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Subscription Movie Ticket Service MoviePass Officially Shutting Down
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https://techcrunch.com/2019/08/08/uber-stock-plummets-following-second-quarter-earnings-report/
"Uber has disclosed earnings for the second time since becoming a public company, reporting revenues of $3.16 billion on losses of $5.2 billion for the second quarter of 2019."
That's a loss over the course of three months.
I’d be shocked if all of the big chain movie theaters didn’t eventually roll out a service like this. They basically have fixed costs to run the business. That is to say it costs them about as much to show a movie that’s sold out as it does to show a movie with a few people in the audience.
As more and more people forgo watching new movies at the movie theater in favor of renting it in digital and watching it from the comfort of their own home on their 60+ inch 4K TV’s these chains need a way to attract customers who wouldn’t otherwise go as often.
A service like this is a nice way to get more people through the door and supplement the theaters income on ticket sales with more snack, food and beverage sales.
Especially in high end theater chains that offer alcohol and higher end foods. There’s a chain by me that offers reclining chairs and lunch/dinner. You can have a nice lunch or dinner and some drinks while watching a movie from the recliner with everything brought right to the table next to your seat. They make good money on food and drink sales so if they have shows with empty seats why not offer some kind of service where they can lure people like me in during off peak hours who otherwise might not even go once a month and make some additional revenue on food and drink sales that they otherwise wouldn’t have made.
It makes a ton of sense when you look at it from that prospective. They simply need to set it up so the movies are during off peak hours where they know a movie will not sell out with standard ticket sales. I’d easily pay $20 bucks if I could go and see as many movies as I wanted in a month even if there was a restriction on new blockbusters that were highly likely to sell out or come close. I can wait a few weeks for films like that. Right now I’m waiting 4 to 6 months anyway to rent them and watch them on 4K in digital.
Not quite. If a company is losing money because it is building market share and its business, it may make a great business plan. Amazon, for example, lost money for a decade before it made it first yearly profit, and then for several years made anemic profits. Uber didn't build its business model on automated cars saving it, as it knows better than most that self-driving cars are many years out. Instead, knew that their greatest asset was being first to market such that they owned those markets. Uber bet on dominating markets so quickly and thoroughly that they wouldn't have any significant competition. At that point, their costs would stabilize, and there would be room to raise prices. Thus, they spent heavily on getting into new markets and signing up riders and drivers. It almost worked, and may still, but unfortunately, their corporate reputation took such a hit in 2017 that they allowed Lyft to gain a strong foothold in many places.
MoviePass' business model never made sense as there was no way to make a profit. Indeed, the more people that signed up, the more money they lost. Spotify is in a similar situation in that they have to pay out more as more people use their service; hence they have hemorrhaged money, and are desperately trying to get another revenue stream, e.g., podcasts to become profitable. MoviePass and Spotify are venture capital scams. Whether Uber is also, is still to be seen.
The original business model, analytics the money. Once that got out, selling customer locations, patterns, changes were made. Thus, limited to zero analytics. Business model failure. Not much to do with movie viewing.
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Exactly. Amazon could have made profits sooner... but they decided to roll every cent of profit back into the company.
And look where they are today. Once just a bookseller... now they sell everything. And they also make tons of money selling web services to many major corporations. They have become an integral part of the internet.
Amazon is the poster-child of "money-losing startup turned billion-dollar business"
Then there are other companies like Spotify where there was never a hope of profit. It's nearly impossible to build a company just selling subscriptions to streaming music. Like you say... the more customers they have... the more costly it becomes. It's an uphill battle as their expenses always outweigh their revenue.
Spotify is trying to diversify by offering podcasts or whatever. But they will never overcome the cost of the basic product they're trying to sell: licensed music.
As good as Spotify is... and as much as people love it... it's a terrible business.
I think I read that for every $1.00 Spotify gets in revenue... it actually costs them $1.20. You can't run a business like that.
Uber has a path to make money by betting on eventually introducing all autonomous taxis. Moviepass's business model hah no future potential to recoup the investment. It was basically using investor money to buy people movie tickets and doesn't actually do anything with the money.
Well, I’m sorry you missed out on a great deal. There was no downside to the subscriber until the restrictions they imposed made it worthless. ♂️
They also subsidise every ride. The business model is either lower price and see their competitors fail, then increase prices or wait for driverless cars. The model at most cab companies never involved owning the cars or employing driver they just charge for the radio system
I think that might be an over simplification. Sure the overhead cost to the theater itself is the same if 0 or 100 people see a movie, but what about the ticket sales sharing they have to do with the movie studios to show a movie? A movie theater barely makes money on the actual showing of movies until much later in the movies run. If they are having to pay the movie studios 80% of the tickets sales for the first few weeks (when a movie is at its most profitable) then I doubt the studio is going to accept 80% of a free ticket. This would result in the theater having to pay TONS of money out of pocket just to sustain the program.
This concept would work IF it only allowed for movies that are towards the end of their run, which is when the movie theater is receiving the majority of the ticket sale split.
It’s true. Uber has never had a profitable year. The business plan was to gain enough users so the service became part of everyone’s everyday life, but competition and had PR undermined that goal. They have tons of competition overseas as well and little brand loyalty. Initial investors are thrilled though because they got rich from the IPO. Who cares if the business actually works if you can double your money after the IPO.
Changing (some) user's passwords (unrequested and unannounced) intentionally to prevent your customers from logging in, so they can't make use of the service they've paid you for, is all kinds of shady.
I think they had several hopes/plans in mind
* banking on most people being like other memberships and not actually going very often (especially after the initial novelty wore off)... like gyms
* they were planning on selling user data (no joke) and marketing, trends, etc.
* They hoped that if it caught on well enough and brought enough people into theaters that those theaters would start offering moviePass a cut just to get people in and sell more popcorn.
* The owners likely thought/hoped it would be bought up by bigger fish by now, so they could take their millions and leave. even still I doubt the executives are leaving hurting though.
It wasn't shady in the way that shady business typically shows up, like, as a subscriber I kept expecting to run into the "fine print" like in an MLM scheme or something like that but uh... I never did. In the beginning for subscribers it really was as good as they said it would be as long as you lived near some theaters that took it.
No, the people who MoviePass was a scam for were the poor saps who invested in it.
There aren't any good AMC theaters anywhere near me but my local chain recently introduced a program where for $15/month I can see two movies in any format, book ahead of time with no fees, add up to six +1's at a $1 discount, and get 15% off concessions. For that, and the few months where the service was actually good, I thank Moviepass. For everything else, good riddance!
This was the poster child for the flawed logic, "what we lose on each sale, we'll make up in volume."