In June 2011, when co-founders Stacy Spikes and Hamet Watt launched MoviePass, they surely had no idea what the next decade would have in store for them. The new company initially faced hostility from many of the biggest exhibitors, notably AMC. That never changed but MoviePass made progress and by 2016 Mitch Lowe, a former Netflix executive, was named CEO. Throughout that period, MoviePass experimented with different pricing models and slowly, but steadily, grew. In 2017 the analytics firm Helios and Matheson's acquired a majority stake in the company, Spikes was fired, and Helios and Matheson CEO Ted Farnsworth began to exert more control. By September 2017, the number of subscribers increased to 400,000, then to 600,000 in mid-October, and then to one million in December. Fast forward to May 2018 and that dramatic growth had led to major problems. That month, MoviePass' cash expenses exceeded its revenues by $40 million and the company announced that it expected to run a deficit of $45 million in the month of June, the same month it announced that it had more than three million paying subscribers. Changes in subscription prices seemed to happen weekly after that. Most people in exhibition thought the company’s end was in sight. Yet, despite everything that was going on, Helios and Matheson continued to grow the company. The lawsuits began in November 2018, first in San Francisco, then in New York, and in September 2019, MoviePass folded. Through it all, Stacy Spikes never lost interest and wanted his company back. Finally, in November 2021, a bankruptcy judge approved the sale of MoviePass to Spikes. Last month, Spikes announced that MoviePass has raised the seed financing necessary for the beleaguered company to begin its relaunch. With all that as a backdrop, I recently spoke with Spikes via email about his plans moving forward. Here is that conversation.
Digital Cinema Report: Recently, when you announced that you had raised critical seed money to fund your relaunch, you said, “MoviePass has the largest footprint of any theatrical subscription service featuring nearly 100 percent of the theatres in the U.S. market, giving customers the greatest choice in theatre selection.” In that same release you said the company continues to build out its network of exhibitor partners, signing deals with more than 30 percent of exhibitors in the U.S. to date.” How do you reconcile those two statements?
Stacy Spikes: Members can go to nearly 100 percent of movie theatres. For non-partner theatres, members use the MoviePass debit card to purchase a ticket to the movie they wish to see. With partner theatres, we integrate into the theatres’ [point of sale] system for a better user experience and allow the customer to select their ticket right in the app from home rather than needing to go down to the theatre to make the purchase. They can also select their seat directly from the app as well.
DCR: Given the current state of the market, how concerned are you that much, if not all, of your financial support is based on build on crypto currency?
SS: Our financial business model is NOT based on crypto currency. Our business model is a subscription service using U.S. dollars. We are planning on implementing a Web3 in the future, including developing virtual reality cinema experiences for members.
DCR: In preparing for this Q&A, I discovered something I had forgotten: MoviePass, at least the idea for the business, is twelve years old. What comes to mind when you think about all that has transpired over the past twelve years?
SS: I think when we started on this journey over a decade ago that many of our predictions were correct and it's good to see the cinema ecosystem being more open to some of our original ideas.
DCR: What were those predictions?
SS: Some of the main ideas that we had in the beginning included how a cinematic subscription model could dramatically increase attendance, that that increase in attendance would increase concession spend, that mobile phones versus websites would play a more critical role in the transaction process and that the movie industry would eventually adopt a subscription model. Currently more than half of all movie theatres have a subscription model of some kind.
DCR: Once the previous owners drove the company into bankruptcy, was there ever a time when you hesitated about acquiring MoviePass again?
SS: Yes. I was hesitant and concerned about relaunching the brand, but after doing polling and research we saw that the affinity for the brand and its mission was greater than its fall. So, we decided to go for it.
DCR: During your presentation last February, you claimed that MoviePass’s share of the moviegoing audience could be thirty percent by 2030. On what do you base that claim?
SS: That’s not correct. I said if the movie industry wanted to double its revenue it would need to have the top 30 percent of moviegoers become subscribers. I said I believe the industry could achieve this by 2030. I don’t believe MoviePass will have that market share alone. I believe that would be a collective number across all theatrical subscription companies. Our hope is that MoviePass would be at least 10 percent of the market.
DCR: You have said you could envision a day when studio executives could see the real-time decisions that MoviePass subscribers were making from their phones and devices. That would enable studios to talk to their customers, know what they are thinking, notify them of things like ancillary items. In turn, these subscribers would go to the movies more and buy more concessions. How close to that dream is MoviePass?
SS: It’s part of our roadmap. I would like to see it be fully functional within the next two years.