Max’s Moviepass Documentary Completely Misses the Point

The big picture

• The MoviePass founder's story of being elbowed by older white men is infuriating, but not widely known.
• The demise of MoviePass was due to unsustainable pricing and unwise leadership decisions documented in
  MoviePass, MovieCrash
  .
• Max's documentary fails to connect the failure of MoviePass to broader problems in the industry and misses opportunities for deeper analysis.

In 2017, MoviePass, a subscription service that offered its subscribers one ticket per day to a movie of their choice, dropped its monthly fee to $10. Even seven years ago, the average cost of a movie ticket was more than that, and the chance to see a month's worth of movies for less than the cost of a single ticket seemed too good to be true, and it was. While this pricing gimmick brought MoviePass a deluge of subscribers flocking to theaters to take advantage of the deal, the numbers never added up. MoviePass filed for bankruptcy and shut down its service in 2019.

The ups and downs of this wild shared experience haven't really been discovered yet, but this week, Max posted MoviePass, MovieCrash, a documentary that goes behind the scenes of the company during its heyday. The documentary, directed by Muta'Ali, does a fantastic job of telling the story of the company's black founders: as the company grew, they were pushed out of management in favor of two older white men, who turned out to be recklessly—and perhaps criminally—incompetent . This is a part of MoviePass history that not many know about and will make your blood boil. But ultimately, the film misses a great opportunity to connect the failure of MoviePass to the many crises facing the entertainment industry today.. Worse than that, it intercedes to prevent the audience from making these connections on their own.

What is “MoviePass, MovieCrash”?

The documentary features interviews with a wide variety of former MoviePass employees, executives and investors. But it opens, satisfyingly, on a former subscriber who remembers the company fondly, unbuttoning his shirt Superman-style to reveal the MoviePass logo. Here's a short version of the company's history, which was founded in 2011 and had 20,000 subscribers in 2015 with modest financial backing. At the time, the cost of subscription was higher and there was a limit to the number of films that could be seen, but the documentary suggests that ticket sales were increasing even with these conditions. However, the company had no way to share in the profits they were creating, and AMC Theatres, with plans to create its own subscription service, was not interested in a partnership. At the time, MoviePass' investors pulled out and Chris Kelly, its main backer at the time, demanded that it bring in a new CEO. Mitch Lowewho had worked with Netflix and Redbox.

Here, the doc retells the story of Stacy Spikes, a former Miramax executive and founder of the Urbanworld Film Festival, who started the company along with Hamet Watt. Both founders are black and describe Lowe's addition as a deal with the devil, but one they had no choice but to make in a world where minorities have less access to venture capital. Soon after, Helios and Matheson Analytics (HMNY), a data analytics firm led by CEO Ted Farnsworth, invested heavily in MoviePass. HMNY's investment would ultimately give it a controlling stake in the company. Under the stepped-up leadership of Farnsworth and Lowe, the monthly subscription fee was reduced to $9.95 per month, which brought the company a huge influx of subscribers and tons of free press, sending the stock price skyrocketing.. However, it was financially unsustainable. Watt and Spikes, who in the documentary express a lot of skepticism about this strategy, were removed from the board of directors of the company they founded, just as the media was starting to take notice.

MoviePass burned through investor capital with no realistic plan to be profitable

The second half of MoviePass, MovieCrash narrates the decline of the company. Lowe and Farnsworth became the new face of the company and minor celebrities. The company spent cash, not just on its core business, but on questionable promotional ideas, including lots of parties, a big spend at Coachella, and a move into film financing, under the banner of “MoviePass Ventures.” The company's debut film as a production company was universally panned Gottistarring John Travolta.

Lowe and Farnsworth persisted in telling the press that the company would soon find revenue streams to make it profitable, most likely through the sale of customer data. The transparent improbability of this prediction attracted negative press attention, especially as the company was forced to make dire financial disclosures. At the same time, the understaffed support team struggled to keep up with the ballooning subscriber base, which reached 3 million members at its peak. The app crashed repeatedly, most infamously around the launch of Mission: Impossible – Fallout. The brand became a brand and the stock value plummeted. Spikes and Watt, in addition to their role in the company they founded, lost millions in the value of their shares.

