The Would-Be Comeback Kid
February 6, 2019 2:39 PM Subscribe
"What MoviePass was doing was a gift from the heavens, as far as users were concerned. But in the eyes of business analysts, it was downright offensive. 'They were selling other people’s services at a discount, while paying full price for those services themselves. It was like a bank giving you a dollar for every 25 cents you deposit,' says Wedbush Securities analyst Michael Pachter, who seems mildly upset that I even had the temerity to make him talk about MoviePass." On the movie theatre subscription service's disastrous 2018, and how the company is attempting to rebound.
My mother taught accounting and finance at a university. She would say that most new businesses fail because they are under-capitalized (not enough money), but this is a self-reported statistic. I was in the startup scene for a while and it was obvious that some businesses would never succeed (reach profitability) no matter how much money you threw at them (or in startup-speak, they would never take off no matter how long the runway is). When asked why they failed, they would not say that they had a broken business model, just that they ran out of money.
However, both of those perspectives appear outdated. Startup-esq businesses treat the capital-raising stage as income, and consider they've taken off so long as the VC money keeps coming. They'll spin any metric they can find (users, "engagements", staff numbers, other successful funding rounds) to show that they're a great investment until they finally, inevitably crash and burn. A functional business model is not only not necessary, it actively gets in the way, because real businesses are complicated and lots of VC money wants simple.
The sad thing is the damage the big ones do to their surrounding industry while their non-existent business model displaces anyone actually trying to make something sustainable. And the damage they do again to employees, suppliers and customers as they flare out. Anyone that cares about a healthy economy that benefits all is rightly indignant when asked to talk about them as if they're a real business.
If you want to know what's wrong with the economy there are plenty of places to look, and this is one of them. (Also, if you want to know why regulation, so long as it's actually enforced properly, is a good thing, this is one of the better places to start looking too.)
posted by krisjohn at 3:08 PM on February 6, 2019 [66 favorites]
However, both of those perspectives appear outdated. Startup-esq businesses treat the capital-raising stage as income, and consider they've taken off so long as the VC money keeps coming. They'll spin any metric they can find (users, "engagements", staff numbers, other successful funding rounds) to show that they're a great investment until they finally, inevitably crash and burn. A functional business model is not only not necessary, it actively gets in the way, because real businesses are complicated and lots of VC money wants simple.
The sad thing is the damage the big ones do to their surrounding industry while their non-existent business model displaces anyone actually trying to make something sustainable. And the damage they do again to employees, suppliers and customers as they flare out. Anyone that cares about a healthy economy that benefits all is rightly indignant when asked to talk about them as if they're a real business.
If you want to know what's wrong with the economy there are plenty of places to look, and this is one of them. (Also, if you want to know why regulation, so long as it's actually enforced properly, is a good thing, this is one of the better places to start looking too.)
posted by krisjohn at 3:08 PM on February 6, 2019 [66 favorites]
I never got on this gravy train and I can't say I regret it - I actually wasn't really aware of the meltdown, just that all my friends were talking about how amazing Moviepass was and then all of a sudden they weren't. But man this is an amazing study in hubris. I couldn't quite believe the "Director of Barketing" email was real.
“The only reason anybody has issues [with us] is that, eventually, we failed,” says Lowe. “We failed to deliver the service we were trying to deliver.”
I... just.
posted by sunset in snow country at 3:12 PM on February 6, 2019 [6 favorites]
“The only reason anybody has issues [with us] is that, eventually, we failed,” says Lowe. “We failed to deliver the service we were trying to deliver.”
I... just.
posted by sunset in snow country at 3:12 PM on February 6, 2019 [6 favorites]
"Amazon lost money for 20 years!"
Anyone who believes this is actually the case should not be running a business.
posted by explosion at 3:13 PM on February 6, 2019 [48 favorites]
Anyone who believes this is actually the case should not be running a business.
posted by explosion at 3:13 PM on February 6, 2019 [48 favorites]
The thought of them beaming at the fact that 80% of their customers broke even (while the rest lost them money) is keeping me warm this cold night.
posted by yellowbinder at 3:16 PM on February 6, 2019 [2 favorites]
posted by yellowbinder at 3:16 PM on February 6, 2019 [2 favorites]
“Over 80 percent of subscribers were great customers,” says Lowe—“great,” in this case, meaning rule-abiding and low frequency. “We were roughly breaking even on that group. It was the 12 to 22 percent of subscribers who were using it a lot or abusing it that got us.”
Lionel Hutz voice: "Do these sound like the actions of a man who had all he could eat?"
posted by mandolin conspiracy at 3:19 PM on February 6, 2019 [31 favorites]
Lionel Hutz voice: "Do these sound like the actions of a man who had all he could eat?"
posted by mandolin conspiracy at 3:19 PM on February 6, 2019 [31 favorites]
Anyone who believes this is actually the case should not be running a business.
Preach.
What they failed to anticipate, for some reason, was the way the industry—both exhibitors and distributors—responded to this behavior. “The cinema business is quite a small business actually,” says David Hancock, the director of research and analysis for cinema and home entertainment at IHS Markit. “It’s a relatively restricted number of people in there, and they know each other relatively well. You often get outsiders coming in, not understanding the business, and [they] say, ‘We’re going to impose this on you guys.’ Each time this happens, the business closes ranks. [And] the way MoviePass came in, they were just asking to be isolated.”
