For months now, the tech nerd community won’t stop talking about MoviePass, and I’m sick and tired of hearing about it. Can MoviePass just die already?
MoviePass Gets Way More Coverage Than It Deserves
Everybody is talking about a service that had almost no users until about a year ago, when they dropped their prices to stupidly low levels, and suddenly went from 20,000 to 3 million users.
Movies cost about $10 each. MoviePass was offering unlimited movies for $10 per month. When you’re losing money on every customer, the more customers you have, the more money you lose. The math isn’t hard: MoviePass + Unsustainable Pricing = Bankruptcy.
It didn’t take long for everybody to get really mad, and scream about how MoviePass wasn’t able to keep their unsustainable business model running. So then they started messing around with their pricing, and started adding limitations, and basically took the service from an unsustainable joke to an unsustainable joke that everybody was mad at. And everybody is writing articles about MoviePass, all the time. To be clear, we’re guilty of it too. But they don’t deserve all this coverage, positive or negative.
The only thing they’ve done that’s unique is run their business directly into the ground.
MoviePass is Going to Die
HMNY, the parent company of MoviePass, has had their stock in a free-fall, losing 99% of its value, and then doing a 250-for-1 reverse stock split to keep the stock out of the pennies and stay listed on the Nasdaq—and then it immediately plunged another 50%, and will probably head to zero at some point.
If that wasn’t bad enough, in the last week, MoviePass has run itself completely out of money, couldn’t pay their bills, had to borrow emergency financing, and couldn’t pay their payment processors so the service stopped working for a while.
They are going to die. It’s only a question of when.
Calm Down Already and Laugh at MoviePass
Startups die all the time. Most of them don’t get off the ground in the first place. If somebody comes out with a Kickstarter selling rocket-powered donkey launchers, it’s probably not going to ever ship despite the huge demand for aerodynamic donkey flight.
The only thing MoviePass did was take a product almost nobody wanted, lower the price until they were essentially paying you to go to the movies, and then fail to live up to their ridiculous promises.
The investors should be mad. They got screwed. But the users? Hey, it was fun while it lasted. You got to see your favorite superhero movie 13 times in a week for a whopping $10.
Free and Unlimited Is Never a Sustainable Business Model
It’s too good to be true.
You get what you pay for.
There’s no such thing as a free lunch.
Somebody has to pay the bills. If it’s not you, the customer, it’s usually an advertiser, and “you’re the product“, but that’s only because the advertiser is assuming that they can convince you to pay them for their product. Even if another free product is the one advertising to build their business so they get more ad dollars, at the end of the chain somebody needs to cough up the money.
If there are no advertisers and you’re not paying a sustainable price, the product is going to go out of business or get sold to another company that will change the pricing or introduce advertisers.
So the next time somebody comes out with a ridiculous service that saves you so much money that it sounds too good to be true, sign up for it, and enjoy the free money while it lasts. Just don’t complain when it ends.