Stacy Spikes, the co-founder of MoviePass, purchased ownership of the troubled brand for an undisclosed sum yesterday. The deal comes on the heels of one of the most stunning IT failures in recent memory.
The service was beset by ever-changing price tiers, negative publicity from the country’s largest theater chain, and serious app difficulties.
Spikes tells TechCrunch that he was fired from the service he helped develop in 2018 after expressing dissatisfaction with the $10/month membership service’s price.
It was one of a number of issues that contributed to the company’s long-term demise under the leadership of Helios and Matheson.
PreShow Interactive, which we defined as “a novel approach [for gamers] to earn in-game currency in exchange for watching advertising,” was launched by Spikes in April. In an interview with TechCrunch, Spikes said that PreShow could return in a new form as part of a redesigned MoviePass that will launch next year.
Everything still sounds like it’s up in the air. The company’s first priority is gaining access to the code and other assets of the bankrupt service.
Spikes also intends to test the waters to see if there is sufficient demand to justify MoviePass’s return. Is now the ideal time for a more considered return of movie ticket subscriptions, as the industry struggles to reclaim viewers after a seemingly prolonged global pandemic?
TC: You have previous experience in the music sector, which may have prepared you for the changes in the film industry during the last few years. It served as a canary in the coal mine for a large portion of the entertainment business that was on the verge of collapsing.
SS: When it came to subscriptions, you saw Napster, Pandora, Spotify, and Rhapsody on the horizon. You are correct; the music industry was the first to do so.
Many of those music subscription plays were on the verge of getting back on their feet and making the digital move from DVDs to digital when Netflix came along. That was the first place where digital truly took hold, and you could see how it was changing the landscape.
Was there a sense that someone needed to disrupt cinemas in the same way that these services affected music when you came up with the idea for MoviePass?
As one of the few black executives in the industry, I founded the Urban World Film Festival to provide a platform for black filmmakers.
Ava DuVernay, Malcolm Lee, Tim Story, and Lee Daniels all come out of the festival. All of this brilliance emerged from Urban World. Our first impression was that their films were having difficulty breaking into mainstream theaters and gaining popularity.
I planned to build a circuit in which they would play 10 markets, we would have a subscriber club, we would four-wall the theaters, and the circuit would be complete. We were attempting to determine which technology we would employ.
What does it mean to be a member? What method do you use to get to the theater? What makes you think you can just stroll in? “Well, why don’t you just use it to help all independent movies?” someone said as we were building. Then it just continued rising from there.
How different was your vision of MoviePass from the one that Helios & Matheson eventually implemented?
At the end of the day, we price tested $15 to $90 while I was CEO. We spent the entire day A/B testing these ideas.
What you’re attempting to do is discover the vector point between a viable company price and what’s too expensive for people, cutting out the capacity to grow, and what’s too cheap that you’ll never, ever make money.
We understood that if we went below a particular financial threshold, we wouldn’t be able to keep the boat afloat.
There was no other option. The significant difference, I believe, was that we already knew that.
They dismissed me when they came in with the belief that they knew better. “You don’t agree with our worldview,” they said. I was dismissed go and thrown off the board four or five months after the deal was made.
What were the main causes behind MoviePass’s failure?
That price couldn’t be sustained as a business at the end of the day. That is an unmistakable fact. It doesn’t get any more complicated than that.
There was also the technical side to it. Users were greatly frustrated by shutdowns and other issues.
That wasn’t a technicality because it was done on purpose. The MoviePass app functioned perfectly when I was CEO. It worked fine. The ease with which the service was provided was really appreciated.
I can stroll up to any theater and go wherever I choose. Fandango and Movie Tickets combined have a wider footprint than we did.
You could use MoviePass at any theater, with the exception of drive-ins and cash-only locations. As a result, the ease of use and simplicity were ideal.
We put in a lot of time and effort to get that correct. Everything that happened after that was premeditated. That wasn’t a technological problem. It wasn’t technical issues that caused them to pull AMC Theaters or that your app wasn’t fully functional.