MoviePass/Movie Crash is Cautionary Tale on Investing in Entertainment

Imagine creating a model for movie going that allows patrons to screen any movie – any theatre – any day. Seems logistically impossible, but two budding Black entreprenuers  Stacy Spikes and Hamet Watt did exactly that.  MoviePass was a movie lover’s dream, offering access to tickets at a discounted monthly subscription rate. In 2017, with a “too good to be true” promotional deal of $9.95 a month, subscriptions exploded, the company’s stock soared, and investors rushed in.   In a span of eight years, MoviePass went from being the fastest growing subscription service since Spotify to total bankruptcy, losing over $150 million in 2017 alone.

Directed by Muta’ Ali and produced by Mark Wahlberg’s Unrealistic Ideas, MoviePass MovieCrash documents the journey of these young  enterprising co-founders, who were cast aside and forced to watch from the sidelines as white executives seized control.  With a lethal combination of extravagant, fraudulent spending topped by lavish parties at the Sundance Film Festival, Coachella, and Cannes Film Festival, the once promising company fundamentally became an unsustainable business model, leading the company to abruptly shutter in 2019.

Featuring exclusive interviews from the Spikes and Watt, former CEO Mitch Lowe, former employees, investors, subscribers, industry analysts, and the journalists at Business Insider who originally reported on the rise and fall of the company, this doc uncovers the outrageous  story behind bold innovators attempting to disrupt the cinema-going paradigm.  It also unapologetically illustrates how the key players  peddled  false narratives, flew just a little too close to the sun while creating a wild ride that ended with hundreds of millions of dollars in lost value.

Pardon the expression, but I’m just gonna address the elephant in the room. The most fascinating narative  is how the corporate sector, even in the 21st century, doesn’t respect Black entrepreneurs until they are flanked by others seemingly with more accessible and dependable monetary capital.

Despite the fact that Spikes literally was a product manager at Motown, Vice-President of Marketing at Miramax films, was named one of The Hollywood Reporters’ 30 Under 30 and created his own film festival after being turned down to partner with the Sundance Film Festival to showcase Black filmmakers and their films.  Watt was a notoriously known millennial mogul with the innate ability to securing millions of dollars in funding in staggering short periods of time, as well as, co-founder and Chairman of bLife, a wellness innovation company before becoming co-founder and  Chairman of MoviePass. Their pedigree and track record in the business sector was well respected and documented.

But in the end they got the last laugh. In 2022, Lowe and Farnsworth were indicted by the Department of Justice on one count of securities fraud and three counts of wire fraud.  Both have pled not guilty and are still awaiting trial.  If convicted, each face up to 20 years in prison on each count.  Following the bankruptcy of MoviePass, Ted Farnsworth’s next venture also received investment from Hudson Bay Capital Management, which was quickly delisted from the Nasdaq exchange after ists share price dropped dramatically.  In 2024, Khalid Itum was found guilty of two counts of wire fraud for embezzling at least $260,000 from MoviePass and HMNY in connection with the Coachchella party in 2018.

Not one to be defeated, after watching his money literally get flushed down the toilet, Spikes took a page from Steve Jobs and Michael Dell, who lost companies they founded only to rise like a phoenix from the ashes, repurchasing and relaunching the company he was once ousted from as co-founder.  In 2023, after Spikes’ re-acquisition, MoviePass had its first profitable year in the history of the company.

MoviePass MovieCrash is a cinematic cautionary tale of how corporate, greed and misinformation can lead to ruin, yet make one wiser, smarter and just a little more savvy in the long run.