[smacktoward]

The play is to get enough users fast enough so that MoviePass sits between the theater chains and a big chunk of their customer base. Once that happens, MoviePass can start squeezing the theaters to discount the prices MP pays for tickets with threats of taking their theaters out of the MP system if they won't. If the MoviePass user base is a big enough fraction of the overall theatergoing population, the theaters will have to accept whatever price MoviePass offers them for tickets or risk losing access to their customers and kneecapping their business.

This is a long-term, Amazon-style play: burning capital up front to establish a commanding market position, at which point you can start raking it in by charging monopolist rents. But it assumes you can build a big enough user base to start dictating terms before you run out of capital, and if you can't, the whole thing falls apart pretty quickly.

[dingaling]

Other than in the very early days Amazon wasn't burning cash; they very rarely went to the market for equity and were self-funding very quickly. They didn't post profits for a long time because there was no point, they used the margin for growth instead.