Look, if you're going to try to exercise monopsony power, you'd better be a monopsony.
posted by mandolin conspiracy at 3:22 PM on February 6, 2019 [9 favorites]
Preach.
What they failed to anticipate, for some reason, was the way the industry—both exhibitors and distributors—responded to this behavior. “The cinema business is quite a small business actually,” says David Hancock, the director of research and analysis for cinema and home entertainment at IHS Markit. “It’s a relatively restricted number of people in there, and they know each other relatively well. You often get outsiders coming in, not understanding the business, and [they] say, ‘We’re going to impose this on you guys.’ Each time this happens, the business closes ranks. [And] the way MoviePass came in, they were just asking to be isolated.”
Look, if you're going to try to exercise monopsony power, you'd better be a monopsony.
posted by mandolin conspiracy at 3:22 PM on February 6, 2019 [9 favorites]
The MoviePass business model was surely peak... something.
posted by clawsoon at 3:31 PM on February 6, 2019 [1 favorite]
posted by clawsoon at 3:31 PM on February 6, 2019 [1 favorite]
The part I find the funniest about MoviePass is they wound up doing all the hard work of market research for the chains. It's not surprising that within a few months, all the major theater chains had their own competing programs that were better designed - and with most localities being one chain towns, being tied to one isn't that much of a problem.
posted by NoxAeternum at 3:34 PM on February 6, 2019 [5 favorites]
posted by NoxAeternum at 3:34 PM on February 6, 2019 [5 favorites]
The MoviePass business model was surely peak... something.
One hopes.
posted by eirias at 3:40 PM on February 6, 2019 [4 favorites]
One hopes.
posted by eirias at 3:40 PM on February 6, 2019 [4 favorites]
There are a lot of lessons here, most of them fairly obvious, but the failure to anticipate abuse stands out as a particularly important one. They were handing out a credit card that could be used at any movie theater once a day, and they weren't prepared for the inevitable fraud? They didn't think people would, in large numbers, buy tickets for their friends or buy tickets to resell or try to use the cards at the concession stand or any of the dozens of other ways in which such a thing can obviously be abused?
It's important not just because MoviePass valued growth over any ability to deal with fraud, but because it's a problem for the entire tech industry. If you're focused on growth numbers, there's a negative incentive to combat fraud, because trying to stop fraud is both expensive and can hurt growth. And so then you do a lot of growing, and next thing you know, you're Facebook and you don't even know how many accounts you have.
These are often unsolvable problems, but they're made worse by the failure to even consider them at the design stage. Any new product, any new feature has to start with an analysis of "how can someone abuse this, how can they use it to do harm?" and that needs to feed into the design process, sometimes even resulting in "well we won't build this thing then." For MovePass, abuse just meant that they were hemorrhaging even more money, but the consequences could also be deadly.
posted by zachlipton at 3:44 PM on February 6, 2019 [10 favorites]
It's important not just because MoviePass valued growth over any ability to deal with fraud, but because it's a problem for the entire tech industry. If you're focused on growth numbers, there's a negative incentive to combat fraud, because trying to stop fraud is both expensive and can hurt growth. And so then you do a lot of growing, and next thing you know, you're Facebook and you don't even know how many accounts you have.
These are often unsolvable problems, but they're made worse by the failure to even consider them at the design stage. Any new product, any new feature has to start with an analysis of "how can someone abuse this, how can they use it to do harm?" and that needs to feed into the design process, sometimes even resulting in "well we won't build this thing then." For MovePass, abuse just meant that they were hemorrhaging even more money, but the consequences could also be deadly.
posted by zachlipton at 3:44 PM on February 6, 2019 [10 favorites]
Of course, as Pachter said, no MoviePass user would’ve been dumb enough to subscribe and not go see a bunch more movies for what essentially cost zero dollars
They kept saying this, but it seems to me that at 9.95/month, I wouldn't necessarily feel the pressure to see more movies in theaters than I do now, which is a couple times a year. At that price, I wouldn't feel I was wasting a lot of money by not using it. I mean, I like my Spotify subscription, but I don't get worked up if a month goes by when I don't listen to it much.
posted by Orlop at 4:03 PM on February 6, 2019 [2 favorites]
They kept saying this, but it seems to me that at 9.95/month, I wouldn't necessarily feel the pressure to see more movies in theaters than I do now, which is a couple times a year. At that price, I wouldn't feel I was wasting a lot of money by not using it. I mean, I like my Spotify subscription, but I don't get worked up if a month goes by when I don't listen to it much.
posted by Orlop at 4:03 PM on February 6, 2019 [2 favorites]
it seems to me that at 9.95/month, I wouldn't necessarily feel the pressure to see more movies in theaters than I do now, which is a couple times a year.
In any individual month, no, but net, over the course of the year? Absolutely. Otherwise, why bother getting it?
Spotify isn't the best comparison point, because you can't directly compare what you get with Spotify with what you would get without it. It's not like you used to pay to listen to individual songs, and with Spotify that switches to all-you-can-listen. Sure, you can buy individual songs on iTunes (actually, I'm not sure if you can, is that still a thing?), or you can buy CDs, but it's *highly* unlikely that pre-Spotify you were paying just to listen to individual songs.
posted by Bugbread at 4:21 PM on February 6, 2019 [1 favorite]
In any individual month, no, but net, over the course of the year? Absolutely. Otherwise, why bother getting it?
