MoviePass Swears It Won’t Do That Again
Reading Time: 7 minutesOne of the Most Spectacular Business Failures of the 2010s Is Back, The company flamed out once already. Its new (old) CEO explains why this time is different., MoviePass is back. New (old) CEO Stacy Spikes explains what the hell he’s thinking.
MoviePass was one of the coolest companies of the 2010s, and that’s more or less what killed it. Remember? You would give MoviePass about $10 a month, roughly the cost of one movie ticket, and MoviePass would buy you a ticket a day for as many days as you wanted. Obviously that did not work out for MoviePass, which paid retail prices for more tickets than it could afford. It turned out the entire business model was premised on the hope that paying customers wouldn’t love the product so much that they’d use it all the time.
But love it we did, so MoviePass’ parent company went bankrupt. The endeavor had come to prominence at a moment when it was very much en vogue for businesses to light their investors’ money on fire to capture market share (and then figure out profitability later). But MoviePass’ plan was an extra-special degree of silly, a kind that didn’t require an MBA to parse. When a friend first told me about MoviePass subscriptions, he urged me to get one before the company ran out of money. I had a great time watching titles like The Spy Who Dumped Me on investors’ dime in 2018. I think I went to three movies before the company had emptied its coffers, as everyone except the guys in charge knew it would quickly do.
‘MoviePass 2018 was never designed to be a successful business model,’ said Stacy Spikes, the guy who founded MoviePass. ‘They thought they could outrun gravity, and there was just no way to do that.’
Spikes is comfortable talking shit about the company he started in 2011, when it was an early (but less foolishly generous) ticket subscription service, because he is not the guy who crashed it into the ocean. In 2017, a public company called Helios and Matheson Analytics bought MoviePass. The leaders of that company hatched the plan to light investors’ money on fire to buy my ticket to Ant-Man and the Wasp. They did so, Spikes says, over his vociferous objections, and pushed the founder out of the business before going ahead with their plan to give away all of those tickets. As a direct result of all of that, Helios and Matheson is now defunct. Spikes bought MoviePass out of its bankruptcy proceedings in 2021, and he’s now trying his own hand at running his company again.
The old MoviePass was thrilling. One exciting thing about it was that it subsidized cinephiles’ movie-watching with few strings attached. But another exciting thing was when it changed a bunch of users’ passwords so they couldn’t use or cancel the service (because using the service cost the company money), and yet another exciting thing was when the Securities and Exchange Commission charged its leaders with lying to investors and cooking the books. You do not want your business to be exciting in those ways, if you can help it.
The new MoviePass is more boring, which might be good. Late in May, Spikes’ reboot of the company exited a beta period and opened up to the masses. MoviePass 2.0 is just a regular ol’ startup trying to make its way in an industry that did not exist the last time MoviePass gave it a shot. 2023 MoviePass is not geared to be a megaviral hit, but it is also not built to have one of the most explosive and public collapses in the history of American entertainment. Its success hinges on where it falls in the middle.
The company has four subscription tiers. The ‘standard’ offering, billed as the bestseller, costs $20 a month, and MoviePass says it gets the user somewhere between three and seven movies per month. The lack of specificity stems from a credit model in which certain movies (like blockbusters at peak times) cost more credits than others (like independent matinees on weekdays). That’s less simple than the old system of a set monthly price for a set amount of movies, with some restrictions laid out clearly. (It’s easy to find people on Reddit and Twitter who have encountered unexplained changes to credit amounts near showtime, and the exact figure is dynamic, based on MoviePass’ internal evaluations and math.) MoviePass, because it works on a debit card, is an acceptable form of currency at all of the big theater chains and lots of independent theaters. The company sees that breadth as its main differentiator from the chain-specific subscriptions that launched after MoviePass’ previous debut and demise.
After talking for the better part of an hour with Spikes, the exiled and now returned king of MoviePass, I gleaned that the company’s case for future success has five prongs. First, the old managers were bozos, and Spikes’ team will do a better job. (Seems fair!) Second, the old MoviePass entered a world where movie theater subscriptions weren’t a widely accepted or proven business, but now, thanks to both MoviePass and the big chains, it’s clear that the subscriptions have a market. (Definitely fair!) Third, MoviePass has a cult following of old users with serious brand loyalty who will give it another shot. (Yeah.) Fourth, MoviePass can make the math work this time, deploying a system that’s a bit more varied than being one of the world’s best incinerators of cash. (Maybe; burning less cash than the old model seems doable, at least.) And fifth, the company’s big bet is that there are a lot of moviegoers out there who don’t want to be limited to just seeing movies at AMCs or just seeing them at Cinemarks. (Again, maybe. Let’s see!)