Legal trouble followed when Lowe and Farnsworth were investigated for their role in deliberately limiting their app's ability to service requests, creating roadblocks that would leave users unable to buy tickets in order to stem the money hemorrhaging. They also currently face securities fraud charges related to misleading statements made about the financial sustainability of the MoviePass business model (surprisingly, Lowe was fully involved in the documentary). Behind it all was Hudson Bay Capital, the hedge fund that provided much of the money to keep the company going through Ted Farnsworth and HMNY. MoviePass, MovieCrash suggests that the hedge fund may have had sinister intent in its funding, but does not want to explain anything, part of an overall cautious strategy. The documentary never really follows the money beyond its small-potatoes targets.

The documentary draws a hard line between Moviepass and Netflix, but should it?

Although MoviePass, MovieCrash presents a damning portrait of the greed of two corporate charlatans, often seems interested in drawing a line between them and their business environment, as if they were the only two bad apples in the world of finance.. First, of course, is the line drawn between Farnsworth and Lowe and founders Spikes and Watt. In the documentary, Spikes and Watt are likable protagonists, but they are also devoted entrepreneurs and, despite their experience, keep their faith. Towards the end of the film, Spikes says that what made the demise of MoviePass so difficult for them was that the product was not a “market failure” in a pure sense. It's extremely understandable why you would feel that way, but it doesn't seem accurate that the problems MoviePass ran into are so far removed from business as usual. There is no “market” that is impervious to the influence of men like Farnsworth and Lowe.

Frustratingly, the documentary seems focused on drawing a hard line between MoviePass and Netflix. Streaming services are chasing the documentary. MoviePass is being touted as the company that will bring customers back to theaters, while the allure of streaming is driving them away. Netflix is ​​the only streaming company mentioned, but it is mentioned constantly. When the company is on the rise, MoviePass is the “Netflix for movie theaters.” When retail investors are buying their shares, it's because they “missed Netflix.” And when Mitch Lowe comes across as less professional than he's marketed, it's his bloated Netflix connections that deflate: he was just the guy who sold them their blank DVDs. Watt literally describes his methods as “un-Netflix-y.”

But how wasn't MoviePass really Netflix-y? Like MoviePass, Netflix's business model involved burning a lot of capital to attract subscribers. During the time of MoviePass, Netflix also charged most subscribers around $10 a month for a steady stream of original content without ads. Isn't this offer too good to be true, too? The $250 million sum that accounts for the bulk of MoviePass' losses is only $50 million less than the production budget for Jupiter's Legacy, a single Netflix original series that disappeared without a trace. His business decisions often seem self-sabotaging, such as when he threw himself Glass onion: a mystery beyond the knife of theaters while making money. And while Netflix has turned a profit recently, following a combination of cost-cutting, the addition of ads, increased fees and a crackdown on shared passwords, for a while it was unclear how the business model would work. . while racking up billions of dollars in debt.

The similarities between Netflix and MoviePass are significant

The importance of making the connection between MoviePass and the streaming model doesn't mean that Netflix executives are like Farnsworth and Lowe, or that we should expect an equally salacious behind-the-scenes documentary about them (Netflix, network tricks?) But while MoviePass was hemorrhaging cash subsidizing its customers' cinema, streamers parted with much larger sums to pay us to stay at home. After news of recent box office disappointments, many have wondered if movie theaters are “dying,” killed by a more convenient medium. But with the live streaming model as well, it's important to remember that services like Netflix have been backed by a lot of cash, just like MoviePass. If viewers had to pay what it cost to make streaming profitable, it's unclear whether they would.

The worst sin of MoviePass, MovieCrash is that he doesn't really like movies, nor does he respect those who do. Of the three million former MoviePass subscribers, the documentary seems to have gone out of its way to make weirdos (even if they're all very sweet). And when they talk about how many movies they saw during the time when going to the movies was practically free, the mood shifts to open disgust. Of course, we never express disgust at people who “watch” their favorite shows on streaming. Why that? Maybe because huge sums have been spent to make us think streaming is the new normal and we're following the money.

MoviePass, MovieCrash is available to see Max.

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