Spotify isn't the best comparison point, because you can't directly compare what you get with Spotify with what you would get without it. It's not like you used to pay to listen to individual songs, and with Spotify that switches to all-you-can-listen. Sure, you can buy individual songs on iTunes (actually, I'm not sure if you can, is that still a thing?), or you can buy CDs, but it's *highly* unlikely that pre-Spotify you were paying just to listen to individual songs.
posted by Bugbread at 4:21 PM on February 6, 2019 [1 favorite]
It was the 12 to 22 percent of subscribers who were using it a lot or abusing it that got us.”::raises hand:: My wife and I got MoviePass as soon as that unlimited deal was announced. It was obviously a terrible idea as a business, but it was unbelievable if you love seeing movies. We never abused the system, we followed all of the rules, but we saw about 2-3 movies a week during that period.
They kept saying this, but it seems to me that at 9.95/month, I wouldn't necessarily feel the pressure to see more movies in theaters than I do now, which is a couple times a year.
It depends on what market you're in. We're in NYC, and here movies are $15-17/ticket. Seeing just one movie a month is already a steal. It was like finding someone handing out money on the street.
posted by Sangermaine at 4:55 PM on February 6, 2019 [27 favorites]
I’m not a big movie goer, but I got MoviePass because I thought it would be a way to incentivize myself into going more often. I definitely made it a point to use up my $99 + fee’s worth (not hard based on full price tickets in NYC). So they even lost a few dollars on me.
A bunch of people I know are real movie fanatics, and they jumped on this, laughing all the way to the theater.
I get the idea they thought people would treat it like, say, one of those gym membership deals where you use it in the beginning and then not much after because going to the gym is hard. But people already knew they liked the movies and would be going anyway - and now they’d go even more.
Seems obvious to me, but I guess I’m not a financial genius.
posted by AMyNameIs at 5:15 PM on February 6, 2019 [11 favorites]
A bunch of people I know are real movie fanatics, and they jumped on this, laughing all the way to the theater.
I get the idea they thought people would treat it like, say, one of those gym membership deals where you use it in the beginning and then not much after because going to the gym is hard. But people already knew they liked the movies and would be going anyway - and now they’d go even more.
Seems obvious to me, but I guess I’m not a financial genius.
posted by AMyNameIs at 5:15 PM on February 6, 2019 [11 favorites]
ah, what goes around comes around...
marknau: Astounding. I can't take a moral argument seriously from any of you who jumped at the opportunity to take advantage of an honest mistake. I don't want to hear ever again about greedy corporations or crooked politicians. You people just showed that you're willing to turn a blind eye when it is to your benefit. How does that make you any different from those you rail against?posted by kaibutsu at 5:29 PM on February 6, 2019 [11 favorites]
NortonDC: We have cameras.
I only got MoviePass because it seemed clearly destined to fail, and I wanted to be part of the trainwreck.
Even heavily subsidized by other people's money, I still didn't particularly enjoy going to the theater. The times were never convenient. The furniture is usually sticky and messy. There's thirty minutes ofcommercials trailers before each movie that I didn't want to see. I can't pause the movie to go to the bathroom. Entertainment is pretty close to free already.
There's a reason why AMC is worth less than 4% of Netflix.
posted by meowzilla at 5:30 PM on February 6, 2019 [2 favorites]
Even heavily subsidized by other people's money, I still didn't particularly enjoy going to the theater. The times were never convenient. The furniture is usually sticky and messy. There's thirty minutes of
There's a reason why AMC is worth less than 4% of Netflix.
posted by meowzilla at 5:30 PM on February 6, 2019 [2 favorites]
Director of Barketing, for when you want it to be obvious that your business is going to the dogs.
posted by betweenthebars at 5:39 PM on February 6, 2019 [3 favorites]
posted by betweenthebars at 5:39 PM on February 6, 2019 [3 favorites]
You would never think that growing too fast is a thing, but it really is.”
Um... yeah we would. It’s like, common knowledge.
posted by greermahoney at 5:56 PM on February 6, 2019 [13 favorites]
Um... yeah we would. It’s like, common knowledge.
posted by greermahoney at 5:56 PM on February 6, 2019 [13 favorites]
I dunno, y’all. MoviePass may be run by idiots and made bad decision after bad decision but they weren’t an all-out consumer scam like Sinemia. MoviePass could win back my trust and get my money again. If Sinemia somehow bought the concept of movies, I would just stop seeing movies altogether rather than give them a penny.
posted by greermahoney at 6:36 PM on February 6, 2019 [1 favorite]
posted by greermahoney at 6:36 PM on February 6, 2019 [1 favorite]
I just listened to the Economist book review of Lab Rats: Why Modern Work Makes People Miserable by Dan Lyons. Quote "Most startups are terribly managed, half-assed outfits run by buffoons and bozos and frat boys....All they have is a not-very-innovative business model; they sell dollar bills for 75 cents and take credit for how fast they're growing."
posted by Pembquist at 6:43 PM on February 6, 2019 [25 favorites]
posted by Pembquist at 6:43 PM on February 6, 2019 [25 favorites]
"Sinemia" isn't a condition which results from not enough sinning?
posted by maxwelton at 6:43 PM on February 6, 2019 [12 favorites]
posted by maxwelton at 6:43 PM on February 6, 2019 [12 favorites]
I think it's the new Senator from Arizona.
posted by Chrysostom at 6:58 PM on February 6, 2019 [11 favorites]
posted by Chrysostom at 6:58 PM on February 6, 2019 [11 favorites]
This article from yesterday seems relevant...
