One more thing (for now), on MoviePass. Yes, it was abundantly clear that the business mode was/is unsustainable (you need a huge amount of paying subscribers, most of which don't use the service more than once a month, to pay for the frequent users. Period), but when
HMNY bought the company, the sales pitch to investors, consumers, and presumably employees was that it had enough money in the coffers to stay afloat. Or at least the ability to raise more. THAT's the part that has fallen apart.
Now, obviously some of that is the market's reaction to the uncertainty of the model; the inability to pay payment processors and the need for need for debt financing and the apparent inability to raise the amount that would be necessary to keep going is now all hitting the fan.
So yes, but business model was clearly unsustainable. But the more interesting aspect to me is why/how/who kept giving HMNY money. Not to mention the frequent tricks to eke out more of the share price.
My day job is no longer journalism, so I implore others to PLEASE investigate and tell this story because it's utterly fascinating.
It's also potentially tragic for any employees. And the long-term result is that this could wind up *hurting* the theater industry more, as customers who got accustomed to cheaper tickets refuse to go back to the theater. Which of course, proves why the theater chains resisted.
And to be clear, at the $30 and $40 price point, the old MoviePass business model didn't work either. Not enough people signed up to make it really worthwhile; worse, the people that did sign up were people who go to the movies all the time, eroding any profit potential.
I fully expect AMC to raise the price on A-List at some point (current subscribers are "locked in" now), or offer various tiers and bundles. AMC can do this and potentially still be profitable b/c it can actually sell the data it gets to studios.
And AMC obviously gets concessions income too, which is almost pure profit. And if AMC can use a program like A-List to get more butts in seats, it could make more on concessions and sell pre-trailer ads for more $$ too, which further offsets the costs.
Plus, AMC has limits in place around frequency of use, likely chosen based on how much it is willing to lose per customer. It's sort of like the way Disney can get you to buy a season's pass even if you visit the park only once a year b/c the ticket price is about the same
But Disney knows many of its customers won't be back after their vacation, so selling slightly higher earns them money. I can imagine AMC aggressively trying to up-sell an IMAX one-off ticket to A-List. "For just $2 more," with the expectation the customer won't come more than
once a month. But again, AMC owns the whole process end-to-end and has all the customer data. MoviePass is a middle-man and its data is largely useless to the theater chains since they have their own loyalty tracking programs anyway.
Obviously, MoviePass was/is ore attractive for consumers b/c it is chain-agnostic, but that's also why the chains don't like it. Because it is harder for them to build loyalty/repeat visits. Plus, it very consciously turns theaters into a commodity versus an experience.
Anyway, this got longer than I expected. I did order a MoviePass t-shirt last week for shits and giggles. It ships in like two weeks. I'm truly skeptical the service will still be in business by the time I get it. But I do hope it can hang on for a bit longer.
