the front who check my card and sometimes the guy who works in the locker room if I can't get mine open.

They are on staff anyways. It costs them nothing extra.

What is true is that they can understaff (and have less equipment) than if they had 100% regular participation.


The gym I went to before was 24/7 and completely unstaffed outside of daytime hours. When the place was unstaffed, a fingerprint reader was used to verify you were the owner of the card.


Careless weight lifters can cause significant damage to a facility. Some users indeed can cost more than their membership. Especially if it causes the gym's landlord to raise the rates, or force an additional damage deposit, on the next lease renewal.


If the rate of patrons went up sinficantly, it would become too crowded and folks would cancel their membership. The


Pretty much. I felt too guilty to cancel my gym membership so I paid for it for many months telling myself I'll go next time. I felt no guilt canceling MoviePass.


A movie ticket doesn't cost that much... If you only go to the movies a few times a year, a subscription is an obvious gimmick.


I disagree....where I am from(UK) the cinema is so incredibly expensive that I pretty much only see movies that I know I will like(big blockbusters) because I cannot risk spending £16 on a ticket and not linking the movie. And yes, you can sometimes buy tickets for £6-7, but that's usually only on specific days and times, which doesn't always work for me. Regular cinema is incredibly expensive.


Gym memberships don't cost the gym more everytime people use them.


First, they tried to strongarm AMC into getting a portion of ticket and concession sales [0]. When AMC said "lol no", MoviePass blocked AMC and tried to pass it off as AMC blocking MoviePass. They then lied about how much money they made AMC [1].

[0] https://deadline.com/2018/01/moviepass-lack-of-amc-theatres-...

[1] https://variety.com/2018/film/news/amc-blasts-moviepass-fals...


And then AMC turned around and did thier own subscription service. Yes it cost more, but it’s sustainable, you don’t have to jump through hoops to use it and I’m really enjoying it.


In the end consumers got a subscription service from a major theatre for a lot less than buying individual tickets, something I doubt would have happened if it weren't for Moviepass.

Competition is good for consumers.


Isn't it dumping though? That's very bad for competition in the long run, lack of which is bad for consumers.


>it’s sustainable

Is it? 3 movies/week for $20/month is about $1.67/ movie.

I think it is just around until movie pass kicks the bucket (at least at that price)


AMC doesn’t show 12 different movies in a month. At most, they probably have a turnover of 5-6 movies per month.

As I said earlier, the price they pay for the studio for each movie a subscriber sees is around $4-$6. They still make a lot of money on high priced concessions.


I looked at an AMC I've been to. They have 20 movies listed as available to see today. Many only have 2 showings or something, but they have 20 screens, they seem to turnover more than 5 or 6 movies in a month.


I didn’t say they only have 5 or 6 movies showings at once. By turnover, I meant after you catch up on all of the movies they have now, you won’t find 20 new movies next month. Over the course of the year, they won’t have 156 movies in the theatre (52 x 3)


191 films were released by the top 10 US studios in 2015. I bet most 24-plexes screened them all, plus more.


https://stephenfollows.com/how-many-films-are-released-each-...

The best I could come up with - 93 wide release movies in 2016.

AMC does restrict the subscription service so it doesn’t cover the Fathom Events movies.


Do they limit you to one viewing per movie?


> AMC doesn’t show 12 different movies in a month

At my local AMC, they currently have 18 movies showing, and pre-sales already running for 10 new movies opening between now and Aug 15th. I think you're either vastly underestimating the number of movies out there, or you haven't been to a theater in a while.


Yeah, but of those how many of those would your average subscription holder want to see? I suspect not that many.

But, I am definitely debating on getting the AMC subscription now that I know it's a thing. $20/mo sounds like it's very worth it.


I would be absolutely shocked if the average movie goer went to the movies 3 times per week, even with the AMC pass.

Anecdotally, I know about 15 people who have MoviePass. One couple I know goes probably in that 2-3 times per week range. Another guy I know, tries to go once on each weekend day (but skips every once in a while). Pretty much everyone else falls into the 0-3 times per month.


