The Death Of MoviePass...

[PizzaOnTheRoof]

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.​

 

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[Merging Left]

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]

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.

 

[Guest12120]

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

It's not hard to be a disruptor when you sell $20 for $10

 

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[Dignium]

It's not hard to be a disruptor when you sell $20 for $10

It shows the belief system of those in charge of Moviepass.

 

[100k]

View: https://www.youtube.com/watch?v=QvCkp3rfgOU