MoviePass Impact On Cinemark? Should Investors Own AMC?

My Marcus Theaters post got some readers fired up. Fortunately, most readers understand and appreciate what I’m doing here (for free, no less — a stark contrast to what I earned as a reputed Wall Street consultant before semi-retiring in 2008).

Nonetheless, allow me to reiterate (bluntly, if not rudely) that I’m not here to hand-feed research to readers who have no Wall Street experience (nor offer any constructive contributions to the group research effort that this blog was launched to foster).

In other words, if you don’t like what you’re getting here, I suggest that simply probably getting what you paid for… but also what you’re putting into it.  ;^)

This isn’t Seeking Alpha or StockTwits. This is a forum for me to share data and collaborate in a professional manner. Of course, I welcome those who wish to simply be a fly on the wall & appreciate the sharing. I’m still doing this for you too :^)

OK. Let’s get down to business…

For the record, the MCS data point (last week’s topic) is a data point. On the surface, it wasn’t one that should have been given a lot of weight (because they’re one-tenth the size of AMC).

Screens

However, it did have value as a sign of possible things to come.

Folks, the first step to combating confirmation bias is learning how to coldly estimate how weight should be put into each data point. Keep that in mind as you read today’s post…

___________________________

Cinemark Holdings (CNK) reported Q4 EPS of $0.82 (which beat estimates by $0.34).
Revenue of $750M (+7.0% Y/Y) beat by $4.16M.

Admissions revenues increased 4.5% to $443.5M during the quarter and concession revenues rose 10.1% to $261.2M. Average ticket price was $6.72.In the U.S., the average ticket price was $7.98 vs. $7.65 a year ago. Concession revenues per patron was $3.96. In the U.S. concession rev per patron was $4.69 vs. $4.24 a year ago.

Management was ecstatic about the launch of its “MovieClub” loyalty program. CNK signed 120,000 customers in 80 days. Among other things, it gives members a 20% discount on concessions.

Speaking of which, concessions were +9.8%. Concessions per patron was $4.69 (+10.6); CNK attributed this to its internal strategic initiatives (50% of the growth), price optimization (35% of the growth), and newer/renovated theaters (almost 15% of the growth), with “other” providing an insignificant impact. This implies that MoviePass (which I’ll call MP for the rest of this post) had little to no impact on their results. Concession margins were down, lending credence to the price optimization impact.

In fact, CNK made no mention of MP. Of greater interest, none of the analysts asked about MP on the call. I got into the Q&A queue, but was never allowed in. Clearly, the company selects who is allowed into Q&A (mainly to keep the riff-raff out, but also to keep Q&A exclusive to analysts they already know).

It amazes me that some people think that sell-side analysts baked a MP impact into their theater-company models when 1) MP has still yet to penetrate 1% of moviegoers and 2) theater-company management teams aren’t even acknowledging their existence. I’ve talked to analysts and read plenty of their reports. Most don’t see MP as important enough (yet) to care and they’re certainly not going to deviate from management’s guidance and go out on a limb to “bake MP’s impact” into their models. If you don’t believe me, you can go ask them yourselves (if you’re not lazy like me… LOL).

My interpretation of all this is that the majors are going to ignore MP for as long as they can. This is consistent with the recent rhetoric from Mitch and Canaccord, both of whom have focused on MP’s opportunity with smaller studios and theater chains.

Indeed, this has been my thesis for months, but many investors refuse to see what’s been evident for awhile now. To be clear, there’s no shame in that. MP can build a nice business as a mid-market player.

However, they’re obviously going for something much more… and the expense is obscene (and I never said that about AMZN, NFLX, etc). Every opportunity has a proper level of investment. I simply don’t believe that MP has chosen the proper level for their risk/reward profile.

Most notably, even Canaccord readily admits that they will produce another ~$350 million before getting close to profitability. In the process, they seem to believe that the company can self-fund itself via their annual subscription plan. However, that assumes that customer usage drops (which hasn’t happened thus far, based on Mitch’s recent comments re:MP buying 1 in 19 tickets over the preceding 3-week period — do the math if you don’t believe me).

By the way, international concessions were also way up +11% (11.3% constant currency) Per-customer concessions were $2.46 (+7% in constant currency). There/s no MP there, so MP obviously didn’t impact the international pop in concessions. The numbers seem to show that recliners are having a decided impact on CNK’s results. Feel free to see the comments section of my last post. One of our readers was kind enough to run the math, which confirm this IMHO.