Was the entire play of MoviePass to pay for people's movie tickets until they make it and then jack up the prices + negotiate with cinemas for better deals? What was the "make it" condition?

Is this a common strategy?

It also loosely reminds me of the dotcom era strategy. It doesn't matter if we're not making any real money, we have a lot of users. Surely that can be converted into money somehow. We're worth billions of dollars because we have 300 million users!


Is this a common strategy? Are you kidding? The entirety of Silicon Valley is predicated upon and funded by this business model. Almost every service provided by a SV startup is subsidized.


Its subsidized in its R&D cost though. Not in the marginal cost of servers/apis ...

I sometimes joke like our first customer cost us $2M but our 2nd was wildly profitable!


Not in the marginal cost of servers/apis...

Have you ever heard of companies that buy services from other companies under the same VC?


I think of Moviepass as the pets.com of 21st century VC madness. That said, they clearly had a great pitch, I'd love to see their series A pitch deck.


I guess the upside is that they will fail fast!


I'm not sure 7 years and a mostly-acquisition counts as "fast." Quite frankly it's impressive their charade has lasted this long.


They were a lot more expensive until recently though.


Did they have VC?

They are a part of a publicly traded company.


Yeah, they were hoping to sell user data, get partnerships with theaters or even businesses around. They even tried getting deals with specific movies. But yeah the whole SV strategy is disruption. Look at Uber for example.


What do you mean? This is literally B2C Strategy 101. If you even try to build a company that is profitable on day 1 or early in its life it gets labeled as a "Lifestyle Business" and VCs won't get near it.


Ouch. Now that MoviePass subscribers are aware of its impending demise, they're likely to use the service even more to squeeze out any remaining value before it goes kaput, further exacerbating their money woes.


Also known as a "Bank Run".

As soon as people think it is going bad, they go to squeeze their money out, making it even worse.


Classic bank run. I mean, I don't wish anyone ill, but it would be quite amusing to watch it all burn down.


I think the subscription model for theatres makes a lot of sense for all involved. Getting more people to the theatres (where they buy other stuff) and creating larger audiences who didn't previously visit theatres. The pricing and terms of MoviePass are unsustainable, but I think there will be more subscriptions for theatres that are tried.


Agreed. I think their general conceit is that people enjoy the movie-going experience, but they are put off by the price. There is truth to this.

That said, they really botched the strategy - they could have bootstrapped the whole thing and slowly come down in price.


I’m not sure how you could bootstrap this idea. The only way to undercut the theatres is to lose money.


Provide childcare, undercutting babysitters.


24% premium on a loan that will last them until August 1 is insane. I don't think they're going to make it past August or September at this point.


In the UK, 2 of the biggest chains offer subscription passes... Cineworld, which is the one I use, allows me to see any movie at any cineworld (there's a 2 tier system for London, but ignore that for now) at any time for free based on me paying £17 a month. I live in London and the average cost of a ticket is roughly £12, if i see 2 movies a month i'm quids in. It seems insane that moviepass isn't operated already by one of your big chains (AMC? i guess). There's normally at least 2 movies I want to see a month, and even if there's not if i have nothing better to do i'd likely go and see something.


There's an AMC equivalent now, 3 movies a week (in the nice Atmos theaters, too) for $20/mo: https://www.amctheatres.com/amcstubs/alist


Lending $5 million to MoviePass at this point is probably as close as you can get to literally throwing your cash on a burning heap. Must be some term sheet!


Perhaps they are secretly working for major movie theater companies like AMC. The trick is to get more people to go back to movie theaters and then when they can no longer use their movie pass service they will still want to go to the movies.


You could imagine a big theater chain buying MP in a fire sale. If they pay $6M and the lender gets all of it, that's a pretty good deal for the lender.


If MoviePass fails, it's a failure of the Nash equilibrium due to stubbornness and lack of communication. MoviePass drives traffic to movies, benefiting both studios and theaters. Despite the existence of other subscription plans, if MP goes away, the majority of those tickets will never be purchased. MP could certainly have evolved into a sustainable plan, that restricted its users to seeing movies at off-times with low demand, at nearly 100% marginal profit to the theaters, even if those tickets were sold at a significant discount that MP could reasonably afford.

