‘Moviepass, Moviecrash’ Recap: Can The Company Make A Comeback In The Future?

Experiencing movies in theaters is one of the most pristine feelings ever, something that can never be recreated by alternatives, irrespective of technological advancements. However, with the advent and popularity of OTT and streaming service-based entertainment in the last decade, a significant portion of the population turned their back on theaters. This marked a drastic decline in the number of moviegoers, and its impact was noticeable with the shutting down of several movie theaters. In 2011, the subscription-based movie-viewing service, Moviepass, was launched, which had the potential to revolutionize the theater business in a massive way, and to some extent, it managed to do so for a certain period of time. But a series of instances of mismanagement led to the service’s downfall, which is duly chronicled in HBO’s documentary Moviepass, Moviecrash, directed by Muta’Ali. 

In a taut, detailed, and methodical way, the documentary delineates the events that led to the creation of MoviePass, the initial hiccups and meteoric rise of the service, and exactly where everything went wrong. By interviewing key figures who were responsible for the entire operation—journalists and even consumers—the documentary gives viewers an insight that once again reiterates the truth about how corporate greed maligns creative vision time and time again. 

Creation of MoviePass

The conception of Moviepass was rooted in genuine goodwill and experience in the entertainment industry, as founder Stacy Spikes recalls his early days when he tried to make it big in showbiz, only to recognize the existing racial prejudice in the industry. Later on, after becoming an influential figure in studio administration, Spikes created the Urbanworld Film Festival in the late 1990s with the aim of providing equal opportunity to women and minority filmmakers to showcase their talent, which at that time was denied by the mainstream movie industry (still is). It is from the success of the Urbanworld Film Festival that Stacy conceptualized a subscription-centered ticketing service, which led to the inception of MoviePass. In the earliest phase, Spikes struggled to find support and got major assistance from investor Hamet Watt, whose financial aid led to the foundation of MoviePass.

What made MoviePass so unique and revolutionary?

As the founder duo brainstormed ideas to make MoviePass lucrative and appealing for moviegoers, their primary aim was to create a system that could mimic and rival Netflix’s subscription-based broadcast system. The core idea was to allow viewers to watch a number of movie titles with monthly subscription fees, which will be accessible across the United States through an app-based system, and this was opposed by the biggest movie theater chain in the world, AMC theaters. Naturally, the prospect of allowing viewers to enjoy a number of movie titles with a nominal fee would not sit well with theater chains, despite the possibility of this system drawing a higher percentage of crowds to the theaters. To bypass the restrictions imposed by theater chains, a card-based fund transfer system was introduced, which effectively made Moviepass independent, but even then, without support from major players in the industry, Moviepass had trouble finding its footing. 

The Sudden Boom and a Wrong Turn

To expand the scope of Moviepass, Stacey and Hamet decided to take the guidance of a so-called industry pro, Mitch Lowe, who had experience working at Netflix and Redbox. Despite the changing board structure after Lowe’s inclusion as the CEO of Moviepass, the founder duo held on to their belief in progressive change. Mitch Lowe brought in another likeminded, slick, profit-focused industry pro, Ted Farnsworth, CEO of HMNY, to boost the seemingly immobile subscriber base of MoviePass. Ted offered a lucrative cash injection of $25 million to MoviePass on the condition of increasing its 20,000 strong subscriber base five times over within six months. Considering the fact that since Moviepass’ creation in 2011, it took five years to reach the twenty thousand mark, this was a near impossible task, but a desperate move by Lowe made it possible overnight. 

The Moviepass subscription fee was slashed to 1/4th of its original price, and with the extremely enticing deal of having subscribers enjoy one movie every day for the entire month, the fate of Moviepass changed drastically. Subscriber numbers increased manifold within hours, and within two days the target number was achieved as well. Moviepass began galloping at breakneck speed with no proverbial brakes to slow it down, and despite enjoying the newfound success, Stacey had concerns regarding the sustainability of such a plan. 

The subscriber base grew at a staggeringly high rate and eventually passed the one million mark, but underneath the surface glimmer of success laid one troubling truth: that the service had not made any profit. The users were mostly active, and they utilized the Moviepass privilege to full effect, but with a bare minimum subscription charge that didn’t even come close to the amount the company spent on the card funds of each user—Moviepass was bleeding internally. Lowe and Ted maintained a false narrative about how a large subscriber base will eventually turn profit and became the face of the company by keeping the founders out of the picture. Eventually, both Spikes and Hamet were ousted from their own company; two people of color who paved the way for a radically innovative idea were thrown out by two profit-minded white folks. 

With the narrative of Moviepass’ success remaining strong in the market, the new company chiefs doubled down on their effort to project an enticing image to draw even more attention. Luxurious parties became a commonplace affair, along with mindless spending, all to hide the hideous truth about the company generating absolutely zero revenue to sustain itself in the long run. Ted had a shady hedge fund to back him up, investors poured in as stock prices of Moviepass skyrocketed, and the company became a nationwide phenomenon in no time—all the while when customer service was pitifully shortstaffed.  Like the duplicitous Ponzi schemes of network marketing, Moviepass was befooling the rest of the world with the bait of a golden opportunity while hiding its skeletal condition within. 

The disastrous downfall

The first annual 10-K form of the company since the overhaul orchestrated by Lowe and Ted revealed the horrifying extent of Moviepass’ actual condition. The company was losing thirty million dollars per month, absurdly higher than what the losses were when Spikes and Hamet were in charge. Having a company running on zero revenue worried the investors, who started pulling the plugs, and in no time the stock price of Moviepass plummeted to oblivion. The shares owned by Spikes and Hamet, which were earlier worth millions of dollars, were reduced to penny-worth shares. 

In order to control the damage, the new chiefs of the company decided to use all sorts of ludicrous, abysmal, and downright criminal methods, like limiting the MoviePass app’s accessibility, selling public data, and whatnot. When the much anticipated Mission Impossible: Fallout was made inaccessible for theater viewing through Moviepass, it proved to be the final nail in the coffin of the company. Both Ted’s HNYM and Moviepass eventually filed for bankruptcy, and later on, reports of money embezzlement by Lowe’s trusted contacts came to surface. Both Ted and Lowe were targeted by the authorities for their fraudulent machinations while operating Moviepass, and to this day they are awaiting their trial. 

Can the company make a comeback in the future?

Despite the way Moviepass crash-landed after its promising rise, there is still some hope left for the company, as revealed during the final moments of the documentary. Hamet has moved on to other companies, while Stacy bought Moviepass on auction in 2021 and decided to restructure the company anew. Recently, in 2023, the company saw profit for the first time since the beginning of its journey, and there is a possibility that things turn out well for Moviepass by following the original vision of its founder.

Moviepass, Moviecrash acts as a cautionary tale to up-and-coming entrepreneurs, who so often unknowingly have to rely on devious mediums, which ultimately brings doom to their ingenuity. In the cutthroat competition of the corporate world, where ideas and visions are reduced to cash grab assets, the most noble, ambitious concepts get turned into rotten, stinking, soulless money-raisers on a daily basis. Considering the fact that a subscription service has become a common thing in every popular theater chain nowadays, it feels disheartening to see how the pioneering idea was put to waste simply by despicable, profit-hungry management.