The fundamental problem with Silicon Valley’s favorite growth strategy
The fundamental problem with Silicon Valley’s favorite growth strategy
Blitzscaling promises to teach techniques that are “the lightning fast path to building massively valuable companies.” Hoffman and Yeh argue that in today’s world, it’s essential to “achieve massive scale at incredible speed” in order to seize the ground before competitors do. By their definition, blitzscaling (derived from the blitzkrieg or “lightning war” strategy of Nazi general Heinz Guderian) “prioritizes speed over efficiency,” and risks “potentially disastrous defeat in order to maximize speed and surprise.”posted by chappell, ambrose at 7:12 PM on February 6, 2019 [7 favorites]
Many of these businesses depend on network effects, which means that the company that gets to scale first is likely to stay on top. So, for startups, this strategy typically involves raising lots of capital and moving quickly to dominate a new market, even when the company’s leaders may not know how they are going to make money in the long term.
This premise has become doctrine in Silicon Valley. But is it correct? And is it good for society? I have my doubts.
they sell dollar bills for 75 cents and take credit for how fast they're growing
Sure, but from my perspective, if VCs want to subsidize my life, I'll let them. The problem is that everyone is hip to this game, and it all falls apart once companies realize they have to try selling dollar bills for $1.05 (which still isn't enough, because the investors want to 10x their investments, not sit on 5% margins). And then they fail and everyone moves on to the next one.
San Francisco churned through so many food delivery startups a few years ago that were all based on this model: customizable bento boxes, rice bowls, paleo food, etc... All of them were fun when the promo codes and referral businesses were flying high, when the pricing was below cost, but none of them lasted once they cut the growth hack marketing back and tried to charge real prices that took into account the costs of delivering food all over a very congested city. And the investors approached this stuff like they were buying into fast-growing tech companies, when they were really just investing in a restaurant. Bento raised over $1.5M; it was a couple of people, a commissary kitchen somewhere, and a couple of folks driving Nissan Versas. Sprig raised over $55M; Munchery $125M. Maybe there are sustainable businesses there, but not the kind of business that will give investors the kind of return they expect for that money. And when this stuff fails, it all falls on the employees and contractors and vendors. Perfectly cromulent business, like Patreon—which has what should be the winner of a business model of "we charge 10% to run a website and move some money around, keeping around 5% for ourselves after transaction costs"—, are at risk of being eaten into the ground because the only way they can be successful is if they're massively hugely absurdly successful; being moderately profitable is a failure to their investors.
MovePass is what happens when you take that to its absurd logical conclusion and sell dollar bills for pennies specifically to those people who really like dollar bills. It's hard to imagine there was ever really a plan, but they went for it, and for one brief shining moment, some investors subsidized everyone's movies until the cash ran out.
posted by zachlipton at 7:18 PM on February 6, 2019 [17 favorites]
Sure, but from my perspective, if VCs want to subsidize my life, I'll let them. The problem is that everyone is hip to this game, and it all falls apart once companies realize they have to try selling dollar bills for $1.05 (which still isn't enough, because the investors want to 10x their investments, not sit on 5% margins). And then they fail and everyone moves on to the next one.
San Francisco churned through so many food delivery startups a few years ago that were all based on this model: customizable bento boxes, rice bowls, paleo food, etc... All of them were fun when the promo codes and referral businesses were flying high, when the pricing was below cost, but none of them lasted once they cut the growth hack marketing back and tried to charge real prices that took into account the costs of delivering food all over a very congested city. And the investors approached this stuff like they were buying into fast-growing tech companies, when they were really just investing in a restaurant. Bento raised over $1.5M; it was a couple of people, a commissary kitchen somewhere, and a couple of folks driving Nissan Versas. Sprig raised over $55M; Munchery $125M. Maybe there are sustainable businesses there, but not the kind of business that will give investors the kind of return they expect for that money. And when this stuff fails, it all falls on the employees and contractors and vendors. Perfectly cromulent business, like Patreon—which has what should be the winner of a business model of "we charge 10% to run a website and move some money around, keeping around 5% for ourselves after transaction costs"—, are at risk of being eaten into the ground because the only way they can be successful is if they're massively hugely absurdly successful; being moderately profitable is a failure to their investors.
MovePass is what happens when you take that to its absurd logical conclusion and sell dollar bills for pennies specifically to those people who really like dollar bills. It's hard to imagine there was ever really a plan, but they went for it, and for one brief shining moment, some investors subsidized everyone's movies until the cash ran out.
posted by zachlipton at 7:18 PM on February 6, 2019 [17 favorites]
First of all, previously.
