[dwighttk]

It doesn't seem to be the sort of thing that even has a chance of being profitable... The only reason to join is to save money on tickets, the only way they make money is if people spend more on membership fees than the tickets they buy.

[smacktoward]

The play is to get enough users fast enough so that MoviePass sits between the theater chains and a big chunk of their customer base. Once that happens, MoviePass can start squeezing the theaters to discount the prices MP pays for tickets with threats of taking their theaters out of the MP system if they won't. If the MoviePass user base is a big enough fraction of the overall theatergoing population, the theaters will have to accept whatever price MoviePass offers them for tickets or risk losing access to their customers and kneecapping their business.

This is a long-term, Amazon-style play: burning capital up front to establish a commanding market position, at which point you can start raking it in by charging monopolist rents. But it assumes you can build a big enough user base to start dictating terms before you run out of capital, and if you can't, the whole thing falls apart pretty quickly.

[dingaling]

Other than in the very early days Amazon wasn't burning cash; they very rarely went to the market for equity and were self-funding very quickly. They didn't post profits for a long time because there was no point, they used the margin for growth instead.

[mancerayder]

Well the company had vague promises of utilizing the vast subscriber base and information to sell to third parties.

As an amateur stock picker, I've been on the sidelines watching the back and forth commentary on this company (Helios and Matheson) and MoviePass since it was (I believe) in the 30's.

It seemed like everyone knew from the get go that the model wasn't going to turn a profit, but they were hoping for some of the other stuff to generate a return somehow (the information being valuable).

The stock price partially is because a Netflix co-founder is behind the company. However, part of me wonders whether it was a pump-and-dump scheme.

[emodendroket]

I could easily imagine myself signing up for a service like this and then forgetting about it for a month or two at a time.

[Matticus_Rex]

I got mine around the time I was appointed as the DPO-equivalent for GDPR compliance in my company.

I still have it, but I consider it an aspirational purchase for a time when I can actually go to movies. I think I'm averaging about 2 movies for every 3 months.

[ghaff]

You’ve pretty much described my usage of Netflix’ DVD rental plan and HBO streaming.

[emodendroket]

Yeah... I'm not speaking from pure conjecture here.

[swanson]

The intention was for the core "unlimited movies for a monthly fee" to break even (which was plausible based on spiked usage up front that tails off ala gym memberships and things like bulk ticket buying). In addition to collecting analytics data and selling it to movie theaters and studios, the service also makes money by promoting movies within the app (paid placement).

https://www.recode.net/2018/2/18/17025372/transcript-moviepa...

[dwighttk]

gym memberships lock you into a commitment... MoviePass is currently month to month.

[scrooched_moose]

I feel like they're just waiting to gut the service (4 movies a month, or less) and hoping enough people stick around that they're better off.

Before the price drop they were taking in about $1 million/month (20,000 subs at $50). They're over ~2~ 4 million subscribers now at $10/month.

If they have even a 5% retention rate they'll have increased their revenue to $2 million/month.

[dwighttk]

but at $10/month you need most people to not even go to 1 movie a month to even have a chance of breaking even.

[crowbahr]

They're already at 4/mo for new subscribers.

[ben1040]

They've brought the 9.95 "unlimited" plan back, and the cheaper 7.95 plan now only offers 3 tickets per month.

[scrooched_moose]

Oh wow. I was just going off of wikipedia numbers. 5% retention rate then.

[abnry]

Yeah, I wonder what the people who started the business even had in mind. Did they decide to just wing it long term?

[banana_giraffe]

Not that I have any insight, but I always got the impression that they were planning to get a significant fraction of the moving going public under their service. Then they could say "give us discounts or well take your chain off of our service" to the chains.

[rtkwe]

The long term plan was probably to get a large enough subscriber base that they could get some pricing deal from a couple major theater chains. Combine that with some money from selling customer data and they thought they could get profitable and probably could.