MoviePass allowed card carriers to pay $10/month to see one film per day in theaters, but that business model never turned a profit. The founders — two Black men — got pushed out. Their two replacements ran the company into the ground and got indicted for fraud. A new HBO documentary takes viewers inside the dream to bring people to theaters for cheap, how it went wrong, and where MoviePass is today.
Co-founder Stacy Spikes tells KCRW that he was helping run the Urbanworld Film Festival and wanted to make it a year-round event. “And I was at a party and someone said, ‘Oh, you're trying to make Netflix for movie theaters.’ And that was the genesis of the idea to bring the subscription model to movie-going.”
He says the company was close to profiting or breaking even. But new owners wanted to imitate Netflix’s fee, and Spikes tried explaining to them that it wasn’t going to work. “There were some theaters, we were buying wholesale. And there were some theaters, we were paying full price. But once you lowered it to under the price of an average movie ticket, it just wasn't sustainable.”
Why did MoviePass hire new chiefs in the first place? The documentary’s director, Muta'Ali, recalls, “One of the investors … he felt that a different leadership would put the company in direction where it would need less capital. … And [he] decided to put Stacy, who was the CEO at the time, in a situation [where] it was either a good deal deal or no deal. ‘Either you step down as CEO and allow me to replace you, or I'll stop funding the company.’ Stacy made the decision to step down to save his company.”
After investor Ted Farnsworth came in, the company took away the board seats of Spikes and co-founder Hamet Watt, and clung to a $9.95/month price for customers.
“I do want to mention that part of what set this thing in motion was a lack of equal opportunity. It’s stated in the film that a lot of Black founders and female founders are denied equal access to investment capital,” notes Muta'Ali.
Muta'Ali points out another problem: MoviePass was crafting a deal with AMC that had a lot of potential, but when new AMC CEO Adam Aron arrived, he didn’t want to do business with Farnsworth and his business partner Mitch Lowe. Instead, the theater chain started its own subscription model. 
Stacy Spikes (left) and Hamet Watt (right) are the co-founders of MoviePass. “Someone said, ‘Oh, you're trying to make Netflix for movie theaters.’ And that was the genesis of the idea to bring the subscription model to movie-going,” Spikes tells KCRW. Credit: HBO.
Within a year of being under Farnsworth and Lowe’s control, MoviePass went bankrupt. During that time frame, Muta'Ali explains, people invested in HMNY, the publicly-traded company that owned MoviePass. “They were sold on this idea that it was going to do well based upon the exciting membership growth — because it grew up to 3 million-plus members in a short amount of time. And then by the end of that year, the stock was worth pennies.”
He points out that MoviePass’ leaders were spending hundreds of millions of dollars on things that didn’t help their business, including an airline that Farnsworth started.
Spikes adds, “You were hopeful that okay, all of the wild spending and the parties would level out, and they would calm down. But it never happened. And … within 12 months, it was gone.”
After that, Spikes felt mixed emotions. “But it was reaffirming in a lot of ways. … There's really no shortcuts, there's no way to get away with anything. When people are paying for a service, you need to treat them with honor and respect. Treat your team and your staff properly. It was bittersweet, but I think I was grateful that I was out of the company. Because if not, I would have had to leave. There was no way I could have stayed with what they started to do.”
In 2022, the Department of Justice charged Farnsworth and Lowe with one count of securities fraud and three counts of wire fraud each. The two men had tried to stop the financial bleeding by disabling services they promised customers.
Later, Spikes bought back MoviePass at an auction. He says he ended 2023 with a 23% profit margin. “The studios are back and engaged. The movie theaters are engaged. And customers that have come back really love the service, and enjoy the freedom to be able to go wherever they want, and save around 30%.”