I assumed their plan was to have such great volume that they'd eventually be able to negotiate (larger?) bulk discounts with theater chains and thereby get their marginal profit back above zero.
Agreed. Somehow, they need to get the theaters and/or the studios to share in their model.
If they can demonstrate to the theaters that their heavy users are worth a lot more than just a ticket, perhaps high concession sales (through coupon redemption), then maybe the theaters would consider giving them a break on ticket price because they're supplying high-value customers.
Secondly, if they can pump the hell out of new movies so the studios or distributors get an even bigger bump on opening weekend, then the studios might be willing to fully or partially fund those tickets for that publicity (aka "trade spend").
I mean the plan seems to be that except the marginal losses are supposed to go down as they reach higher volumes. Attract the heavy movie goers first and lose money on them till you can attract enough light movie goers that will buy this and forget about so you can afford the people seeing more than 2 movies a month. There's other ways to drop that marginal cost like getting deals from theaters on tickets for bringing people in (eg give us a better deal or we'll block our users from your theaters) and sell data.
I don't think this is going to work out but I can see how this would look workable in a model and pitch.
That might have worked before Netflix and Amazon Prime and other online movie services. The light movie goers are all online now. Only the heavy duty die-hards are still going to theaters to see first-run films. I haven't gone to a theater movie in over three years.
> I haven't gone to a theater movie in over three years.
The funny thing about this is that sometimes my wife and I want to go to a movie on a date night but we can't even find something that we actually want to go see. We'll go out for dinner and then instead of going to a movie we'll come home and watch another episode or two of a good TV show. High budget TV serials are so good now that movies can barely compete.
The never ending stream of largest box office takes makes that seem unlikely. Seems there's still a pretty strong desire for blockbusters and kids movies.
The old joke is "Sure we have marginal losses, but we'll make up for it with volume!"