Instead, theaters, especially AMC, refused to negotiate and in doing so, shot themselves in the foot. AMC's subscription plan is especially attractive to high-volume users on which it will likely lose money, further, it encourages them to use their free tickets at peak times for the most popular movies in the most expensive formats. When an AMC subscriber in NYC reserves a seat for a Marvel film in IMAX on opening weekend, that's a $20+ ticket that AMC can't sell to a paying customer because the theater is sold out. AMC's profit margin is already quite thin, and getting worse, according to its financial filings. Its CEO is very full of himself but doesn't seem like much of a strategist.


> MoviePass drives traffic to movies

Does it? Were those people going anyway? Would they go if they had to pay one cent more?

They’re just a middleman aren’t they? How are they driving anything or adding any value?

> that's a $20+ ticket that AMC can't sell to a paying customer

But the subscribers are paying customers aren’t they? Do you mean they can’t sell it to another paying customer? So you’re just saying they can’t sell things twice?


I'm saying that for $20 per month, an AMC A-Lister can easily use $40, $50, $60+ of premium tickets at full opportunity cost. The terms of the A-List program encourage users to reserve the company's most valuable inventory. It would be like an all-you-can fly program... if users were restricted to economy seats on low-volume flights, it might be profitable for the airline. But AMC is encouraging its customers to reserve first-class seats on the busiest routes at the busiest times, displacing other customers who would pay cash for those premium seats.


It is an anecdotal response to your first point, but since you didn't place a threshold I'll say it anyway.

I have two friends who I'd describe as average theatre goers. Maybe a movie every 2 - 3 months. Since using MoviePass they both average about two movies a month during 2018. I am not sure how sustained that behavior will be, but at atleast in this early stage it is lasting.

As for the second point, he is arguing they never sell the ticket once. AMC does not get the money if the subscriber does not attend the film. So by fighting with MoviePass (as they have been), they never sell the ticket once.


So the studio gained audience but (excluding the MoviePass susididy) not any money so what’s the benefit of that? In fact they might be setting an expectation that film tickets should be lower in people’s minds!

If you give me free tickets to the cinema I might go. If you say now I’m in the habit can you charge me $1? No thanks not worth it now.


The benefactee in this scenario is the theater chain, not the studio, as they make most of their real profit from concessions, not selling seats.


Is the thrifty MP user the same one that buys overpriced stuff from concession stands, though? I suspect the old candy in the pocket ahead of time trick would be in use.


Only if the MoviePass customers actually buy concessions. One of their issues with trying to leverage smaller theaters is that MoviePass customers didn't purchase sufficient concessions to justify cutting MoviePass in on any of the theaters' revenue streams.


AMC's subscription plan is especially attractive to high-volume users on which it will likely lose money, further, it encourages them to use their free tickets at peak times for the most popular movies in the most expensive formats. When an AMC subscriber in NYC reserves a seat for a Marvel film in IMAX on opening weekend, that's a $20+ ticket that AMC can't sell to a paying customer because the theater is sold out.

- AMC made a deal with the studios. All movies are accounted for as being purchased for $8.99. AMC then pays the studio 40-60% of that price.

- Thd turnover of AMC movies isn’t that great. I doubt they have more than 8 new movies in a month - even fewer that a person wants to see

- Concessions are a high profit margin product. The average movie goer was already paying around $5.00 in concessions. They will probably pay more now since the movie was “free”.

- the subscription plan is not available for anyone under 18. If you take your kids they pay full price for the movie and concessions.

I can’t find the article now where I saw this. But the $8.9@ per movie price was widely reported.


The WSJ article says that's for standard 2D films. But A-List encourages subscribers to see 3-D, IMAX, Dolby, etc. It also says the studios aren't on board with the $8.99 figure and are seeking changes in AMC's calculations.

https://www.bizjournals.com/losangeles/news/2018/06/25/amc-s... https://www.wsj.com/articles/hollywood-studios-fear-amcs-new...

