MoviePass is losing money on basically every customer. Should you care?
The movie subscription service costs $9.95 a month, and lets you watch one movie in the theater every day. The problem here is obvious: two movie tickets are enough for MoviePass to lose money, and that’s before the cost of actually running the service.
YouTuber Evan Puschak outlined this bizarre situation in a video last week, and it’s well worth viewing:
MoviePass’ strategy, such as it is, is to grow a massive userbase with low prices, then find a way to make money later. If that seems stupid to you I’ve got some bad news: the modern web is basically built on this strategy.
Sure: most sites aren’t charging $10 a month for nearly unlimited movie tickets. But plenty of services—including Trello, Dropbox, and Evernote— offer limited free versions that lose money in the hopes of finding a profitable group of users later.
Plenty of companies are burning money; MoviePass is just doing it faster. I’m not saying you shouldn’t use such services, but it’s worth thinking about—especially if you’d like the services you use to keep running.