CONCLUSIONS — Many people (along with MP) have pointed to the success of Studio Movie Grill’s (SMG) partnership with MP. Indeed, SMG has attested to the success there. That is unquestionable IMHO. However, people need to consider / remember that 1) SMG is a MP shareholder, which makes them inherently biased and 2) the relationship is based on MP prominently pushing SMG to MP subscribers.

This is not something they can do for every theater. In fact, they can only put one theater at the top of their listings in any given area. That means that the SMG success can not be broadly repeated, which means that MP will have a hard time justifying a 20% partnership in the same way that they have with SMG. They can certainly win a lot of business with other assurances, but only one theater can be truly favored in any given area.

In closing, I entered the CNK call with optimism that MP had made an impact there. Even after listening to the call, I felt that CNK was suspiciously dodging the MP effect. However, once the numbers were run, it became clear that CNK (arguably the best-run major public chain) had a great quarter because they’re arguably the best-run major public chain (augmented by strong cinema-industry trends in Q4, which every theater is saying has continued here into Q1).

As a result, I added to my AMC position. They report on Thursday. I’m betting that they continue the trend of industry beats, regardless of whether Ted was right about the impact they are having there. Frankly, I hope he’s right!! I’ll be able to sell my AMC at a profit and shift the proceeds into HMNY. We’ll see…

In other news, I’ve been digging through the Canaccord report and have been shaking my head all the way. It’s simply terrible. The numbers don’t make sense and the analysis was quite weak. That shouldn’t come as a surprise to anyone who looks into the background of the author (Austin Moldow, who is still just an associate analyst at Canaccord). For more details on him, do a LinkedIn search and see for yourself.

Sigh.

I’ve traded messages and spoke live to many HMNY optimists over the past few days. In each case, I tell them that I hope they can make me feel optimistic too (I can make a lot of money if this is really a winner… but very little if it’s a terminal loser). Sadly, one-by-one, my data-points trump (and dwarf) theirs. It inevitably leads to an admission that they haven’t done all of their homework (nor analyzed the data, as opposed to just accepting it at face value). They promise to come back to me once they do.

To be honest, I didn’t expect anyone to change my mind, but I was shocked at the lack of knowledge and analysis that exists on this name. It all makes me want to short HMNY.

For now, I’m not going to do that. However, I definitely have no choice but to continue avoiding them.

 

Disclosures / Disclaimers: I am long AMC stock and hold bullish AMC call and written put positions. However, I do not encourage or recommend for anyone to follow my lead on these  or any other stocks, since I may enter, exit, or reverse a position at any time without notice. I wrote this article myself, and it expresses my own opinions. I am receiving no compensation for it, nor do I have a business relationship with any company whose stock is mentioned in this article.

The information in this article is for informational purposes only and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action.  I am not a financial advisor.  Nor am I providing any recommendations, price targets, or opinions about valuation regarding the companies discussed herein.  Similarly, the disclosure above may state that I am long or short shares of the companies mentioned herein, but should not be construed as an endorsement of any particular investment or opinion of the stock’s current or future price. That disclosure is true as of the time the article is placed in queue for publication, but it is possible (or even likely) that I might be buying and/or selling the stocks mentioned herein immediately thereafter or at any other time, regardless of (and possibly contrary to) the content of this article or this website’s timing of its release.  The disclosure will not be updated following submission of the article and may be inaccurate thereafter.  Likewise, any opinions are as of the date of publication, and are subject to change without notice and may not be updated. I believe that the sources of information I use are accurate but there can be no assurance that they are.  I wrote this article myself and I receive no compensation for writing it.  All investments carry the risk of loss and the securities mentioned herein may entail a high level of risk. Investors considering an investment should perform their own research and consult with a qualified investment professional.

Long-time readers should note some significant changes in how I communicate in the public domain. The sole purpose of this forum is now to attract new contacts with professional industry expertise to share research and receive feedback (confirmation / refutation) regarding my investment theses. Accordingly, this document should not be construed as an endorsement of the companies or securities discussed herein. The disclosure below is critical to understanding the content of this document. Further, I frequently trade my positions and may buy, sell, or short the securities mentioned herein at any time, regardless of the facts or perceived implications of this article.

30 thoughts on “MoviePass Impact On Cinemark? Should Investors Own AMC?

  1. Thanks for the article. I was a little surprised non of the analyst brought up MP in the Q&A.

    By the way, do you need premium access to actually read the analyst reports, in this case Canaccord?

