The story of the theatrical movie app MoviePass is one of triumph and tragedy. And those who may have heard some of the tales of its demise don’t know the full story of what happened. Until now.
In the HBO documentary film MoviePass, MovieCrash, directed by Muta’Ali, the co-founding visionaries behind the subscription-based app finally get to tell their story of what really happened and how a business that was disrupting the entertainment industry and became a pop culture phenomenon was sabotaged and destroyed in less than a year.
MoviePass worked similar to Netflix: a user paid a monthly subscription to have access to a number of their favorite films. The way MoviePass started and ended would seem as if these were two completely different companies. MoviePass was founded by Stacy Spikes and Hamet Watt.
The two had the idea that if people can simply access an app at their convenience and pay a fee, that would encourage more users to go to the theater to enjoy their favorite films. At the time, Spikes and Watt were slowly onboarding new customers. However, while they were not yet profitable, they still had the potential to be, as customer growth was consistent.
What we learn in Muta’Ali’s documentary is the unfortunate fate of many Black startups. While Spikes and Watt had the innovation and the concept that was enough to change how consumers paid for their movies, they simply did not have the capital to keep MoviePass sustainable. Enter Chris Kelly, a white investor and later a board member of MoviePass, who provided an infusion of cash to keep them going. But as the growth is slow and the profits are not returning, Kelly grows impatient and sees that the only way to save MoviePass is to bring in another investor and have that person become the new CEO.
Mitch Lowe, also white, has now entered the chat. Stacy Spikes is pushed to the role of COO, and Hamet Watt is just a board member. Mitch Lowe is the guy making the executive decisions for their company. But this is just the icing on the cake as Mitch Lowe makes a decision that changes the entire trajectory of the company, ultimately leading to its demise — hiring Ted Farnsworth.
If you are familiar with the story of Adam Neumann, the former CEO of WeWork, there are some strong parallels between these two individuals. The two share this “fake-it-till-you-make-it” mentality. To take a step back and put this in perspective, Stacy Spikes and Hamet Watt were two Black founders of a tech company. Now they were in the Rosa Parks section of their own company led by two white men — one of whom had a sketchy past. What the documentary uncovers is how Ted Farnsworth ran a data analytics company called Helios and Matheson Analytics Inc. This company under the stock ticker symbol (HMNY) was the shiny bright diamond for MoviePass CEO Mitch Lowe, which was why he was interested in working with Farnsworth.
What this documentary uncovers is the greed, the recklessness, and the fraud Farnsworth and Lowe committed during their leadership at MoviePass. Expensive jets were purchased, celebrity influencers were paid top dollar to promote the brand, and they even had a stake in producing feature films. While Stacy Spikes and Hamet Watt were losing $200,000 per month running their startup in the early years, Mitch Lowe and Ted Farnsworth were burning $30 million dollars per month during their tenure. Spikes was frank by stating that if it had been him burning through that much cash, he would be in jail.
And that’s what this documentary reinforces — the challenges of Black entrepreneurship. How did two incredibly creative Black founders get ousted from their own company? MoviePass took 10 years for Spikes and Watt to build and within a year Lowe and Farnsworth destroyed everything they built. There is another player here, a young recruit hired by Mitch Lowe with very little business experience named Khalid Itum. He eventually took over the company when Lowe was going through a divorce and took a break from running MoviePass. More irresponsible decisions were made under his reign, which led to the company going into further debt.
While these events are tragic and infuriating, the determination and will of these founders resonates through this story. There’s even a beautifully tied-in origin story about how Spikes discovered the film festival Urbanworld. After the Sundance Film Festival didn’t find there were any “good” films featuring people of color, he launched his own film festival, which is still celebrated today.
MoviePass, MovieCrash features a number of former employees, investors, subscribers, and journalists who speak on their experiences with the company, from the employee who remembers the good old days working under Spikes and Watt to the subscriber sharing the story of being locked out from placing orders on their account.
This documentary will stir anger in you, it will inform you, it will entertain you, but most importantly it will inspire you to see what the power of resilience looks like in entrepreneurship — especially what it looks like for Black entrepreneurs who are not afforded the same opportunities when it comes to investment capital and access as their white counterparts do.
It’s sad that there are so many stories about the irresponsible white CEOs: Elizabeth Holmes, Adam Neumann, and Trevor Milton just to name a few who have committed wire fraud and cheated their investors out of millions from their own hubris and charm. Meanwhile, there are hardworking Black entrepreneurs who are rarely given the benefit of the doubt as investors quickly turn the other way.
This documentary illustrates to the viewer what Black entrepreneurs deal with in the world of business. It’s also valuable that Spikes and Watt got the opportunity to tell their story of how this all went down and who ultimately was accountable for this fraud.
MoviePass, MovieCrash made its premiere at the 2024 SXSW Film & TV Festival. It is an HBO Documentary film and no release date has yet to be announced.
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