Consider a hypothetical scenario where Moviepass has 100 customers. Let's say the net revenue per month for 60% (60 customers) is $10 (i.e. 60% subscribe to mov

Consider a hypothetical scenario where Moviepass has 100 customers. Let's say the net revenue per month for 60% (60 customers) is $10 (i.e. 60% subscribe to moviepass but never see a movie). That's $1000 a month in profit to 'play with'. If the average movie ticket is $10, that means they have 100 movie tickets of budget to spread among the remaining 40 users to break even. Divided out, that means each user can only see 2.5 movies a month before Moviepass starts losing money. There are a couple takeaways from this (admittedly simplistic) analysis: 1. Moviepass seems to need a very high percentage of user not use the service in order to have any chance of profitability. There's just too much 'downside risk' from heavy users otherwise. That's a bit of a 'product smell' to me; you generally want o have usage of your product to have some positive correlation to your profitability. 2. Even if they strike deals with the theater chains, they're going to need to negotiate fairly steep discounts. Even if Moviepass only has to pay $5 per movie, that still only lets users see 3 movies a month, which is less than one a week. Are theaters inclined to reduce the price of a ticket to $0? It might work then, but I don't see why theaters would torpedo their average selling price (ASP). 3. Wrt performance marketing, moviepass better be selling ads to mesothelioma lawyers (~$300 cpc). I can't think of any organization that would pay enough to offset the potentially massive loss per customer. Moviepass screams of selling $10 bills for $5. That in itself isn't necessarily bad, but to me it doesn't look like they have a way to bootstrap themselves out of this model.