MoviePass Parent Company Files for Bankruptcy (variety.com) 31
Helios and Matheson Analytics, which owns the defunct MoviePass cinema-subscription service, has filed for Chapter 7 bankruptcy protection. From a report: The company disclosed the move in an SEC filing dated Jan. 28, when Helios and Mathenson filed the petition for Chapter 7 bankruptcy in the U.S. Bankruptcy Court for the Southern District of New York. Chapter 7 of the bankruptcy code dissolves an entity, whose assets are sold off to repay creditors (unlike Chapter 11 bankruptcy, in which a company seeks to renegotiate with creditors). In its bankruptcy filing, Helios and Matheson listed the estimated value of assets at between $1 million-$10 million and $60.9 million in total creditor claims. The bankruptcy filing comes after MoviePass in September 2019 notified remaining subscribers that it would be shutting down indefinitely because "its efforts to recapitalize MoviePass have not been successful to date."
Train Wreck in Slow Motion (Score:1, Insightful)
Re:Train Wreck in Slow Motion (Score:5, Insightful)
I don't understand what happened.
Buy movie tickets at full price and sell them to customers at a lower price.
What could possibly go wrong?
Re:Train Wreck in Slow Motion (Score:5, Funny)
I don't understand what happened.
Buy movie tickets at full price and sell them to customers at a lower price.
What could possibly go wrong?
The obviously failed to make it up with volume
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Overestimating how many people would sign up and not use it.
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This is covered in a Spectacular Failures podcast [spectacularfailures.org]
Mission accomplished (Score:5, Insightful)
Owners made $60 million. On to the next idea. Go fast. Break things.
wow no one saw that coming (Score:4, Insightful)
Their business model just seemed so sound.
Sell subscriptions at a loss
Keep changing the terms
Lose money until they go IPO or get acquired by deep pockets
Sounds like a lot of businesses out there
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Their business model just seemed so sound.
Sell subscriptions at a loss
Keep changing the terms
Lose money until they go IPO or get acquired by deep pockets
Sounds like a lot of businesses out there
I think their business model was what many companies' business model is these days: sell data. The tickets were just a way to get users to give up their data. They just couldn't stay afloat long enough to get enough data or get it monetized.
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That's only the public business model.
The real business model is:
Offer unsustainable product and/or service so owners can run off with investor money and get rich quick.
Face it, that's the real business model of a lot of companies - just get rich quick. After all, the public facing business model was a fail if you ev
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There was also a 1(a): sell discounted subscriptions to Costco at a further discount. I purchased two subscriptions from Costco at 30% off the already-discounted face value of the pass. My movie-fanatic family members used them to attend ~20 movies before the thing collapsed, making it a big win for us. How selling discounted items to one of the hardest-bargaining discounters in the US was supposed to further the scheme was a bit of a puzzle.
The Theranos of movies (Score:1)
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Re:The Theranos of movies (Score:5, Interesting)
Reality is most of it was hubris. Theaters are largely owned by the same few companies so you don't get to dictate terms to them; in fact it's so much easier for them to build MoviePass, like CineWorld is doing, since they own the supply chain. As for data, very few companies have made data profitable for them, outside of Google/Facebook/etc. Everyone keeps talking about the value of data, but in practice it's just really hard to monetize; data can easily help you improve on a business, it doesn't mean you can make it your whole business.
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So, like healthcare for movies? Walk up to the ticket booth and, "That'll be a $25 copay". You reply, "but the movie was $15 when I just bought movies. What are you charging my Movie Insurance anyway?". "Sorry, we can't tell you that. That's proprietary information".
Big difference (Score:1)
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Well, the owners came off rich... (Score:2, Interesting)
It is funny how many of these companies pop up. They come up with an unsustainable business model, which early customers enjoy, but it won't get revenue. Then the investors get frumply and demand stuff be done for revenue. Changes happen, customers leave, investors cut their losses, and the whole mess heads to the bankruptcy courts. Of course, the C-levels are doing quite well, as they made some huge salaries and don't care one whit about what they dumped on the taxpayers.
Sometimes I wonder how many of
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How do you launder money with a corporation? With a small business you can claim cash sales that never occurred, write receipts for them, and pay taxes. But how would you do that with Moviepass, where sales are done with credit cards, and all transactions are logged?
It was worth trying (Score:2)
Re:It was worth trying (Score:4, Informative)
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No, it was impossible to win as they were battling against the people who actually play the movies and seat the people.
Oh, it's over (Score:2)
The conversion factory for turning VC money into huge discounts on movie tickets is at an end because they couldn't find any more VCs that wanted to donate to the cause of paying for $9 of the $12 for me to see a movie.
Why??? Why don't any more people want to put their money into this???
Sam
I tried it... (Score:2)
My daughters bought me a subscription for my birthday. I think I went to two movies and told them "thanks, but cancel it, please".
Greater fool theory in action (Score:1)
Dotcom Bubble 2.0 Strikes Again (Score:3)
The only reason we're not seeing more of these bankruptcies is...well, there's two reasons...the crazy economic expansion and the cloud.
Instead of pets.com and VA Linux (look them up, kids :-) ) hawking IPO shares on CNBC to clueless day-traders, Dotcom Bubble 2.0 appears to be more about using low interest rates to entice VCs to throw money at even the stupidest ideas. When you have $20 billion sitting in an investment fund, and the bank isn't paying a lot of interest, well, you can afford to lose a couple billion here and there it seems. Look at how SoftBank just sort of swept WeWork under the carpet, and gave that Neumann guy a monster payout to just disappear and never come back.
The other thing is that startups are "born in the cloud." This means the VC's platinum card is used to fund day to day operations, not a massive loan to buy a multi-year contract in a colo or build data centers/buy hardware. This explains why Bubble 2.0 has a ton of copycat services. I think there are still at least 5 home meal kit delivery services, a few ride sharing services, subscription box-of-junk services for every possible niche market, etc. Companies can just hang on longer if they're renting cloud services rather than laying out millions for hardware. It also leaves a lot more money lying around for founders' private jets, zany office furniture and elaborate product launch parties. It just takes longer for them to burn through their money and the VCs seem much more tolerable of stupid or me-too ideas.
We'll see what happens...I personally think this is the tip of the iceberg and they're just culling the really dumb ones like MoviePass, WeWork, etc. The dumb-yet-functioning ones will limp along as long as the money holds out, some will try to IPO, and others will get bought by a FAANG.
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Industry shift (Score:2)