Back in 2017, a little red debit card was the hottest ticket in town — for film buffs and investors alike. One swipe of a MoviePass membership card gave access to daily movie tickets at a staggeringly low monthly subscription rate of $9.95. And the concept promised to redefine the future of the moviegoing business.
Subscriptions exploded, the company’s stock soared and investors rushed to get in on the venture. But the deal was, as skeptics suspected, too good to be true: MoviePass lost $150 million in 2017, and ultimately shuttered in 2019.
It’s tempting to chalk up the failure to an unsustainable business model. Yet the new HBO documentary “MoviePass, MovieCrash,” which premieres May 29, aims to paint a clearer picture of just what went wrong.
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“There’s a story under the story,” Stacy Spikes, who co-founded MoviePass with Hamet Watt in 2011, tells PvNew.
As Spikes and Watt sought to source funding for their startup and grow their subscriber base, Mitch Lowe was brought on as CEO at the behest of key investors, while analytics firm Helios and Matheson purchased a majority share in the company. Its CEO, Ted Farnsworth, teamed with Lowe to slash the service’s price.
Spikes raised concerns that the new model was untenable. “We’re learning how to build the plane in mid-flight and changing it from a crop duster to a 747,” he recalls telling the CEOs in the doc. “We were not prepared to keep running at that pace.”
In a 2017 board meeting, Watts and Spikes were informed they were being removed from their roles. “It broke my heart to see two Black founders create a company the way we did – and then all of a sudden there was an all-white board.” After their ousting, the co-founders were forced to watch from the sidelines as their company went off the rails.
When “Yusuf Hawkins: Storm Over Brooklyn” director Muta’Ali was approached by producer Scott Veltri to helm the project, he immediately resonated with the “sadly familiar” story of two Black entrepreneurs being pushed aside by two white execs, who then implied the idea was their own.
“How do I tell this story that really drives home that this was their baby and their invention, and everything went haywire when it was taken out of their hands? Because of my familiarity with that happening to other great inventors, to specifically people of color, I was like, ‘It’s happening again.’ And I think that’s at the heart of the story.”
The doc from Mark Wahlberg’s Unrealistic Ideas production company features interviews with Spikes and Watt, board member Chris Kelly, former FTC director Daniel Kaufman, as well as financial analysts, retail investors and former MoviePass employees and subscribers. In his effort to chronicle what went wrong at the company, Muta’Ali never expected to secure an interview with Lowe. “I thought he’d be totally against us. I thought he’d actually want to shut us down. So when I heard that he granted us an interview, I said, ‘Oh my God.’”
He knew he wanted to ask the former CEO about racial bias, but had concerns about conducting the interview himself. “I approached the situation feeling like he was going to be biased if he saw a Black man in front of him.”
“I didn’t want to give him the opportunity to shy away from questions that might have to do with bias,” he says, “or to tell me, who’s African American, some answers that might make me feel comfortable as opposed to an answer that might be more factual and more straightforward.”
So he enlisted Unrealistic Ideas’ Archie Gips, who’s white, to ask the tough questions. The result is a candid, matter-of-fact account that makes up a significant portion of the film’s storytelling, often juxtaposed against Spikes’ own version of events. “Mitch was, I think, as open with us as he could have been,” Muta’Ali says.
A week after the interview, which took place in 2022,Lowe and Farnsworth were accused of fraud by the SEC. Shortly after, they were indicted on securities fraud chargesfor allegedly deceiving investors about the company’s business model. “I don’t want to say ‘luck,’ but a lot of things aligned for us to be able to get that,” Muta’Ali says of the timing.
Spikes says Lowe has reached out several times to mend fences, but he’s not interested: “That’s OK. I don’t want to talk.” Instead, Spikes is focused on reviving the brand, which he bought out of bankruptcy in 2021 and relaunched in fall 2022.
“We knew back in 2016 that we needed to do something different that would allow the company to be able to control costs and not just have it fly away, which is what I was trying to explain to the oncoming team when they wanted to take over,” Spikes says of the revamped model. He adds that 2023 marked MoviePass’ first-ever profitable year.
Of course, the moviegoing landscape has changed significantly since MoviePass 1.0. “We literally were the only game in town, and no one wanted to play. And now I think 50 or 60% of theaters have some form of a subscription service,” Spikes says.
Reflecting on the early development days of “MoviePass, MovieCrash” in 2021, Spike says, “When they started, it was a rise-fall story. There was no rise-fall-rise.”
“I think it’s just really cool that we are getting the opportunity to get a second bite at the apple,” he adds. “It’s very Steve Jobs-like to have this opportunity to go back to something you built with your bare hands.”
“MoviePass, MovieCrash”debuts Wednesday, May 29 at 9:00 p.m. ET/PT on HBO and will be available to stream on Max.