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  2. I’m guessing we will see no surprises with AMC. This is all pointing to why the big chains are ignoring MP (for now??), nothing points to an impact on their business.

    The only data that would change my mind would be the attendance before/after the removal of the 10 AMC locations but no way we will see that unless AMC wants to fire back at MP.

    Sure everything might be great 5-8 years from now when MP has critical mass. I just don’t see a way to get there without running out of cash.

    Not looking good.

    Thanks for the note on the Canaccord report, confirms what I expected (I checked out the guy last week).

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    1. For the record, I don’t believe that there’s NO impact. I just don’t see the kind of impact that matches what they expected, based on what they’ve articulated to the public. The numbers just don’t line up.

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    2. For the same reason, I don’t see how 5-8 years will make a difference if we have 35 million people in this country that go to at least one movie per month. They are a boat anchor on their operating model and hopes for profitability (and the people most likely to sign up for the service… and the people most likely to renew at a higher rate). So movie pass will have to work harder and advertise more to the people they want to attract while simultaneously having a hard time keeping the people they don’t want to attract from signing up and staying on board.

      They tell us that they want to see increased usage, and to an extent I believe that because that would prove that they have an impact on consumers behavior. However, if they entice me to go to one extra movie, I have just spent an extra $10… And how do they recuperate a whole $10? Even the Wall Street reportShows them recuperating no more than 30% of their subscription revenue via third-party relationships. So every extra movie they convinced me to see will cost them seven dollars of profit.

      And when I beg people to come forward and debate me on this with logical arguments, all I hear are crickets.

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      1. My viewpoint on 5 years away is that say MP gets a significant portion (25-35%?) of the 4-6 movie a year population and doubles their attendance. This would be at little to no cost to MP when factoring in the yearly subscription. In fact it better be positive revenue if MP can get to 30% of each ticket either being at a discount or additional third-party revenue. Yet the chains and studios would now have their attendance lifted and that profit would go away if MP went away. It would be the stick instead of the carrot.

        You, me, and actually all of my friends who have MP, are perfect candidates for this. Everyone I have talked to has gone to on average 1 movie a month now with MP. Some maybe 2 a month and one friend I had dinner with last night went ONCE in four months after subscribing. Why do you think MP has to recoup the whole $10 on a extra ticket when it averages out over the year? If MP doubles my attendance (which it has thus far), I’ll go to around 12 movies a year, $120. MP sub is $120. If they get the 30% reduction in cost due to revenue and deals they would make around $30 on me per year.

        I have not met one person like those on Reddit or those writing up reviews who say “I went to 20 movies this month, all on MP, haha suckers!”. Not that they don’t exist but I don’t think it is as big of a population as we think. I have to believe if this type of subscriber was bleeding MP dry they would do something about it sooner rather than later don’t you? They would really let the whole experiment come crashing down and not curb the behavior when they have already updated their ToS to allow them to do something about it?

        It is the same answer to what you question above. I don’t think I can say anything to convince you when Mitch hasn’t already. And don’t get me wrong, I’m not sure I’m convinced either. Mitch said in one of his first interviews the person who currently goes ~6 times a year is where their bread and butter is, not too low to cancel their subscription, not too high to be a net loss and still be able to influence their attendance. They wouldn’t have been able to get these type of subscribers without the $10 price point.

        He has been hitting the consumer influence point hard in recent interviews (re/code) and has also been focused on trying to set expectations that their first goal is to break even. He keeps saying the numbers look good and everyone is overestimating the impact of heavy movie goers on the service.

        Getting lost in the attendance and concession numbers honestly misses out on the game changer in this service: CONSUMER INFLUENCE.

        I honestly haven’t cared that much about theater chains and I still don’t. I’m not ignoring the impact of the current analysis of their ER numbers as we should be able to get meaningful data. But the money and future of MP is with the studios/distributors and accurately targeting the correct audience and driving dollars. I couldn’t care less if AMC sells more popcorn, we aren’t going to get a cut of it anyway and I believe that is Mitch’s standpoint as well (at least in the short term).

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        1. GREAT post!! I think we are of the same mind on this. There ARE scenarios where they win.

          However, to get there, the blended average utilization rate has to work, not just the utilization rate from the in frequent users.

          The math tells me that the infrequent users are a much higher % of MP customers than their proportion of the U.S. population. That’s why I am not bullish on MoviePass.

