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re: MoviePass Lost $150 Million in 2017
Posted on 4/18/18 at 8:43 pm to Green Chili Tiger
Posted on 4/18/18 at 8:43 pm to Green Chili Tiger
Their business model is nonsensical
Posted on 4/19/18 at 7:50 am to TheWalrus
Isn't it a credit card?
They just have not realized profits yet. The way deals like this work are you approach the card company and promise to bring them x number of clients that will spend x number of dollars per year. card company says ok, we will give you x percentage of whatever your client base spends per year, after they hit thresholds. The movie pass client base has not hit the threshold yet, and depending on their rebate agreement with the card company they could be in store for a windfall of realized and recurring profits at any point in the near future.
FWIW, their income model probably has nothing to do with monthly subscription fees or movies. It's all based on the size of their consumer base and how they can sell that buying power to different entities. They could very well lower the monthly fee if they know how to negotiate deals properly.
They just have not realized profits yet. The way deals like this work are you approach the card company and promise to bring them x number of clients that will spend x number of dollars per year. card company says ok, we will give you x percentage of whatever your client base spends per year, after they hit thresholds. The movie pass client base has not hit the threshold yet, and depending on their rebate agreement with the card company they could be in store for a windfall of realized and recurring profits at any point in the near future.
FWIW, their income model probably has nothing to do with monthly subscription fees or movies. It's all based on the size of their consumer base and how they can sell that buying power to different entities. They could very well lower the monthly fee if they know how to negotiate deals properly.
Posted on 4/19/18 at 3:22 pm to TheWalrus
quote:
Their business model is nonsensical
If their source of revenue was strictly from subscribers I would agree with you; however, I see them using these cheap rates to gain popularity so they can make money off of (as someone else pointed out) selling data and going public. Wall street trading is where the money is made.
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