The studios are not going to sit back and accept just $5 per admission to Black Panther on 3-D IMAX on Saturday night of opening weekend, when that ticket retails for $18-25 (depending on location). Studios usually collect 80-90% of ticket revenue for big movies on opening weekend.


I can’t find the numbers now, but Imax did make some kind of deal with AMC.

https://deadline.com/2018/06/imax-approves-amc-theaters-new-... By “wouldn’t affect the overall economics”, I assume they meant that AMC promised them that the offset in revenue would be made up by the number of people seeing IMAX or they would make up the difference. Not they are paying full cost.


Of course IMAX is on board with AMC's plan. IMAX was one party that was credibly threatened by MoviePass, since MP customers were prevented from purchasing IMAX tickets. MP customers will see Mission Impossible tonight in normal 2D for free, reducing the demand for IMAX.

AMC completely flips the script. Its members can see IMAX films without any premium cost, even on opening weekend. Regular screen, or 3D IMAX for the same cost (both for free)? Of course, let's go see IMAX.

The problem for AMC is that it is now on the hook for paying the IMAX premium. Your article says, vaguely: "the theater chain will ensure there is no reduction in Imax’s overall economics." So it's a no-lose proposition for IMAX but AMC now has to cover the cost of tickets sold to A-Listers.

Here is a link to Regal theaters showing Mission Impossible tonight: https://www.regmovies.com/movies/mission-impossible-fallout/... Notice how nearly every showing says "No Passes"? That's because giving away a free seat to a sold-out show reduces ticket revenue. That's been basic policy at movie theaters for decades. AMC has decided to toss that model out the window.


The best I can infer, is that simplistically the deal will be if they expected to make $X from IMAX based on Y people showing up before the subscription, as long as they make at least $X or slightly more than $X, IMAX will be happy with the decreased cost per ticket.


Except Moviepass is skating by on VC money with only vaporware monetization through data mining, and AMC can afford to wait them out.

Nash equilibrium here is Moviepass dying off regardless of communication/collaboration. Introducing a competing service will only speed that up.


You have any proof to back up this claim? My hunch is that the heaviest movie pass users were already heavy movie goers.


Likely true, but when you drop the consumer's marginal cost to zero, consumption will increase. Even if it was reasonably high to begin with -- i.e. 3x per month to 5, 1x per week to 2-3.


A couple months ago there were optimist articles about how they'll "make it in the long run", having "enough money to keep going before being profitable". Cinemark even announced something similar.

Guess it didn't last THAT long. I'm scared for other services with the same pricing scheme.


I mean, in the case of MoviePass, their pricing was so obviously stupid that people sort of assumed that they MUST have a trick up their sleeve to make it work, because no one could be that dumb.

And it turns out, they don't (or maybe they did but it didn't work). Not everyone is playing 9D chess.


I believe AMC is doing a subscription service where you can see up to 3 movies a week for $20/month.


They also have a service where you can watch any movie on Tuesdays for $5, for $12 a year. I prefer that service, and have renewed for 3 years.


Does this service have a name?


AMC Stubs https://www.amctheatres.com/amcstubs

I've been a subscriber for a few years. They waive online ticketing fees and you get $5 vouchers for every $100 spent (among other perks). It's been worth it for me.


The base model of stubs is free. You still get $5 Tuesdays.


It's eye-opening that there are companies that forgets about cash-flow and profitability...


It's not just that they forget. They are actively encouraged to not think about these things. It's not the startup way, so don't do that. The rules for SV-funded companies are this:

1. Get big no matter what. 2. Play as fast and loose with the rules as you need to in order to accomplish 1. 3. Never think about profitability. Profitability slows growth.

All 3 can be summarized as: Never think about anything that slows growth.


Uber, Spotify...plenty of other examples, I'm sure.


Soundcloud as well. They have something like 175 million users but almost shutdown last year


Cinemark's movie club sounds reasonable though. You get a ticket a month for $9. The tickets accumulate and multiple can be used at once [1].

I've been considering it since every couple months my wife and I like to see a movie.

[1] https://www.cinemark.com/movieclub


They just underwent a 250:1 reverse stock split and the stock is barely 10% of what it was after the split. It's lost over 60% today alone. This company is going bankrupt and quickly.


