"How Long Can MoviePass Keep Burning Cash?"

How Long Can MoviePass Keep Burning Cash?
How Long Can MoviePass Keep Burning Cash?
How viable is MoviePass? Those predicting the company would be crushed under the weight of its own "buy all the movie theater tickets you want for $9.95 a month" business model may be disappointed so far.
Cobi Noblin

Thanks for sharing. I've been wondering about this for awhile.

Francisco Ordonez

Yeah, it's going to be very interesting to see how this unfolds for them, particularly if you consider that now they're investing in indie film, which turns out to be the type of film that Moviepass users most frequent. http://deadline.com/2018/01/moviepass-film-finance-moviepass-ventures-su...

Vitaly Kozlov

That concept is a bad investment. New generation is not going to movies. Everything is on phone or at home on line.

Mark Sonoda

they are banking on the massive amount of user data they are collecting from their subscribers. When I was at one of the studios, we spent ten of millions on user data, audience test screenings and social media metric data. They could make a serious amount of revenues from pushing back all that data in to quantifiable reports that the studios will pay handsomely for. No matter what new format comes or goes, movies will allows be part of the societal landscape, the ability to read the trends and the data behind those trends is what will lead to being ahead of the game.

They are burning through cash, but the group they are partnered is a top 25 hedge fund that is not going to run out of money any time soon.

Francisco Ordonez

Yeah, have to agree with Mark. That's what they're banking on. Mark, what's your take on their success with investing in independent films?

Mark Sonoda

they are hedging with that move. They are gonna pick up indie titles and force the hand they already have with some of the smaller exhibitors. They will ask for larger takes of the B.O. on those movies, which really only hurts the filmmakers that agree to allow MP to acquire their rights. They are going to use the whole "we can get you in a larger theatrical release structure" because of their subscriber count, which will be an ego play that will work with several indie filmmakers that don't see the writing on the wall. They will cash in on those films, while trying to appear that they are the "savior" for the indie film. Its similar to the build play that Netflix deployed when the first launched SVOD, they build up their library with anything possible to sell the value of subscriber-ship and then once cash flows were up, they flipped into original content, along with the fact that for the past 4 years the writing has been on the wall that Disney, WB and Hulu were gunning to cut at Netflix'a member base.

As for MP, they are playing the "land grab model" hoping to convince Wall Street and hedge funds that their worth the long term play. once someone gives you 300 MM+ in cash flow, your success or failure is really irrelevant to the top players in the company, cause they had to sell off some of their equity ownership for that money, which has made them rich. If it fails, that's sad but they already self created their golden parachute.

Francisco Ordonez

Mark, thanks. I know this is your arena. Really appreciate you taking the time to share your knowledgeable insights!

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