I pondered that a bit when I first heard about them. It must be they looked at the number of movies the "fanatic" pays to see, and the number of movies the aver

I pondered that a bit when I first heard about them. It must be they looked at the number of movies the "fanatic" pays to see, and the number of movies the average person pays to see, per year. I'm guessing they figured the fanatics would cause enough buzz about their service to convince the average person to subscribe and when enough did they'd turn a profit. They may have created a formula where they estimated those lines would cross, but at best that would be a "known unknown" and I don't see how an "investor" could fail to realize that. You either have faith that goal can be achieved, or you don't, and faith in such matters is known to be risky.