Second, guess who's still hanging on? I'm not even one of the super active customers, averaging only about three movies a month (which would cost $30 to $40 total if I didn't have MP). I've seen 44 movies total so far, and it's fun. But after the three movie limits rule and shutting down showtimes in the middle of the day, it is a little bit annoying sometimes.
posted by FJT at 7:38 PM on February 6, 2019 [1 favorite]
Second, guess who's still hanging on? I'm not even one of the super active customers, averaging only about three movies a month (which would cost $30 to $40 total if I didn't have MP). I've seen 44 movies total so far, and it's fun. But after the three movie limits rule and shutting down showtimes in the middle of the day, it is a little bit annoying sometimes.
posted by FJT at 7:38 PM on February 6, 2019 [1 favorite]
I dunno, y’all. MoviePass may be run by idiots and made bad decision after bad decision but they weren’t an all-out consumer scam like Sinemia. MoviePass could win back my trust and get my money again. If Sinemia somehow bought the concept of movies, I would just stop seeing movies altogether rather than give them a penny.
Umm, did you evenuse try to use MoviePass this summer? A movie a day became a movie you haven't seen before became a non-blockbuster movie became a select roster of movies became a limited number of ticket for those movies.
Now, their new plans require payment via ACH--good like getting your bank to reverse those charges when 3 movies a month becomes 1 a quarter.
posted by MikeKD at 7:42 PM on February 6, 2019 [2 favorites]
Umm, did you even
Now, their new plans require payment via ACH--good like getting your bank to reverse those charges when 3 movies a month becomes 1 a quarter.
posted by MikeKD at 7:42 PM on February 6, 2019 [2 favorites]
Patreon has another problem, which is that it relies on users to keep their credit cards up to date.
That's true of other subscription services too, but unlike Netflix, Spotify or a news site you often don't use the Patreon app to consume your subscription, so you have to go to the site, log in and wait for the content creator to re-add you to a mailing list.
If another company that already has people's credit cards on file like Amazon or PayPal introduced a Patreon competitor with the exact same terms, it would at least on its face be better for consumers and creators.
posted by smelendez at 7:47 PM on February 6, 2019 [2 favorites]
That's true of other subscription services too, but unlike Netflix, Spotify or a news site you often don't use the Patreon app to consume your subscription, so you have to go to the site, log in and wait for the content creator to re-add you to a mailing list.
If another company that already has people's credit cards on file like Amazon or PayPal introduced a Patreon competitor with the exact same terms, it would at least on its face be better for consumers and creators.
posted by smelendez at 7:47 PM on February 6, 2019 [2 favorites]
By their definition, blitzscaling (derived from the blitzkrieg or “lightning war” strategy of Nazi general Heinz Guderian) “prioritizes speed over efficiency,” and risks “potentially disastrous defeat in order to maximize speed and surprise.”
Jesus Christ- do these people not realize that the exact reason the Nazi war effort failed was that it relied on looting resources to maintain momentum and was completely unsustainable in the long run?
posted by TheWhiteSkull at 8:47 PM on February 6, 2019 [17 favorites]
Jesus Christ- do these people not realize that the exact reason the Nazi war effort failed was that it relied on looting resources to maintain momentum and was completely unsustainable in the long run?
posted by TheWhiteSkull at 8:47 PM on February 6, 2019 [17 favorites]
Umm, did you even use try to use MoviePass this summer? A movie a day became a movie you haven't seen before became a non-blockbuster movie became a select roster of movies became a limited number of ticket for those movies.
Yup. And as soon as I saw the downgrade in service, I cancelled with no issue. Sinemia lied about their service to begin with, gaslit me that the service I thought I signed up for was coming soon, provided no service I could use, and wouldn’t refund me for a year’s service when I couldn’t use it even once. I gave them 7 times to make things right, and had to get my credit card company to reverse the charges.
I’m hearing now that people had issues canceling MoviePass, but that wasn’t my experience. They changed their terms of service to something that didn’t work for me, I quit, the end. They are within their rights to change their business model, as long as they let people out of it. That’s different than lying from the beginning. (If they charged people for a year, and then changed the terms, and didn’t refund or make it right, that’s just as bad as what I went through with Sinemia.)
posted by greermahoney at 8:52 PM on February 6, 2019 [3 favorites]
Yup. And as soon as I saw the downgrade in service, I cancelled with no issue. Sinemia lied about their service to begin with, gaslit me that the service I thought I signed up for was coming soon, provided no service I could use, and wouldn’t refund me for a year’s service when I couldn’t use it even once. I gave them 7 times to make things right, and had to get my credit card company to reverse the charges.
I’m hearing now that people had issues canceling MoviePass, but that wasn’t my experience. They changed their terms of service to something that didn’t work for me, I quit, the end. They are within their rights to change their business model, as long as they let people out of it. That’s different than lying from the beginning. (If they charged people for a year, and then changed the terms, and didn’t refund or make it right, that’s just as bad as what I went through with Sinemia.)
posted by greermahoney at 8:52 PM on February 6, 2019 [3 favorites]
Now, their new plans require payment via ACH--good like getting your bank to reverse those charges when 3 movies a month becomes 1 a quarter.
Sure, but as long as it’s a month to month charge, and they let you cancel reasonably, as soon as they change the service to something you don’t like, quit.
And according to the app right now (yes, ugh, I just downloaded and looked) they accept credit cards, and there’s no option for ACH.
posted by greermahoney at 8:59 PM on February 6, 2019
Sure, but as long as it’s a month to month charge, and they let you cancel reasonably, as soon as they change the service to something you don’t like, quit.
