MoviePass, at least the version that grabbed America’s attention in 2017 and 2018, didn’t have to fail.
Yes, the ridiculously cheap price was unsustainable. You didn’t need a business or economics degree to figure that out. However, the basic idea of a subscription-based movie ticket service was ahead of its time. If the company’s cofounders had not been forced out, MoviePass might have been a Hollywood triumph.
The HBO documentary MoviePass, MovieCrash takes viewers behind the scenes of a pop culture phenomenon. There’s a lot about this story that most people don’t know. From the outside, we made jokes about MoviePass’s failures and laughed all the way to the theatres. It seemed unbelievable that you could see one movie anywhere every day for $9.95 per month. There was no catch. Americans eagerly took advantage of one of the all-time best bargains/worst business ideas.
If the goal was only to increase its subscriber base, mission accomplished. MoviePass became one of the fastest-growing entertainment subscription services in history.
However, the goal of any company is to become profitable. MoviePass lost $150 million in 2017 alone, contributing to its infamous downfall.
From the inside, according to the documentary, MoviePass cofounders Stacy Spikes and Hamet Watt watched something they lovingly built be destroyed by others. There is a lot to unpack here. But what resonates the strongest is how two African American entrepreneurs were treated by a predominately white business world.
Funding remains a problem. According to The Atlanta Journal-Constitution, Black-owned companies receive only 1% of venture capital funding despite African Americans making up about 14% of the U.S. population. So, it’s impossible to look past the racial dynamics in this story. Spikes and Watt believe they were pushed to the side because of a notion that investors would feel more comfortable providing funding to white executives.
Director Muta’Ali Muhammad assembles a vast collection of people to sift through this implosion. From Spikes and Watt, to former CEO Mitch Lowe, to MoviePass employees, to subscribers, to journalists, many people involved speak their version of the truth. Spikes comes off as the most sympathetic figure here because he appears honest. He and Watt lost the most ($80 million, they say in the documentary). Meanwhile, two of the people who took control are in legal trouble.
In 2022, the former CEOs of MoviePass (Lowe) and its parent company Helios & Matheson Analytics (Ted Farnsworth) were charged in a securities fraud scheme. Both have pleaded not guilty and are awaiting trial. MoviePass, MovieCrash details the many wrong turns the business took after Lowe and Farnsworth came into power. At the very least, according to this documentary, they displayed questionable judgment. They burnt through an astounding amount of cash and spent it on expenses that didn’t make sense.
That’s not all. The MoviePass experience suffered as the company struggled to keep up with demand. And the technology that made the service possible didn’t always work. This seemed intentional as MoviePass tried to reign in frequent users and reduce its burn rate.
This was not what Spikes and Watt wanted for their customers. But by then, they were no longer a part of the company. All they had were their stock options which they couldn’t cash out due to a yearlong IPO lockup. Spikes and Watt painfully recount how their stock in the company, which once traded as high as $39 per share plummeted to just pennies on the dollar.
A company that began as revolutionary became a laughingstock.
There is a silver lining. MoviePass is still alive. Spikes purchased it back out of its 2020 bankruptcy. The options are modest now. The premium plan allows you to watch up to five movies monthly for $30. Last year, it turned a profit for the first time.
Seems doubtful that it will recapture the original buzz. Box-office woes have plagued Hollywood. Movie theatre habits have changed since the pandemic. However, MoviePass did help usher in other subscription-based services, such as AMC Stubs , where you can see up to three movies per week for a monthly fee.
MoviePass, MovieCrash illustrates how it can take years to create something cool, and how quickly it can be destroyed due to mismanagement.
MoviePass, MovieCrash is available to stream on Max.