On what terms would you actually lend MoviePass $5m? It would seem surprising at this point if MoviePass makes it to September.


You would no doubt be surprised. High risk lending is a thing in the Bay Area at least, I attended one of the VC lunches and at my table was a person who did that for a living for hedge fund. Sort of like really really big payday loans, but with worse terms.

He mentioned that one of the most unusual notes they had written was backed by obligations on future projects by the CEO of the company, so if the company folded and the CEO went on to start a new company the hedge fund could convert that defaulted note into a percentage share of the next company. Very creative stuff.


What are the chances the CEO will disclose those terms to prospective employees of his new companies? Near zero?

That's a serious landmine for employees who get part of their comp as stock options.

Edit: edited to reflect what I actually wanted to say (future companies instead of current company)


Absolutely but once you're in the situation where you are securing high risk debt financing you're employees should already reset the future value of their stock to $0. While I don't know if it is a hard and fast rule, it has been true in my experience over the last 30 years in the bay area that when a company is doing this sort of move to survive it has never left any value in the common stock.


I actually meant the employees of future companies of that CEO. Poorly drafted comment on my part.


Yup, it is always a good idea to research the CEO/Founders of a company you are considering joining to see as much of their history as you can. And if you see that they sold their previous company at firesale prices ('or undisclosed amount, not material to the acquiring company') you know that they missed their execution target that time. So a conversation with them is in order.

I have declined a number of offers over the years when my research into the CEO showed they were not the people who could get a company over the finish line, and have generally been pretty accurate in the eventual fate of those companies. Correlation isn't causation, but the CEO is the biggest win/lose variable in the mix.


Why would you disclose it to employees? Do employees receiving stock typically get to review term sheets and ownership schedules before accepting an offer?

I'm sure it would come up in future investors' due diligence but I'm not sure it's information they're required to disclose to employees.


Any employee who wants to value stock (and options) in a private company at more than zero should get that.

They won't give it to you of course, which is why employees should always value illiquid private company stock at zero.


I wasted 20 years at startups chasing stock options. Pre-IPO stock options are stupid. Don't waste your time.


I bet it would be framed as an investment by the bank. Could even look good from a large enough distance.


Generally, collateral - often including stuff owned not by the company, but pledged extra by the owners.

Also e.g. "Proceeds from a planned stock sale must also be used to repay the debt." - so they're betting that the company won't fold until a stock sale and it will manage to sell at least a $5+ million of stock; a reasonable "greater fool" bet can be made here when you earn a tidy profit if someone else pays for the company and lose the money if it turns out that you're the last one in the line and there's no greater fool than you.


A lot of startups has not sound business ideas. Rather they have been fueled by cheap below real market central bank interest rates seeking higher return than zero.

Some startup founders are hustlers.

The children story by hc Andersen about the emperor without clothes. trying to convince he has clothes comes to mind. https://en.m.wikipedia.org/wiki/The_Emperor%27s_New_Clothes

There will be a shake down of real pegususes versus so called unicorns. One magical creature has wings the other does not.

Of course people will be attracted to services selling services below market rate but it is not long term economically sustainable.



From the Promissory note:

> the principal amount of Six Million and Eight Hundred Thousand Dollars ($6,200,000)

Is this a gross mistake? Or am I missing something ?


No, this is what's termed an "Original Issue Discount" in debt parlance and allows for a lender to earn interest without a cash coupon on the loan. Basically they give them $5mm, but the "par value" of the loan is $6.2mm. So MP actually owes $6.2mm, but only got $5mm in cash up front.


I think they were referring to the "eight (2)".


My wife and I are so frustrated by the movie going experience in the US. In Taiwan, everyone is permitted to bring food and drinks to the theater and that's pretty common. In the US I'm forced to pay an absurd amount of money for awful junk food. No thanks, I want to drink tea while I watch a movie. We always have to smuggle in drinks because the theater just doesn't provide any good options.