And according to the app right now (yes, ugh, I just downloaded and looked) they accept credit cards, and there’s no option for ACH.
posted by greermahoney at 8:59 PM on February 6, 2019
When I first heard of moviepass, I thought of Milo Minderbinder's eggs from Catch-22. The ones he buys in Malta for 7 cents and sells in the mess hall for 5 cents and makes a profit on every time. They forgot the hidden part of the trick- buy the eggs for a cent each initially, sell them in Malta, buy them again and you're making profit on a loss. They needed a way to buy the tickets cheaply, which they didn't have.
That said, at my last job, I was part of Corporate Perks, which allowed me to buy $8 tickets to movies in Manhattan. Not quite the giveaway of moviepass, but still, half price tickets. I think they continue by either actually having deals with movie chains or by selling those as a loss leader for the big things (like packaged vacations).
posted by Hactar at 9:02 PM on February 6, 2019 [3 favorites]
That said, at my last job, I was part of Corporate Perks, which allowed me to buy $8 tickets to movies in Manhattan. Not quite the giveaway of moviepass, but still, half price tickets. I think they continue by either actually having deals with movie chains or by selling those as a loss leader for the big things (like packaged vacations).
posted by Hactar at 9:02 PM on February 6, 2019 [3 favorites]
I’m reminded of my brother, who had an excellent restaurant in a small town, funded by my father, and one time when I was privy to a phone call in which my brother’s point was that even though they were operating at a loss per plate vs costs, their customer numbers were raising, and my question was “doesn’t that just increase total losses then?” (Obviously there are other factors to consider there but the point remains that when the goal isn’t profitability or sustainability but rather just selling your capital source on one more hit, you don’t have a business but a very expensive habit.)
posted by Navelgazer at 9:10 PM on February 6, 2019 [7 favorites]
posted by Navelgazer at 9:10 PM on February 6, 2019 [7 favorites]
MoviePass was apparently ACH-only back in December, which is shady as hell. No credit card dispute rights and much harder to insist they cancel. Of all the companies to consider trusting with bank account details, MoviePass would not be high on my list.
posted by zachlipton at 9:11 PM on February 6, 2019 [3 favorites]
posted by zachlipton at 9:11 PM on February 6, 2019 [3 favorites]
I’m reminded of my brother, who had an excellent restaurant in a small town, funded by my father, and one time when I was privy to a phone call in which my brother’s point was that even though they were operating at a loss per plate vs costs, their customer numbers were raising, and my question was “doesn’t that just increase total losses then?”
No, you see, they make a loss on each sale but they make it up on volume
posted by chappell, ambrose at 9:16 PM on February 6, 2019 [8 favorites]
No, you see, they make a loss on each sale but they make it up on volume
posted by chappell, ambrose at 9:16 PM on February 6, 2019 [8 favorites]
[W]hat the company did in 2018 proved that there was another way; that there is a massive group of people—into the millions—who are interested in moviegoing subscriptions.
This line in the article seems poorly supported by the available evidence. I'd probably accept a free beer on a hot day even if it's Budweiser, but that would paint a misleading picture of what I'll drink at full price.
posted by aws17576 at 9:18 PM on February 6, 2019 [5 favorites]
This line in the article seems poorly supported by the available evidence. I'd probably accept a free beer on a hot day even if it's Budweiser, but that would paint a misleading picture of what I'll drink at full price.
posted by aws17576 at 9:18 PM on February 6, 2019 [5 favorites]
No, you see, they make a loss on each sale but they make it up on volume
It worked for First Citiwide Change Bank.
posted by Bugbread at 9:22 PM on February 6, 2019 [2 favorites]
It worked for First Citiwide Change Bank.
posted by Bugbread at 9:22 PM on February 6, 2019 [2 favorites]
My current favourite Dumb As A Sack Of Hammers startup is Trōv (which I have only successfully pronounced by imitating the sound of vomiting). It's an 'on demand' 'micro-duration' 'disruptive' insurance offering.
As far as I know, they're still in the VC funding stage, and there's no way in hell it can't be a huge hole that money just falls out of in clown-car-loads. I worked in personal insurance for a long goddamned time, and pricing and claims costs analysis shows that the loss ratios on the unspecified and specified personal valuables components of home and contents insurance policies are huge; they're almost never profitable on their own, and that's why they're typically not available as standalone products separate to at least a contents insurance policy that helps to offset the risk assumed by the insurer.
The temptation is to build up a Tasker profile that detects sudden value changes from the accelerometer and insures my phone through Trōv accordingly for three seconds at a time - long enough to drop a phone more than 40 meters.
When a former employer of mine announced their intention to partner with Trōv at their big corporate roadshow, it was the last straw. I just held my head in my hands and muttered "I've got to get out of this fucking industry."
posted by MarchHare at 10:20 PM on February 6, 2019 [10 favorites]
As far as I know, they're still in the VC funding stage, and there's no way in hell it can't be a huge hole that money just falls out of in clown-car-loads. I worked in personal insurance for a long goddamned time, and pricing and claims costs analysis shows that the loss ratios on the unspecified and specified personal valuables components of home and contents insurance policies are huge; they're almost never profitable on their own, and that's why they're typically not available as standalone products separate to at least a contents insurance policy that helps to offset the risk assumed by the insurer.
The temptation is to build up a Tasker profile that detects sudden value changes from the accelerometer and insures my phone through Trōv accordingly for three seconds at a time - long enough to drop a phone more than 40 meters.
