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The HBO documentary, “MoviePass, MovieCrash,” unveils the well-publicized downfall of the movie ticket subscription service MoviePass, which ended in bankruptcy in 2020. Yet, it also highlights the lesser-known story of its two African American co-founders who were excluded from their company’s later stages.
Initially lauded for their innovative approach in the cinema ticketing industry, founders Stacy Spikes and Hamet Watt eventually saw their brainchild spiral out of control after Mitch Lowe and Ted Farnsworth took over the helm. Contrary to popular belief, the recognition for establishing MoviePass goes to these two Black entrepreneurs, not Lowe or Farnsworth.
“MoviePass, MovieCrash” debuts on HBO Max and brings attention to a pressing issue at a time when only a small percentage of businesses in the U.S. are majority Black-owned. With recent Annual Business Survey statistics estimating this at 2.7%, co-founder Spikes is hopeful that the documentary will cast light on the challenges Black founders face, particularly in securing funding.
Spikes shared with TechCrunch his anticipation for the truth to surface in this documentary, which goes beyond the story of MoviePass’s fall to discuss broader shifts in venture capital distribution, which are starting to favor a more diverse range of founders.
(For full context, it is recommended to watch the documentary prior to engaging with this article.)
Though Lowe, associated with Redbox and Netflix, joined as CEO in 2016 after MoviePass was established for half a decade, the service struggled with a modest subscriber count and difficulties in raising capital, a problem exacerbated by the inequitable distribution of venture capital funding toward Black-owned businesses. In 2023, Black founders received only 0.48% of all venture capital in the U.S., a stark decline from previous years.
Watt expressed in the documentary that partnering with a “white male with grey hair” was seen as a strategic step to attract investment from similar demographics. Following this, Helios & Matheson acquired a controlling interest for $27 million.
Spikes and Watt, while steeped with experience and success, found themselves outpaced in fundraising by their white counterparts. Spikes operated as COO until 2018, and Watt stayed on the board. MoviePass then pivoted to a low-cost subscription model which initially prompted a surge in users but ultimately led to substantial financial losses.The unsustainable pricing strategy and subsequent mismanagement resulted in the dismissals of Spikes and Watt from the company and gradually pushed MoviePass to dissolution. The extravagant and irresponsible spending further exemplified the misguidance under Lowe and Farnsworth’s direction.Conversely, Spikes managed to restore his reputation by repurchasing MoviePass in 2021, leading it to profitability in 2023. Concurrently, Watt carved a new path with the founding of Share Ventures, a VC firm focusing on healthcare and technology investments.
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Frequently Asked Questions (FAQ)
What was MoviePass?
MoviePass was a subscription-based movie ticketing service that allowed users to watch a certain number of movies per month for a flat fee. It aimed to disrupt traditional cinema ticketing models but ran into financial and operational issues.
Who originally founded MoviePass?
MoviePass was originally co-founded by former Miramax executive Stacy Spikes and entrepreneur Hamet Watt.
What led to the downfall of MoviePass?
MoviePass’s downhill trajectory is largely attributed to unsustainable subscription pricing, mismanagement, and excessive corporate spending under the leadership of Mitch Lowe and Ted Farnsworth.
Is MoviePass still in operation?
After filing for bankruptcy in 2020, Stacy Spikes purchased MoviePass back in 2021 and relaunched it. As of 2023, the new iteration of MoviePass became profitable.
What does the HBO documentary “MoviePass, MovieCrash” focus on?
The documentary covers the chronicle of MoviePass’s rise and fall, including the struggles of its Black founders and the misdirection following their departure from the company.