None of the movies is the US are subtitled. I am a native English speaker, but I really prefer to watch every movie with subtitles. Reading the dialogue while I hear it helps me remember the content of a movie, helps to understand what characters are saying while there are explosions going on in the background, let's me lower the volume for the sake of those around me, and so on.

And then there's the friggin' cell phones... but I suppose this isn't really a US specific problem.


Movie theater food is expensive because theaters in the US make almost all of their profits from the food. The movies are just a vehicle to get you to buy the popcorn and soda. On big blockbuster releases, like Star Wars or Mission Impossible, the movie theater may only get 10% of the gross ticket price on opening weekend, with the remainder going to the distributor.

Overseas distributors Asia have less leverage because these markets are generally so much smaller on a dollar value basis that it's not worth the time and effort to push for 90% instead of 60% of a relatively tiny pot. In China, terms are dictated by the government. In Europe, audiences prefer more avant garde films (read: bad films which pretend to be about something) so theaters have significantly more leverage overage distributors.


>In Europe, audiences prefer more avant garde films (read: bad films which pretend to be about something) so theaters have significantly more leverage overage distributors

Wow, sorry that somebody on earth wants to watch something other than comic book movies


I sometimes fear that, like bookstores and Toys R' Us, if you don't patronize these businesses, they will go away. As a kid I couldn't imagine a world without bookstores, now there aren't any. Same with Toys R' Us. Kids will never have that experience again. Yes, movies are expensive, but would you rather them not be there at all?


In my area, a lot of small, independent book and toy stores have opened up over the past decade or two, and it seems to me like their business has been picking up in the wake of the implosions of Borders and Toys R Us. That works for me, TBH - I have little nostalgia for Toys R Us, but I have very fond memories of the small children's book & toy store my parents used to take me to.

Perhaps the same will happen with theaters? The local AMC cineplex isn't doing much for me; the movies it shows are more-or-less disposable, so I'm just as happy to watch them on a small screen at home while I'm working on a hobby project or whatever. OTOH, an independent theater that I used to live by would show classics, Rocky Horror, limited distribution stuff that's hard to find anywhere, and even old silent films with a live orchestra. Consequently, it felt like an integral part of the community to me.


Here in the UK, we have a chain of toy shops called Smyths that's been expanding as Toys R' Us was failing, and they just seem like so much nicer an experience that frankly it feels like good riddance. I believe they've also expanded to continental Europe by buying out some of the old Toys R Us stores.


Indeed, when the home video/DVD usage was at its peak around the '90s, movie theaters were assumed to be a dying business by most people. Then consolidation and marketing to a younger generation breathed new life into the industry, with ticket prices going up alongside.


I wonder if the proliferation of high definition and TVs with screens 2 or 3 times the size of TVs in the 90's for the same price will make a difference this time around. Back then, theaters were still the best way to see a new movie. Now though, I know a few people who's living rooms are far superior to a movie theater in every way, from the screen, to the sound, to the seats and honestly company and environment. Going to a theater used to be worth it even if the movie wasn't very good, just to get to see a movie on something different than a tiny 20" crt TV. Now it's really only worth it for great movies.


I would rather be able to watch them in my own home and get some takeout.


The first two weeks of a movie's run the theatre is only making 10% of the ticket sales. Then it slowly goes up until its cheap enough to show in a dollar theatre. If its a blockbuster the increase might not start until 4 or even 6 weeks later.


> audiences prefer more avant garde films (read: bad films which pretend to be about something)

Yikes.


That's fine, movie theaters can sell food for whatever price they want. My problem was that movie theaters don't sell anything we want to eat! candy and soda? No thanks!


Over the last 20 years I often have food and / or drinks in my hands when I walk in. No 16 year old ticket taker is ever going to make a fuss about it, because they certainly don't care. It is odd how deeply rooted in everyone's mind it is that there will be a huge scene if you try and sneak in food.


Most American movie theaters allow outside food/drink, so long as it doesn't give off a noticeable odor and isn't alcoholic. The myth about needing to sneak in your food is just that—a myth.


Probably a regional thing. Every NYC-metro movie cinema I've been to check your bag before you enter, and I've seen them actively stop people from bringing in outside food and drink before.


