MoviePass 2.0 – What Crypto?

MoviePass is back with another hare-brained wheeze.

• MoviePass has returned to life under its original founder with an idea to create a token-based marketplace for cinema coupons but how it will attract any users outside of offering uneconomic, company-breaking discounts is a big mystery.
• MoviePass has emerged from Chapter 7 bankruptcy in the hands of its original founder Stacey Spikes and aims to deliver what it calls an “end-to-end cinematic marketplace”.
• What this is or how it will work was not made particularly clear, but I think that the use of the term web3 was clearly aimed at maximising its appeal to young investors who are keen to invest in the next big thing but have yet to be tempered by the brutal realities of the market.
• As far as I can make out, MoviePass 2.0 is yet another cryptocurrency but one that will be tradeable for seats at cinemas.
• I suspect that the reality is that MoviePass will be buying the tickets from the theatres with dollars as I think it unlikely that the theatres are going to be willing to take the exchange and credit risk of holding yet another cryptocurrency.
• Users will be able to either buy the tokens with dollars or earn them by watching advertisements.
• Users will have to look at the screen the whole time as eye-tracking will stop the advertisements from playing as soon as the user looks away.
• This is a variation of the idea that was supposed to support MoviePass’s uneconomical $9.99 per month unlimited subscription plan and remains the only viable option if MoviePass 2.0 is going to get off the ground.
• The company intends to fund itself through crowdsourcing from its users where I think it is likely to promote itself as a crypto play when in reality, it is nothing of the sort.
• Web3 refers to running the web as it exists today on the blockchain, but the blockchain is so expensive to run that only a tiny fraction of each NFT is actually on the blockchain.
• The digital asset itself normally sits at the end of a URL on a server with only the token itself being on the decentralised blockchain.
• Hence, the only part of MoviePass that will be on the blockchain will be the token itself with the app and the service itself all being hosted on traditional centralised servers.
• The alternative would be so expensive in terms of transaction cost that MoviePass 2.0 would probably be out of funds before the service even launched.
• In its first iteration, MoviePass (see here) managed to get 2m users but it did so by offering uneconomical terms such that the company lost money on every single user.
• This was not sustainable and when the company failed to finance itself through advertising, the whole venture collapsed.
• I think that this time around MoviePass 2.0 will fail to get anything like that number because it knows that it has to make money, meaning that it will not be able to offer the too-good-to-be-true deals that it did before.
• Hence, it is likely to end up being cheaper for users to buy their tickets directly from the theatres.
• Without lots of users, the marketplace will be very illiquid meaning that it will not be an accurate representation of the price of a seat in a movie theatre further reducing its appeal.
• Hence, I don’t think that this reboot of MoviePass is going to go anywhere as I can’t see where the value in this proposition is for the user.