You don’t have to be Will Hunting to figure out the math in a 2017 subscription offer from the ticket subscription service MoviePass was going to be problematic for the company.
Remember the deal? For just $9.95 a month, you could see a movie a day, every day, with virtually no restrictions. Given that the average movie ticket price that year was right around $9, one can see how this “too good to be true promotion” was going to be a disaster for MoviePass, with the company burning through tens of millions of dollars a month to make up for cash losses, and eventually enacting changes to the subscription plan that infuriated everyone from customers to theater chains to MoviePass employees.
How did it come to this? The HBO documentary “MoviePass, MovieCrash” takes us through the rise and fall and rise from the ashes of an app that went from being the fastest growing subscription service since Spotify to a flop that was losing some $150 million a year. Directed with just the right amount of stylistic flair (including terrific and helpful graphics) by the talented Muta’Ali, “MoviePass, MovieCrash” is a worthy companion to documentaries such as “Eat the Rich: The GameStop Saga,” “WeWork: Or the Making and Breaking of a $47 Billion Unicorn,“ and the Fyre Festival documentaries. It is a classic story about two guys who seemed poised to grab the American Dream by the tail, only to have two other guys wrestle it away from them and burn the whole thing down through sheer hubris and greed.
Oh, and the first two guys are Black, and the latter two guys are Caucasian. Unfortunately, that, too, is an all-too-familiar story about the American business experience. (Just Google “Black Inventors Who Don’t Get the Credit They Deserve.”)
“MoviePass, MovieCrash” focuses primarily on a few pivotal years in the mid-2010s, but we do get a brief history of the company, which was founded in 2011 by Hamel Watt and Stacy Spikes, the latter of whom had been senior vice-president of marketing for Miramax by the age of 30 and had worked on hits such as “Scream” and “Trainspotting.” In its nascent years, MoviePass was hailed in the media as a buzz-worthy idea, but the business plan was met with resistance from movie theater chains, including AMC, and the company struggled to push its subscriber count past 20,000.
By 2016, Mitch Lowe and Ted Farsnworth had maneuvered into positions of power at the company, with Lowe becoming CEO and Farnsworth making the media rounds and positioning himself as a visionary game-changer. Spikes and Watt were edged aside — first pushed off the board, then fired from the company they had co-founded. Says Lowe, who for some reason agreed to be in the documentary: “Oh God, these old stories. This is a company, not a family, and we’re here to make the company successful.” (At least Farnsworth was smart enough not to go on camera.)
By this point, the doc has clearly established Spikes and Watt as the wronged anti-heroes in this story, and Farnsworth and Lowe as the villains. It’s hard to argue with that. “MoviePass, MovieCrash” takes us through the heady, giddy period in which the subscriber count skyrocketed from 20,000 to 100,000 in 48 hours thanks to that $9.95 promotion, with the numbers climbing to 3 million by 2018. Problem was, the app kept crashing and the home office was severely understaffed — and it didn’t help matters that while the rank and file were scrambling to deal with thousands of complaints, Farnsworth was living it up like he was in “The Wolf of Wall Street,” and the company was hosting lavish events, e.g., Dennis Rodman showing up in the MoviePass helicopter to promote the company at Coachella in 2018.
Says the utterly clueless Lowe: “I sensed a resentment by the MoviePass employees [about the Coachella event]. Each individual has their various roles and not all roles get to party.”
The debacle continued. MoviePass invested in the disastrous John Travolta “Gotti” film, which has a 0% score on Rotten Tomatoes. In 2018, a class action lawsuit was filed, alleging MoviePass was blacking out certain popular movies. A year later, another class action suit alleged MoviePass was using bait-and-switch tactics. In 2022, Mitch Lowe and Ted Farnsworth were indicted by the Department of Justice on one count of securities fraud and three counts of wire fraud. They pleaded not guilty and are awaiting trial.
Says “Shark Tank” star Daymond John: “It’s like they were the god- – – – Mike Tyson of f- – -ing movies. How do you burn through $250 million, what is f- – -ing wrong with you, are you crazy?”
Spoiler Alert: In 2022, co-founder Stacy Spikes reacquired the company. And how about this: In 2023, MoviePass had its profitable year, ever. There’s a chance this story will have a happy ending after all.