I wouldn't say it's a myth. It's been a while but I recall being in a theater (San Luis Obispo, CA) and witnessing a manager ask a person to throw away his smuggled snacks or leave the theater. He declined to do both and the police arrived and escorted him out.


I know Harkins (a southwest chain) allows outside food so long as it is non-disruptive, non-alcoholic, and they do not sell it. You can't bring your own popcorn or M&Ms or soda, but if you wanted to bring in tea or a coffee from one of the Starbucks in the strip mall or even McDonald's, they're generally A-okay with it. I've seen people ask about it numerous times and they are always allowed to bring it in.

They just want you to purchase their food but seem to realize that every piece of food brought in is not a lost sale, unless that food is something they already sell themselves. Which, in my mind at least, seems reasonable.


It was real at one point. Every AMC in our area refused to allow outside food for the entire time I was living with my parents. Some time after I moved out, they dropped that policy. So far as I can tell, it didn't make any difference at all in our spending habits. It just changed how fat my mom's purse got while we entered the theatre.


From my experience working at a movie theater this is not true. While the staff may not care, the theater ownership definitely does. Concessions are where the majority of the money is made as ticket sales have to be split with the studios.


Yeah, I've never seen anyone have their backpack/purse/jacket searched at a movie theatre.


>None of the movies is the US are subtitled. I am a native English speaker, but I really prefer to watch every movie with subtitles.

A subtitle display is often is available for the hearing impaired. Ask about them on your next visit.


Do you honestly expect everyone else in the theater to deal with subtitles only for a select few that want it? Secondly, theaters make their money on food, not the movies.


> In Taiwan, everyone is permitted to bring food and drinks to the theater and that's pretty common. In the US I'm forced to pay an absurd amount of money for awful junk food.

I think this is the standard for the world. In India, we often joke about how the theaters make the real money on the popcorn.

> None of the movies is the US are subtitled.

Yeah, and they shouldn't be. It's highly annoying.

> but I suppose this isn't really a US specific problem.

None of what you said is a US specific problem.


Well I have been to some interesting theaters where it is pretty common to sneak in outside food. It is usually not a not a good experience. Some of foods can be very pungent or have strong smell.

I rather prefer bland food of American theaters when people are sitting in close proximity.


Some movies are subtitled. Contact your local theater to see which. And you can find tea at plenty of places. Look for your local art house cinema.


I want movie theaters to close.

I think people that do not attend movie theaters also do not mind. If they liked movie theaters they would attend.

I have a small apartment with a 70 inch screen in the living room. The three movies a year Hollywood produces I am interested in can be watched from the comfort of my own home in 4k surround sound for $4.99 a few months after they arrive in theaters. I can control the volume, I can pause when I want, I can eat/drink what I want, and I have control over the audience I watch the movie with.

The only advantage a movie theater has is that it receives movies a few months earlier. If movie theaters close that solves that advantage.


The only advantage a movie theater has is that it receives movies a few months earlier. If movie theaters close that solves that advantage.

Not sure what sort of crappy theaters you have nearby, but the 70 foot screen on my local theater absolutely dwarfs the 70 inch screeen of your TV. Highest-gamut color range, laser projection. Fully tuned Dolby Atmos surround sound speaker system. Reclining, reserved seats. Wine, beer, and heated foods.

Pretty much the only advantage of watching at home is that I can pause and not put on clothes.


> the 70 foot screen on my local theater absolutely dwarfs the 70 inch screeen of your TV.

Sure, and our sun isn't the brightest star. It's just much closer. Same logic applies.

When you go to the theater you are getting a boxed experience. The seats, the concessions, the atmosphere. Everything is designed with mass appeal in order to move more units. At home I can tune the experience to how I want.


And you don't have to travel to the theater.

It would be nice if studios can release Blurays at the same time as theaters.


That's a big one if alcohol consumption is involved, like the parent comment mentioned.


Not going to happen for the movies worth watching in the theaters.


> I have a small apartment with a 70 inch screen in the living room.

Some of us have just a 14inch laptop screen at home. Just because you are able to fund your movie obsession doesn't mean casual viewers don't want a good experience.

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