          The more in frequent users they get, the better. But it has to be enough to offset the unprofitable utilization of the frequent users. I’m not sure they can overcome that over any timeframe, because there are 35 million frequent movie goers.

          Just run some scenarios on the penetration rate between frequent and in frequent movie goers. Then you will see that it’s going to be a challenge for them to get the customer mix a place where the blended average utilization rate becomes favorable for the company.

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      2. You and I could sit down for 30 minutes and make a decent list of 20 or 30 things MoviePass could do in the future to make money that they are not doing today. I can think of a half dozen things they could do tomorrow to improve their profitability if they would accept slower growth. If we spent several hours or days on it, I bet we could make the list even better.

        The crickets you refer to is because your data points do not include any of the things that would be on our list as the company moves into the future. Why? Because it is true that we can’t measure what we don’t know to measure, but I think we do know there will be other things to measure moving forward.

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        1. That’s VERY true. However, they are very much on record with regard to what they are focused on for now.

          The low hanging fruit will take them years to penetrate to the level necessary to make additional opportunities attractive to pursue. Virtually any company can expand in more directions. The problem is that none of those directions are more attractive than the one they are currently trying to traverse.

          This is why Amazon doesn’t dominate EVERY category of retail yet. They’ve spent the past 20 years working their way through, one major opportunity at a time.

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      3. I am not really talking about expanding in many directions. Just talking about things that are in line with what they are doing anyway. Not saying they will do anything specifically because I really do not know, but a few easy things that come to mind: Raising sub prices $2, adding imax/3d plan, family plans, couple plans, etc. all could potentially be more profitable or not depending on how they do them. What if they limited the # of movies to 4 per month? Would anybody cancel over that? Doubt it because the guy who goes 20 times a month still gets the first 4 for $10. Just things like that come to mind. These are really simple things that even a guy like me can think of.

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        1. I’m sure they are testing most of those things in small regions. That’s standard practice in businesses like this. That’s basic price and assortment optimization. Smart of you to think of it, but already being done.

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      4. Ok. Now add an updated app that allows subscribers and non subscribers to download and use it to see trailers, movie reviews, show times, and to buy tickets. If you are a subscriber, why use Fandango now? How many non subscribers would gravitate to the app too? Then add the ability to advertise on the app. We already know that uber and lyft are getting more business as a result of people in metro areas going out to see more movies. Maybe restaurants too. Will they pay to advertise? Who else would advertise on their app? How much of the movie advertising budgets can they get? What can they do with MasterCard to generate money? Can the app access an online store for things related to the movie they just saw? How does all of this look at 5, 10, 15 and 20 million subscribers? At what size do they have enough influence to get some discounts from the exhibitors? None of this is going in different directions. These are all very achievable revenue streams within the scope of what the company is doing. Will they do it? I don’t know. Can they? Maybe. What if it costs 1 billion to get to 20 million subscribers? Does that create enough value to be worth it? I have more ideas, but my point is that thinking about this operationally, I do see more opportunities to cover that $10. The market they are going after is massive and they are connecting with millennials that the cinemas were struggling to reach.

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        1. The development effort you are describing is immense. However, this is a good point that warrants consideration. Have to calculate the expense to develop, market, and compete with the big guys. It’s not impossible, but they’re already approaching 100M shares outstanding. If the X, X, Y framework I described in an earlier comment doesn’t right itself, they could have 300M shares outstanding before they get to that point (likely more than 5 years away) such that even a $3B valuation would only yield a $10 share price. Not a great reward for success on such a risky asset.

          But that’s just conjecture. Gotta do some real research and run some real numbers on this.

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      5. Very true. And another thing. When I consider Sinemia has 22 million subscribers along with the opportunities I see for MoviePass, it starts to look to me like there can be a way forward. I also wonder what more competition to MoviePass might mean to how the exhibitors eventually feel about cooperating with MoviePass? Maybe I am missing something, but I just can’t imagine how any individual chain can do a sub service that will compete.

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      6. Agree. So getting sub revenues up and utilization down closer to break even can be done. Getting 3rd party revenues coming in can be done. Putting a value and a timeline on those would be useful.

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        1. Yes, it “can be done”, but I can’t model it because the numbers are showing that it’s unlikely to actually occur. Specifically, it WON’T occur unless something about the utilization curve changes. It’s staying too high for too long, suggesting that the average customer will settle into a higher level of usage than originally predicted.

          Remember, almost everything these guys of been talking about are based on their predictions of what would happen. They’re thinking with sound and I bought into it. There is no trick or deception in that. However, none of us thought about the specter of 35 million frequent moviegoers being the primary buyer of the service.

