Fascinating to compare $HMNY
's MoviePass to other media subscription businesses -- $NYT
Music, and Spotify ($SPOT
MoviePass's costs increase sharply the more a subscriber uses the product, because MoviePass pays the movie theaters for tickets. So the more its customers use its product, the more MoviePass loses money.
That's a bizarre dynamic which doesn't exist with other media subscription businesses like $NYT
Prime, or $MUSIC
has zero marginal cost of usage as it owns its articles, and more usage leads to more ad revenue. $NFLX
Prime don't pay enough for movie licensing that increased movie consumption imperils the long term profitability of the business model. Same with $AAPL
Music and Spotify. For all those businesses, increased usage leads to a higher renewal rate, so the more their customers use their product, the more money they make.
On the other hand, $HMNY
believes their data suggests that usage will stay low, lower pricing will lead to massive subscriber growth, and that they can cross-sell subscribers to other, profitable products, as discussed in Mark Gomez's interview: https://seekingalpha.com/a/2g2d0