On the first point: MoviePass’ old management did indeed biff it spectacularly. Spikes has been consistent for years that the old guard’s plan wasn’t going to work, and that he objected to it and lost his job because of it. ‘I got ousted out of the company because I vehemently opposed the $10 price point,’ he said. ‘I was like, ‘There’s no way the plane can fly. It just can’t.’ ”
That cratered business left some things behind, though. One is a big email list. If you signed up for MoviePass five years ago, you probably got occasional emails over the past year about its impending revival. MoviePass also has the name recognition that comes with clearing 3 million subscribers at one point. All press isn’t good press, though, and I asked Spikes if MoviePass might have a specific problem: Yes, people thought the old MoviePass was a good time, but would they take it seriously? Would it be the kind of place they’d want to store their credit card information? Spikes said that a lot of the early customers for MoviePass 2.0 (or is it 3.0?) have different associations with the company, having come onboard in its pre-2017, pre-lighting-money-on-fire iterations. ‘They, online, will call themselves the OGs of the original MoviePass,’ Spikes said. ‘I think there’s enough of those people that really make the story.’
He then used a different analogy to describe the company’s narrative.
‘In our culture, you’ve had what happened to Apple computers. You had what happened to Dell computers. You have some brands where the original founders or the CEOs were ousted and came back and were able to bring it back,’ Spikes said. ‘And I think that this is one of those stories.’
I pointed out that Apple and Dell are two of the most iconic brands in computing, while MoviePass is rebuilding itself from nothing at a time when numerous other movie subscriptions exist (and can offer perks like discounted concessions that MoviePass cannot, at this point, match). Those subscription products came into being around the time MoviePass was at its pre-bankruptcy height as a tactic with which movie chains could punch back. I asked Spikes why MoviePass could succeed amid all that now-quite-established competition.
Spikes said MoviePass does not see the chains as competitors. ‘Historically, movie ticketing has been additive. So when you think about going to a movie at an AMC, you’ll have Fandango, MovieTickets, Atom Tickets, and AMC’s ticketing service all driving traffic to the theater. We’re not a theater company, so our job is to drive traffic to the theaters, to all of the theaters. So AMC and Regal and Cinemark and even the smallest mom-and-pop are all in our app. So we are not in competition with them if our job is to drive as much traffic to them as possible. I think that they see us as competition.’ MoviePass intends to make its money by being a ticket-market maker, collecting a small percentage of a ticket’s cost ‘in order to be a technology company to provide that service between you and the theater,’ Spikes said.
Whether MoviePass sees a product like AMC Stubs as a competitor is less material than whether prospective subscription buyers do. A service like AMC’s is easy, not just in that I can order popcorn at a discount from my phone and have it brought to my seat, but also in that the entire ticketing process is digital and takes seconds. MoviePass still operates with a debit card—now black, rather than the mildly iconic red one of the 2010s. Users reserve tickets on MoviePass’ app but have to get within 100 yards of the theater to check in before using the card to get a ticket. For select ‘partner’ theaters, the ticketing process is fully digital. It’s a little confusing in a way that a chain’s subscription is not, and that’s before weighing MoviePass’ variable-credit system against the set number of movies someone can watch each week when they subscribe to AMC Stubs.
I don’t know if it’ll succeed, but it seems like the new MoviePass has a better chance of working out than the last time the company had a ‘plan,’ to the extent it was a plan. The most idealistic vision of movie subscriptions is that they help theaters last a few more rounds in our societal fight against our new streaming overlords. For a company like MoviePass to participate in that battle, it needs to avoid losing all of its money, an area where MoviePass does not have the best track record. I asked Spikes if, in that spirit, MoviePass would tolerate some level of extended losses—just not last time’s level of losses— before trying to turn a profit. He told me that was not MoviePass’ objective. ‘MoviePass’ goal is to be a profitable business day one,’ he said. The company is private, but eventually we’ll have an idea of whether it succeeded.
But thanks to the old MoviePass, the one that tanked, the new one has both a road map of where not to go and an addressable market. ‘This is no longer an experimental idea,’ Spikes told me. The last MoviePass didn’t succeed, but it paved a road. Now the job is to bend that road before it hits a ravine.
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