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  3. Another quick thought, look at all their recent activity: Buying their own movie, promoting indies and even their secret test on the award nominees. They are here to prove that they are the influencer. I believe your argument is that makes them a niche player. The counter argument to that would be well, sure, for now. They have to start somewhere. Look at how studios are scared to compete with their rivals on various weekends for releases. What if they didn’t have to be uncertain?

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    1. That’s all true. I factored all of that into the Boullet side of the argument. There IS influence. The problem is that the numbers don’t show significant enough influence to justify their investment, nor offset the losses from the blended average utilization rate issue.

      This is where the balls get it wrong. I understand the bullet points and they are correct. The problem is that they are not significant enough to offset the negatives. YOU HAVE TO RUN THE NUMBERS TO SEE THAT.

      …and yet, I have yet to meet anyone (besides myself) who has done that. Instead, people are taking the company’s assumptions (and Canaccord’s numbers) at face value, instead of running them through the calculator to see what’s actually happening out there!

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    2. Assumptions are only good if they play out that way in reality. And the Canaccord report is an abject joke written by an associate analyst who has virtually zero credentials for doing so (but LOTS of incentive).

      I think my next post will be a public challenge for ANYONE to debate me on this. Maybe SOMEONE out there has actually done their homework and come up with a different answer than I have.

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      1. I don’t think you will get a different answer, there isn’t one. Good luck if you find one! There is literally ZERO proof of a bullish thesis right now.

        I only stay invested because I’m letting my profit from the first run ride, I’m getting interest on my shares and I believe Mitch might still pull some magic out of his hat that will at least temporarily spike the SP.

        I knew the Canaccord report was going to be horrible which is why I said so earlier but you said to give him the benefit of the doubt before reading 🙂 I mentioned multiple times that the clear conflict of interest for Maxim and Canaccord discredits any report or PT from them in my mind.

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  4. Totally agree, the blended utilization is the magic number and then combine that with their influence and you have a winning company. Honestly any other analysis doesn’t matter or isn’t nearly as significant. They are are either going to succeed or fail based on their utilization numbers. I just have to believe they are either closer than we think or have a clear path to get there. They either:
    A) Keep powering forward with growth as it is shifting the utilization in their favor.
    B) Cut cost by eliminating or increasing rates for heavy users

    They very obviously are doing (A) if they shift to (B) and can’t get more funding I will start to be very worried. They could have some crazy other options with partnerships with studios, more cost sharing, bulk ticket pricing etc… but those are all wishful thinking at this point. They have to do it on their own.

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    1. I provided a simple framework for one by side analyst I spoke to last week. Think of subscription revenue as one number, customer utilization as another number, and third-party revenues as the third number.

      The original thesis was for them to bring in roughly X from subscription revs, pay out roughly X in theater tickets (roughly break even), and get their profits from collecting Y from third parties.

      Canaccord says Y will equal roughly 0.3X. If we go with that assumption, the company can be very profitable.

      However if revenue from subscriptions turns out to be 0.8X instead of X and customer utilization turns out to be 1.2X instead of X, they will never make a profit unless Y turns out to be 0.4X instead of 0.3X. Make sense?

      Sadly, so far, sub revs are around 0.8X vs the original thesis, utilization is around 1.8X (if you run the numbers, which nobody except me seems to have done), and of course Y is an insignificant-but-growing number that needs to quickly rise to the offset that nasty difference between sub revs and utilization.

      It’s just simple math. It started that way (and I was bullish because of the inputs) and remains that way (and I am worried because the inputs are coming in worse than the original thesis predicted)… and that’s why institutions / VCs aren’t stepping up to invest without a major discount PLUS warrant coverage.

      Man, offer me that $5.50 deal and I would have given them half a mil without thinking about it. THAT was a no brainer for the institutions. Sell the stock and keep the warrant. Money.

      Of course, what does that say for the entity (HMNY) who offered that deal?

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      1. Yes, the formula is quite simple and I agree that is all it comes down to, I studied a lot of math in college and this one is easy enough for a 8th grader to figure out 🙂 The sub rev is pretty easy to guess based on growth and the Costco and recent $7.99 MP/Fandor deal. I agree there isn’t anything secretive there and all those deals to front load subs and revenue brought us down to 0.8x rev input (which I agree with)

        I believe you are getting your 1.8x utilization based on the funding that HMNY has explicitly said has gone to MP and also the comments from Mitch on the amount of money given to AMC, along with the subscriber count and the most recent Re/code comment they are buying 1 in every 19 movies.

