“We Know All About You” – MoviePass Is Secretly Tracking Its Customers’ Movements
by Tyler Durden
ZeroHedge.com
Sat, 03/10/2018
Anybody who bothered to look at MoviePass’s business plan would’ve immediately been confronted with the fact that the business was doomed to fail – barring some king of pivot that would bring in badly needed revenue for a company that buys movie tickets for $10 then sells them to its “customers” for 33 cents…
Just to put this problem in perspective, lets apply some math to this case study on how not to run a business. Lets assume that each of MoviePass’s 400,000 subscribers decide to see 2 movies each week (they’re entitled to one movie pass a day…but lets just assume they only use 2 per week) at a cost of $10…that’s a total cost of $32 million each month. Now, each of those subscribers are paying $10 per month for their service which means MoviePass is collecting $4 million in revenue and burning $28 million every single month or $336mm per year…and that doesn’t even count their staff and other overhead expenses which we’re sure are considerable. Does that sound like a business plan that might be of interest to you?
As we said when we first wrote about the company in October: Who knew that massive cash losses could be detrimental to the health of a business?
After the company revealed in January (in response to an inquiry from an incredulous customer) that it had ended its relationship with AMC, critics of the company were waiting for the other shoe to drop…
But earlier this week, the company hinted at how it might see itself recouping all of this lost revenue. It’s a tried-and-true method in Silicon Valley: Harvest all of the user data you can – transparency and customer service be damned.
MoviePass CEO Mitch Lowe revealed as much during a talk at the Entertainment Finance Forum this week, when he coyly informed his audience that “we [MoviePass] know all about you.”
Huh? That’s right: Though, as TechCrunch pointed out, there’s nothing in the MoviePass user agreement authorizing it to collect such extensive reams of customer data – the company is apparently doing it anyway, as its CEO openly admitted.
“We get an enormous amount of information,” Lowe continued. “We watch how you drive from home to the movies. We watch where you go afterwards.”
The Rest…HERE