When a former employer of mine announced their intention to partner with Trōv at their big corporate roadshow, it was the last straw. I just held my head in my hands and muttered "I've got to get out of this fucking industry."
posted by MarchHare at 10:20 PM on February 6, 2019 [10 favorites]
Anyone who believes this is actually the case should not be running a business.
And yet, he was the president of the company I worked for on the front half of 2017. And was convinced Amazon wasn’t sustainable even after all that time. I mean I get it if you’re a dinosaur that had been doing the same thing for 40 years, and saw the rise of Amazon, understood how business operated before amazon, before the internet took over everything, it could be confusing. But also 🤦🏻♀️.
posted by [insert clever name here] at 11:16 PM on February 6, 2019
And yet, he was the president of the company I worked for on the front half of 2017. And was convinced Amazon wasn’t sustainable even after all that time. I mean I get it if you’re a dinosaur that had been doing the same thing for 40 years, and saw the rise of Amazon, understood how business operated before amazon, before the internet took over everything, it could be confusing. But also 🤦🏻♀️.
posted by [insert clever name here] at 11:16 PM on February 6, 2019
And as soon as I saw the downgrade in service, I cancelled with no issue.
So, it sounds like you didn't do the annual subscription. I did. What I purchased ended up not being what I received. Luckily, Costco isn't run by gaint ass-douches and I was able to get 1/3 of my cost refunded.
posted by MikeKD at 12:58 AM on February 7, 2019
So, it sounds like you didn't do the annual subscription. I did. What I purchased ended up not being what I received. Luckily, Costco isn't run by gaint ass-douches and I was able to get 1/3 of my cost refunded.
posted by MikeKD at 12:58 AM on February 7, 2019
...even though I wasn't able to use it for about two months before requesting the refund.
posted by MikeKD at 12:59 AM on February 7, 2019
posted by MikeKD at 12:59 AM on February 7, 2019
When you can pay for Moviepass in bitcoin we will achieve the singularity.
And I’ve lived in NYC for half my life and had no idea movie tickets were over $15. I also can’t recall the last movie I saw in a theater.
posted by spitbull at 3:18 AM on February 7, 2019
And I’ve lived in NYC for half my life and had no idea movie tickets were over $15. I also can’t recall the last movie I saw in a theater.
posted by spitbull at 3:18 AM on February 7, 2019
their customer numbers were raising, and my question was “doesn’t that just increase total losses then?”
A.K.A. Blue Monday Syndrome
posted by Grangousier at 3:35 AM on February 7, 2019 [1 favorite]
A.K.A. Blue Monday Syndrome
posted by Grangousier at 3:35 AM on February 7, 2019 [1 favorite]
So why do VCs give money to startups for which it seems obvious to outsiders that there is no sustainable business plan? Is the idea to snare as many people as possible, harvest their personal info, then fold and sell it?
posted by eirias at 4:24 AM on February 7, 2019
posted by eirias at 4:24 AM on February 7, 2019
To apparently soften the blow of taking unlimited access away from its users, MoviePass threw in a three-month trial to iHeartRadio.
Clearly, they knew what their customers yearned for.
posted by AlonzoMosleyFBI at 5:26 AM on February 7, 2019
Clearly, they knew what their customers yearned for.
posted by AlonzoMosleyFBI at 5:26 AM on February 7, 2019
A friend of mine spent last year telling me about MoviePass and it sounded too good to be true, so when I heard about the meltdown, I thought, well, yup.
The most interesting part of this article, to me, though, wasn't the various vivid descriptions of how they sold dollars for a quarter. It was the fact that they rolled into the cinema industry and immediately tried to throw their weight around, didn't know what they were doing, and found a lot of doors immediately closed to them.
Reading it, I thought, wow, go figure, a tech bros enters a different industry, think that they know how to operate within it because Entitlement, and find that their ignorance becomes a liability.
Really, MoviePass only seems special because they managed to not abuse a workforce or kill people along the way.
posted by entropone at 5:38 AM on February 7, 2019 [8 favorites]
The most interesting part of this article, to me, though, wasn't the various vivid descriptions of how they sold dollars for a quarter. It was the fact that they rolled into the cinema industry and immediately tried to throw their weight around, didn't know what they were doing, and found a lot of doors immediately closed to them.
Reading it, I thought, wow, go figure, a tech bros enters a different industry, think that they know how to operate within it because Entitlement, and find that their ignorance becomes a liability.
Really, MoviePass only seems special because they managed to not abuse a workforce or kill people along the way.
posted by entropone at 5:38 AM on February 7, 2019 [8 favorites]
Many companies declare losses.
Anyone who has run their own company knows why this is.
I ran my own business and it always showed a loss - but it kept me in house and food for years.
posted by Burn_IT at 5:46 AM on February 7, 2019 [1 favorite]
Anyone who has run their own company knows why this is.
I ran my own business and it always showed a loss - but it kept me in house and food for years.
posted by Burn_IT at 5:46 AM on February 7, 2019 [1 favorite]
And I’ve lived in NYC for half my life and had no idea movie tickets were over $15.
$15 is a normal movie ticket price at plenty of theaters in the US, but the low price first-run tickets in NYC are not $15, they are more like $7 where in most other places in the US they are $5.
Which is actually why prepaid ticket offers like movie pass should be financially viable - theaters charge above the market clearing price for tickets leaving half the seats empty which doubly hurts them because they make most of their money through concession prices. So they should be willing to give a certain number of seats away since they are marginally wasted anyways. So all moviepass really needed to do maybe add restrictions to popular times and they'd be golden.