        I don’t want (or think) you should share your full calculations on utilization, I know you have hinted at it. That is the magic number. But here is a counter argument for you, your calculations are based on only publicly available data (unless you got something from the Canaccord report). Do I think they are close, yes but I have a feeling they are lower.

        Per Mitch in recode: “Over time, it actually works out to be about one movie per month per subscriber.” .

        Per Ted: “When a reporter writes, “I love MoviePass, I went to eight movies last month”. An average person doesn’t go watch eight movies. When a person reads that article they immediately think; “Everybody must be going to eight movies a month, or twenty movies a month” It’s just simply not true. People basing their judgement on a small sample size that is only anecdotal is a big portion of this misunderstanding. We are working on ways to show our data to people to help clarify the MoviePass vision”

        Maybe we are at 1.8x but all I care about is if we have crested the hump and are going lower instead of higher

        I would have loved the $5.5 deal as well. Hell, I would have loved to have bought back in at 5.5 instead of putting my profits back in at $10.

        Per your last question, I think Ted speaks for himself on that deal:

        “We could have raised a lot more money but we shut it off at 105M. And that’s a decision that Mitch and I made together. Believe me, we tried to raise it at a higher number but we weren’t able to.” … “I would not be diluting myself by 100% if I did not believe it in every bone and thread in my body that this could be a multi-billion dollar company.”

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        1. 1. My calculations are based on EVERY bit of data I could find and done via multiple methods to triangulate and confirm.

          2. Per Mitch in recode: “Over time, it actually works out to be about one movie per month per subscriber.” THAT IS JUST A HYPOTHESIS. The reality isn’t playing out that way. They gave me the month-by-month hypothesis several months ago and those numbers are not playing out so far. His hypothesis is broken (again, so far) and I suspect that it’s because the frequent moviegoers are a higher percentage of the customer base than they expected. This is the key fly in the ointment IMHO.

          3. It has to go a LOT lower, but Mitch said it himself — “89 percent of American moviegoers only go to four or five movies a year. When they join MoviePass, they double their consumption and go to about 10 a year. That’s a little bit less than one a month. They balance out the 11 percent of the population that go 18 times before joining MoviePass and then after go three times a month.”

          Do the math on what happens if frequent moviegoers turn out to be 50% of the long term base (which is very likely in my opinion — they HAVE BEEN signing up earlier and will surely renew with greater frequency, since they are getting the most value).

          4. Of course they could’ve raised a lot more than $105 million. That deal was incredible. The problem is nobody was willing to give them a better deal.

          Based on the laws of price elasticity, if they could raise more than 105 million at that price, they should’ve been able to raise exactly 105 million at a higher price. But they couldn’t, because nobody’s willing to give them money and anything short of incredible price.

          5. They raised at least $25 million more than they would lead us to believe they need in the coming six months. If they believe in the business, why wouldn’t they raise less money now and then do another raise in six months, when their valuation would presumably be higher?

          Too much of this makes too little sense.

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  5. Mark – I’m curious about your thoughts on this. Moviepass has currently removed any option for signing up monthly, so the current cost of entry to MoviePass is somewhere in the $105 range.

    While this is great for bringing in funding immediately, do you think that this could have a negative impact on their explosive growth? The low barrier to entry ($10 a month) was a huge factor in my opinion to their growth. It was however, also a massive liability as people could sign up, binge on movies and then cancel if they didn’t care about the 9 month penalty period (or didn’t simply have a different email).

    If MP can’t reach 2.5, 3, then 4 and 5 million subscribers as quickly, doesn’t this completely dissolve any potential leverage they have when trying to “negotiate” for deals? If that’s the case, why would they hurt themselves by removing the month to month option? Were these users costing them too much money? Did they need the immediate funding?

    These calls are very interesting to me. I look forward to AMC reporting, and your thoughts on that.

    PS You can delete the anonymous comment that I left. was having trouble logging in.

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    1. This is good news for the exact reasons you outlined (eliminates short term users and brings in upfront $$$). Months ago, I lobbied for them to do this.

      People have been too fixated on exponential growth. They can’t have growth at ANY cost. I was happy with the original plan, which only called for 2 million in year-1, but that plan has gone off the rails along multiple dimensions.

      This moves them back onto a more logical path. Not enough to make me bullish, but a step in that direction.

      Like

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