The Entrepreneur Forum | Startups | Entrepreneurship | Starting a Business | Motivation | Success
  • It's back! As an INSIDER you can now SORT any thread by LIKES. See this post for more info.
  • Join 50,000+ entrepreneurs who are earning their freedom and living their dream.

    "Fastlane" is an entrepreneur discussion forum based on The C.E.N.T.S Framework outlined in the two best-selling books by MJ DeMarco (The Millionaire Fastlane and UNSCRIPTED®). From multimillionaires to digital nomads to side hustlers who are grinding a job, the Fastlane Forum features real entrepreneurs creating real businesses with one goal in mind: Freedom— both financial and temporal.

    Download (Unscripted) Download (Millionaire Fastlane) Register
    Registering for the forum removes this block.

OFF-TOPIC The Death Of MoviePass...

PizzaOnTheRoof

1% Better Every Day
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Speedway Pass
Jul 30, 2018
623
1,400
422
Texas
Well MoviePass (and it’s parent company) is officially dead.

Goes to show even a market disruptor can fail without a solid business model.

Here’s a timeline from Robinhood Snacks:
2011 - 2019: MoviePass shuts down after disrupting the movie industry​
It lived life 2 thumbs up... Unlimited movie tickets for $10/month. MoviePasswas truly Netflix, but in-theater. It sounded too good to be true... and it was. Its parent company, Helios and Matheson, officially shut down the all-you-can-eat movie buffet subscription on Saturday after an epic run. Helios shares hit $5,100 at peak MoviePass insanity. Today they're $0.0018.
Let's look back on a short life well-watched...
  • Act I - Irrelevance: Founded in 2011, MoviePass offered a $40/month subscription that let you into any theater to watch any movie. Worth it only for the very lonely and movie-crazy.
  • Act II - The new guy in town: Mitch Lowe was hired as CEO. There were only 20K customers, so he cut the price by 75%.
  • Act III - Peak insanity: At $10/month, the breakeven price for MoviePass was 1 movie per month, so people signed up. 3M people binged 5% of all movies watched in late 2018.
  • Act IV - The reckoning: Theaters still charged full price for each ticket, forcing MoviePass to pay the difference — and lose $21M/month ("Amazon lost money for 20 years" — the CEO). So it had to raise prices/add a bunch of restrictions.
  • Act V - This Saturday: It's over. The parent company doesn't know when or if it will come back.
  • Post-credit scene: Globo-theater-chain AMC now offers something like MoviePass. MoviePass "pulled a Napster": it changed the industry even though it didn't survive.
THE TAKEAWAY​
Disruptors can fail, too... Drive any commercial strip and you can rubberneck bankrupt chains (Sears, Sports Authority, Radio Shack). But MoviePass shows that a new, completely digital tech company can fail too. Investors ask "what's the path to profits" for awesome-but-loss-making companies like Uber, Snap, and SmileDirectClub because they don't want to watch their shares go to almost $0 like MoviePass.​
 

Merging Left

Silver Contributor
Read Millionaire Fastlane
Speedway Pass
Jul 20, 2014
392
699
279
29
MoviePass was relying on their ability to get a critical mass of users, and then use their heavy influence to steer the film industry itself by essentially getting a say in whether or not they make a movie available to their user base, or charging production companies a fee to push the movie to their viewers. It was, even on paper, an incredibly risky gamble, and it obviously didn't play out like how it needed to.

Their only value skew was being cheaper than paying for a full-priced movie ticket. As soon as they tried to raise prices, they were not valuable to the users so they stopped the service. Or they did weird stuff like only making certain movies available on certain days, which is why I ultimately quit using the service.
 

Dignium

Contributor
FASTLANE INSIDER
Oct 6, 2017
51
37
61
25
San Jose, CA
I like to think that Mitch Lowe was running a charity. With the rash decisions, shady moves & no real action plan to make Moviepass profitable - a lot of their attempts at pivoting & horizontalling looked to me more like temporary, limited engagements & tie-ins; not like building long-haul, mutually beneficial business relationships. Those in charge acted like all-sizzle, no steak entrepreneurs.

They could have had many more value skews, like a ratings system to rate your theater. They could have rolled it out region by region and made deals with indie theaters who need more foot traffic, and then marketed that as a bespoke hipster experience. Instead they competed on price alone.

MoviePass broke and reinstated their value proposition, going back and forth on their word with consumers which wrecked their reputation with everyone.

The reason I like to think MoviePass was a charity was they kept their unsustainable business model long after the writing was on the wall. If this is what they were after they did a great job, nobody suspected MoviePass was giving first run movies to under-income moviegoers.

The lesson here is to to validate your revenue model before your business model, not the other way around.
 
Last edited:

Create an account or login to comment

You must be a member in order to leave a comment

Create account

Create an account on our community. It's easy!

Log in

Already have an account? Log in here.

New Topics

Fastlane Insiders

View the forum AD FREE.
Private, unindexed content
Detailed process/execution threads
Monthly conference calls with doers
Ideas needing execution, more!

Join Fastlane Insiders.

Sponsored Offers

  • Sticky
MARKETPLACE Lex DeVille's - Freelance [and other] Udemy Courses
How do I pick one among so many courses? Pick the one you need most. Some just buy them all. :D
Replies
4
Views
285
Top Bottom