Instead, newer theaters dramatically reduce the number of seats and increase luxury (where have we heard that strategy before?) to maintain ticket prices.
posted by The_Vegetables at 2:08 PM on February 7, 2019
$15 is a normal movie ticket price at plenty of theaters in the US, but the low price first-run tickets in NYC are not $15, they are more like $7 where in most other places in the US they are $5.
Which is actually why prepaid ticket offers like movie pass should be financially viable - theaters charge above the market clearing price for tickets leaving half the seats empty which doubly hurts them because they make most of their money through concession prices. So they should be willing to give a certain number of seats away since they are marginally wasted anyways. So all moviepass really needed to do maybe add restrictions to popular times and they'd be golden.
Instead, newer theaters dramatically reduce the number of seats and increase luxury (where have we heard that strategy before?) to maintain ticket prices.
posted by The_Vegetables at 2:08 PM on February 7, 2019
eirias: "So why do VCs give money to startups for which it seems obvious to outsiders that there is no sustainable business plan? Is the idea to snare as many people as possible, harvest their personal info, then fold and sell it?"
My understanding of the thought process for MoviePass was this (and this is going off my memory, so I might be wrong) (numbers made up from whole cloth for simplicity's sake):
The big problem, though, was that the dwindling ticket sale issue itself disappeared. In 2002, there were 1,575,738,917 tickets sold. In 2011, when MoviePass was launched, that number had dropped to 1,209,352,777. That's a 24% drop, which is a big deal. People were extrapolating and assuming that this trend would accelerate, so in the future cinemas would be hurting and really need to sell tickets at any cost. The idea didn't look absolutely insane to VCs (though, really, the "buffet" approach, as opposed to "discount tickets," should have). But then the film industry started picking back up again. In 2018, there were 1,346,299,232 tickets sold. While the number hadn't recovered to 2002 levels, it was a 12% increase compared to when MoviePass launched, and that 12% was not all from MoviePass. So the VCs realized that they weren't funding a company that would take advantage of a dying movie industry, but one that was trying to squeeze discounts from a thriving movie industry.
After that, I imagine, it was largely sunk costs.
posted by Bugbread at 4:04 PM on February 7, 2019 [6 favorites]
My understanding of the thought process for MoviePass was this (and this is going off my memory, so I might be wrong) (numbers made up from whole cloth for simplicity's sake):
- Seeing movies in theaters was seen as dying out. Viewership was plummeting.
- Empty seats generate zero revenue. If you are a cinema, and your cinema is half empty, it would be better to fill up the remaining seats at $3 a ticket (as opposed to, say, a normal price of $10) than to just leave the seats empty.
- MoviePass starts out by buying tickets at full price and reselling them at a discount.
- MoviePass builds up a big customer base.
- MoviePass then uses its market position to demand that movie theaters give it reduced price tickets. I.E. "Hey, Cinemark, if you don't sell us tickets cheap, we'll just stop doing business with you. MoviePass customers will all go to AMC theaters. You could go back to having half-empty rooms, or you could sell us tickets at a wholesale price of $3."
- Movie theaters sell to MoviePass at $3. MoviePass has worked out that the average MoviePass user watches 3 movie per month. If they charge $15 a month, $9 of those will go to the cinema, and $6 will be MoviePass revenue.
- The theaters win by making $3 per seat for seats that would have otherwise brought them $0.
- The users win because they pay $15 to watch three movies, whereas normally that would cost them $30.
- MoviePass wins because they're making $6 per user per month.
The big problem, though, was that the dwindling ticket sale issue itself disappeared. In 2002, there were 1,575,738,917 tickets sold. In 2011, when MoviePass was launched, that number had dropped to 1,209,352,777. That's a 24% drop, which is a big deal. People were extrapolating and assuming that this trend would accelerate, so in the future cinemas would be hurting and really need to sell tickets at any cost. The idea didn't look absolutely insane to VCs (though, really, the "buffet" approach, as opposed to "discount tickets," should have). But then the film industry started picking back up again. In 2018, there were 1,346,299,232 tickets sold. While the number hadn't recovered to 2002 levels, it was a 12% increase compared to when MoviePass launched, and that 12% was not all from MoviePass. So the VCs realized that they weren't funding a company that would take advantage of a dying movie industry, but one that was trying to squeeze discounts from a thriving movie industry.
After that, I imagine, it was largely sunk costs.
posted by Bugbread at 4:04 PM on February 7, 2019 [6 favorites]
How does that logic even work? It's pretty clear that most theaters aren't interested in radically dropping their prices in order to attract more moviegoers. For one thing, purchases of snack foods don't scale: people don't spend twice as much on snacks just because they watch two movies back-to-back. Even if they're just watching one movie at a time - I'm sure some people would see a movie every day and buy a soda as they go in, but they probably wouldn't buy a huge bag of snacks at movie concession prices every single day.
posted by Joe in Australia at 11:51 PM on February 10, 2019
posted by Joe in Australia at 11:51 PM on February 10, 2019
« Older With all due respect . . | Even cooler than Super Blood Wolf Moon Newer »
This thread has been archived and is closed to new comments
The Entire Economy Is MoviePass Now. Call it a Locust Economy
posted by the man of twists and turns at 3:02 PM on February 6, 2019 [10 favorites]