Earlier this month, Mitch Lowe, the CEO of the movie ticket subscription service MoviePass, gave an ominously titled keynote address—“Data is the New Oil: How Will MoviePass Monetize It?”—at the Entertainment Finance Forum in Los Angeles. Lowe bragged that MoviePass, which allows subscribers to see any movie in any theater for $7.95 a month, is not just an entertainment service, but also a kind of panopticon.

“We know all about you,” he said. “We know your home address, of course; we know the makeup of that household, the kids, the age groups, the income. We watch how you drive from home to the movies. We watch where you go afterward.”

The backlash was swift and severe. MoviePass, which is popular with its users because of its super-low cost, was reimagined as a stalker, preying on its unsuspecting customers. A few days later, MoviePass backtracked, sort of, releasing a cryptic statement in which it promised to be less creepy but didn’t specify how it would be less creepy. Instead, the company vowed it would only use user data for good—which is to say, to enhance the activities that go along with going to the movies (driving, eating, etc.).

But Lowe was just explaining how his entire industry works: Big Tech is built on data and mass surveillance. If anything, Lowe’s comments stand out because they seem insecure and aspirational—even with more than two million users, MoviePass isn’t in the same league as Uber and AirBnb (to say nothing of Amazon and Google). But while Lowe’s version of the Kinsley gaffe spoke to the tech industry’s nonchalance about its numerous privacy violations, it also underscored the odd position MoviePass finds itself in. How does this company make any money?

MoviePass exploded in popularity after it was acquired last year by data analytics firm Helios and Matheson, which subsequently slashed its subscription price from as much as $50 a month to less than $10. That change brought hundreds of thousands of new consumers, but the value of those consumers doesn’t come from the measly amount they pay each month. MoviePass pays movie theaters full price for tickets, meaning that every subscriber who goes to more than ten or so movies a year is costing the company money.

Other tech companies—most notably Google, Facebook, and Amazon—collect reams of data about their users and monetize it in all sorts of ways. Reading between the lines of the company’s public statements, Gizmodo provided these examples of what MoviePass could do with its users’ data:

Let’s say you visit a restaurant, an ice cream place, then see a film for the fourth time, before drinks. Moviepass could record that data, then make Groupon-style deals with these businesses as a source of revenue. Four tickets to see Coco or Paddington 2? Moviepass could recommend a package deal with a nearby family restaurant. Tickets for two for Mission Impossible or Fifty Shades? Moviepass might suggest something for couples.

This is a far cry from Lowe’s “we know where you live” implications. Rather, Lowe sees MoviePass as playing an Amazon-like role on movie night. While the company isn’t making money on tickets, it would, like Amazon, hope to take a cut of a number of transactions that go along with moviegoing.

But compared to the world-eating ambition of Amazon or Uber, this is small beer. And so MoviePass is facing a problem of diminishing returns. The power users who go to more than 10 movies a year aren’t doing much more than going to the movies, cutting the number of potential transactions that MoviePass can muscle into. And, whatever Lowe says, MoviePass does not have a monopoly on this data. Visa and MasterCard undoubtedly already know a lot more about the other things people do when they go to the movies than MoviePass does, which means that whatever data the company is collecting probably isn’t all that valuable, anyway.

Instead of laying out a lucrative business model, Lowe was flexing—making MoviePass look like it was playing with the big boys in terms of data collection. Making MoviePass seem much more dominant than it is has become an important aspect of the company’s strategy in 2018. It doesn’t have anything close to the market share that it needs to make money—or make demands for lower prices from theaters (which will help it make money).

Earlier this year, the company battled with the movie theater chain AMC, pulling MoviePass from ten theaters as a negotiating tactic. In a statement, the company made the ridiculous claim that it accounted for over 60 percent of AMC’s revenue (the actual number is around 4 percent). But it was nevertheless the kind of tech company-legacy entertainment fight that we’ve grown accustomed to, with Amazon’s battle with the book publishing industry being a prominent example.

Theater chains like AMC are understandably concerned about MoviePass’s potential to devalue ticket prices, which have dramatically escalated over the past few years. MoviePass’s goal is to scale up as quickly as possible, then use its newfound leverage to extract concessions from theaters. The hope is that MoviePass will become a layer between theaters and moviegoers, as well as between those moviegoers and restaurants and services like Uber. In its skirmish with AMC, MoviePass may have been testing the waters for a deal now, before MoviePass theoretically grows so big that it could disrupt the industry entirely.

But that just underscores the risk inherent in MoviePass’s strategy. The irony is that its most valuable customers are those who use the service the least, because anyone who goes to more than a movie a month is costing the company money. MoviePass, moreover, is spending lots of money to acquire customers to replace those who have canceled the service—presumably because they weren’t using it. Its power users, meanwhile, are going to dozens of movies a year, each costing the company a small fortune. MoviePass is subsidizing their movie-watching in the hopes of acquiring lazier users to offset that cost. Its possible to run a subscription like this and not lose money—the ebook subscription service Oyster, for example, was profitable in terms of gross—but it’s very hard to do at the scale MoviePass is operating at and it’s near impossible to do it with margins that would make investors salivate.

MoviePass, moreover, does not have the technical wizardry of an Uber or Netflix. Its website interface has the look and feel of a hastily made SquareSpace website and customers routinely complain about waiting weeks for their MoviePass cards to arrive. It’s not entirely clear, in other words, that MoviePass can operate effectively at the scale it aspires to.

But what can’t be denied is that MoviePass is ramping up, including in lucrative markets like New York. In the same Los Angeles talk, Lowe claimed that MoviePass would add another three million subscribers before the year is out, suggesting that it will have have more clout in future negotiations with AMC and other theaters.