MoviePass is making a comeback, and I couldn't be more excited to help destroy it again

Business 101 probably cautions entrepreneurs against comparing their products to the Hindenburg disaster during pitch meetings. Still there’s likely no better analogy for MoviePass, a startup that during its 2018 heights covered the cost of more than 50 million movie tickets while expecting little in return from subscribers. The deal seemed so good that despite my evangelical enthusiasm for it, many friends actively avoided signing up, assuming they’d be party to fraud. 

To my friends' credit, it became one of the great financial disasters in recent history not named Quibi. MoviePass is making a comeback this summer, apparently, somehow, with a similar app, revamped business model, and new technology that its leadership believes will shore up past issues and finally create the app as intended. I am very skeptical and equally thrilled.

For the uninitiated, MoviePass was a startup created in 2011 with the goal of making filmgoing affordable for the viewing public. In its first iterations, the app-based subscription service offered different tiers in different cities, the highest of which vaulted to $100 monthly for unlimited access to movies and 3-D screenings, which had a mass resurgence following 2009’s "Avatar." 

You had to be within about a football field’s length of the moviehouse to reserve your tickets in the app—for those of us gaming the system who frequented New York’s Union Square Regal, this could be done during a subway stop under the theatre. You'd then head to the box office and swipe your member card, which was already preloaded with the cost of that ticket.

But paying $15 to $20 for the limited lowest tier, much less $100, was arguably too high a price for something this dubiously designed. So as an experiment, MoviePass' leadership dropped the fee for its unlimited pass to just $10 per month, limiting each user to one film per day. The goal was to significantly grow its subscriber base and then restructure its pricing model.

Then all hell broke loose. 

MoviePass was, and I’m not exaggerating, the best thing that happened to me in 2018. For the cost of $9.95 that March, I saw $121.80 worth of films—more than 90 percent of which was subsidized by the fledgling startup. I was a “Power User,” but seeing even one $14 film at Brooklyn’s Alamo Drafthouse more than eclipsed the cost of my monthly subscription. 

While I was writing for the Wall Street Journal, then-MoviePass CEO Mitch Lowe described the strength of the service to me as “bad movie insurance,” allowing filmgoers to venture beyond critics’ choices and box office bonanza toward the artistic, the obscure, the experimental. At its height, MoviePass had more than 3 million subscribers, and Lowe boasted that the app sold 22 percent of tickets for the indie comedy “Gringo” and 55 percent of NY tickets for the Mister Rogers documentary “Won’t You Be My Neighbor?”

“The film industry is predicated on taking your money before you see the product,” explained Craig Detweiler, filmmaker and author of “Into the Dark: Seeing the Sacred in the Top Films of the 21st Century” when we spoke in 2018. “It’s actually a high-risk venture for audiences. MoviePass shifts that model and puts the power back in the hands of the filmgoer.”

Which is great. However, even with my limited business savvy, I know that making money is an important element of a company continuing to exist. MoviePass crashed and burned spectacularly in 2019 after hemorrhaging nearly $150 million per quarter. The stock price for parent company Helios and Matheson Analytics Inc., which traded as high as $2,285 per share early in 2018, plummeted to just 5 cents per share that August while Lowe, once a Netflix executive, took rushed stabs at various business models. One idea included capturing subscriber data to help studios directly market to specific audiences, which he hoped might keep things afloat. 

This explains the apropos image of the Hindenburg lighting the stage as new MoviePass CEO Stacy Spikes announced the service’s summer 2022 relaunch during a Thursday event at Manhattan’s Lincoln Center. Spikes, donning the archetypal black turtleneck CEO’s are meant to wear during major announcements, was actually one of the company’s initial founders before his unceremonious ouster in 2018. He bought back the company last winter for roughly $14,000 and thinks web3 technology—effectively blockchain, which also powers cryptocurrency, NFTs, and many other things your parents have been asking about—can revive the service.

The flaming zeppelin was followed by the image of a Phoenix rising out of the ashes to illustrate this point. 

"MoviePass 2.0" will return to a tiered system, this time with subscribers purchasing an amount of credits each month based on the level they choose, which can be redeemed for certain films at certain times—new films and primetime showings will cost more credits than week’s old fare and matinees. The credits can roll over month-to-month, and users can accumulate extra credits through watching ad experiences, during which the app tracks your eyes to make sure you’re paying attention, pausing if you look away, before a brand hands over its bounty. 

Subverting the old product-placement model that slyly shoves brands into a film's narrative, this model "basically creates a transaction between you and the brand," Spikes explained, while highlighting that he brought back much of the original engineering team to craft the new app. You can also use credits to purchase a friend’s ticket, something not previously possible during the first iteration of MoviePass. And you can transfer credits to another user should the need arise. 

Despite its failings, the original subscription program allegedly sold more than 4 percent of the nation’s tickets in 2018 at more than 4,000 theatres. It also spurred companies like AMC to start similar membership services that are thriving today and helped increase the overall value of the movie theatre market by 6 percent during its flash-in-the-pan success, Spikes says. Now the goal, or “Moonshot” as he calls it, is to sell at least 30 percent of movie tickets via the app by 2030. 

As always, the internet wasn’t terribly kind about the news, with Twitter user Pete Blackburn of Bally Sports joking that he "liked the old version of MoviePass where I gave you $5 a month and you let me bankrupt the company." But Franklin Leonard, who founded Hollywood’s Blacklist which champions the greatest screenplays not yet produced, posted a note of support. "It's important to remember that the new MoviePass team is not the MoviePass team that ran the company into the ground," he wrote to followers. Oh the humanity.

MoviePass has the potential for one of the great second acts in startup history, with Spikes fulfilling a similar narrative to how Steve Jobs returned to Apple at its lowest point. That probably explains the turtleneck. So, yes, of course I’ll download the app the day it’s available and test its limits once again. Even if this one really does turn out to be a fraud, I’ve profted so much from the experience at this point that I’ll still come out on top.