- Stacy Spikes told Insider he plans to put MoviePass out of beta and make it available for all by the summer.
- Spikes said an unlimited option is currently being developed — but it won’t be for $10 a month.
- Spikes’ memoir “Black Founder” is available now.
While many of us were trying to just get through our everyday lives during the pandemic, Stacy Spikes was figuring out how to get us back to the movie theater. And then the idea hit: bring back MoviePass.
You would think Spikes would want to run as far away as possible from the movie-ticket-subscription startup. In 2018, he was ousted from the company he cofounded at the hands of then-CEO Mitch Lowe, who then — alongside parent company Helios and Matheson CEO Ted Farnsworth — drove MoviePass into the ground by sticking with a $10-a-month subscription price that was too good to be true.
But after a 2020 bankruptcy auction left MoviePass orphaned, as there were no competitive bids, Spikes saw the opportunity to reclaim what was his. In November 2021, he relaunched the beta version that’s now in nine cities and uses a new credit system for subscribers to see movies.
However, that wasn’t enough for Spikes, 54, who also completed his memoir. Titled “Black Founder: The Hidden Power of Being an Outsider” (available now), this book vividly recounts his career, which has taken many turns. He started at Motown Records, where he worked alongside then-newcomers Boyz II Men and Queen Latifah. He worked at Miramax during the Weinstein brothers’ zenith in the 1990s. He created the groundbreaking Urbanworld Film Festival, one of the first festivals focused on spotlighting works in the multicultural community. And finally, he cofounded MoviePass with fellow entrepreneur Hamet Watt. But it wasn’t all fun, as Spikes also reveals an alcohol and drug problem early in his career, and that he even contemplated suicide after one failure as an entrepreneur.
Insider had a video chat with Spikes about his career and the future of MoviePass — which includes the metaverse, leaving beta, having a true relaunch by the summer, and bringing back an unlimited option.
The best advice Spikes got early in his career was to never stay somewhere more than 4 years unless you have ownership in the company
What was the biggest thing you learned from writing this memoir?
I’d never written a book before, so the experience is very introspective and reflective. So my life, my career, leading up to the highs and the lows, I think that the biggest takeaway is what you thought was something bad ended up being something good. Often we see something goes wrong and that’s it. This failed. But really there’s no such thing as failure, it’s just learning. I think the book changed how I viewed my experiences.
Most people see this on stands or hear about it and will immediately say “it’s the MoviePass guy,” but in reality you have been in music, created Urbanworld. Looking back on your career, was there something that in the past you didn’t fully appreciate, but years later you’ve realized you needed that to get to where you are now?
Jheryl Busby, who was the CEO of Motown after Berry Gordy, said to me, “Don’t stay anywhere more than four years unless you have ownership in the company.” [Laughs.] I was a newbie, I was 21 years old, I didn’t know what he was talking about. I was just so happy to be in the music industry. For him to say that it weighted on me.
And I was told very early on to read biographies all the time. Being given that piece of advice, there were many times I would be in a situation that I could recall from someone’s book what they did in that moment. It gave me a knowledge base that is virtually free. I mean, you can download everything Richard Branson has done, Elon Musk, Steve Jobs, and those books tell you what they did in business. I have to be very honest, Steve Jobs’ book affected me thinking about getting MoviePass back. If I hadn’t read that book, maybe what he did would not have been in my thought process. Also biographies give you details of what happens in the boardrooms and the proxy wars and how many shares you need, that’s the stuff that you’re not going to get in a quick news article.
I feel regardless of the reader’s race or ethnicity they are going to get something out of the book. But is there a reason behind it being titled “Black Founder”?
We went around with the title: should we call this “Founder” or “Black Founder,” and the point being was I was trying to address an issue of if you walked up to people on the street and said, “Tell me what a tech founder looks like?” They are going to describe Mark Zuckerberg, Elon Musk, Steve Jobs. They are not going to think about my skin tone. I felt I needed to be bold and lean into the fact that there’s so few diverse tech founders that you got to go be the Jackie Robinson and start the conversation that only 3% of venture capital are women or minorities. It’s to open up people’s minds so when those founders walk into your venture capital office you don’t say, “Eh, they don’t look the part.”
Or even recognize you are the founder. You wrote in the book how in the early days of MoviePass, you would go to meetings with your team and people would go to the white person next to you thinking they were Stacy Spikes.
Yeah. One time they thought the person I brought to the meeting, who is white, was the founder.
He put in the book that he once contemplated suicide, as a caution for those who can’t separate themselves from their companies
Outside of the big moments in the book like working with Boyz II Men in their early days, battles with the Weinsteins when you were at Miramax, and starting MoviePass, you open up about your personal life: your alcohol and drug abuse early in your career, contemplating suicide when things weren’t going well as a young entrepreneur. Was it therapeutic to put all of that on the page?
I’m still terrified that I wrote those things down. [Laughs.]
But as a reader, it really shows us the human side of a businessperson. You just aren’t giving us a highlight reel.
Nobody talks about the dark side of entrepreneurship. You don’t hear it until the person is in trouble and they have legal problems. Yes, early on when I was young I was a bat out of hell and used alcohol and drugs and ended up in the hospital and swore I would never do that again. I realized I cared more about being successful in my life than getting high.
And I have had three massive failures that I had to get up from, and the first time I didn’t know if I wanted to keep on living. When a founder mixes their identity so completely with their business that if it fails you believe you are a failure and you cannot come back from that, that’s a classic mistake where you mistake yourself for the business.
Most entrepreneurs aren’t successful until they are in their 40s or 50s, however, we only celebrate the unicorns, the 22-year-old who was in their college dorm room and wrote some code. That’s not reality. I wanted to put that down because I see so many times people approach me and think MoviePass was my first business. No. Not at all. I wanted to debunk that myth that you are your business and if it fails you fail. There are many people who get off the canvas and do it bigger and better the next time.
You touched on reading the Steve Jobs biography as being one of the things that got you motivated to buy back MoviePass, what were other things that made you feel you wanted to give it another go?
Just the people who write you off. I really do think it’s part of the American spirit: never give up. I just felt, why am I not going to at least try when what I live on is working in the movie industry, a medium where it’s telling the ultimate story of overcoming impossible odds. And not to get too sentimental, but I touched on this in the book, I’m a descendant of slaves and they had so many sacrifices for me to get to this point in time in history that there’s no fucking way I’m going to give up on the fact that they died for me to be here at this moment. So I’m never going to give up on what they had to go through for me to have the pleasure of sitting here in this moment in history.
The MoviePass beta version is focused on the credits system, e-ticketing, and fixing bugs
What have been the biggest challenges in getting this beta version of MoviePass off the ground?
One is you’re introducing a new idea with the credits system. So you have to get people used to that. Though it’s the same thing as the past of using the MoviePass card to see movies, there’s also understanding that you now can only go if you have enough credits. So there’s some education there. The other thing is we’re activating a lot more e-ticketing theaters. Like in Kansas City, almost 50% of the theaters there are e-ticket partners with MoviePass so you don’t need your card. So that’s new.
I’m always a crawl, walk, run CEO. I like to test something, get it fixed, then you go wide. And where we are right now is doing a software update from MoviePass 1.0 and we want to make sure we get those big kinks worked out.
From time to time, I will hear from people who are using the beta and they say sometimes the app’s geo locator isn’t working or the card isn’t working. Are those legitimate bugs?
Yeah. 100%. And that’s why we do a beta. You just don’t go prime time out of the gate. When we bought the company back, we got the old app and old code. The code was 2013 to 2018. So basically we were starting the company back up on an ancient iPhone. We had to figure out the stuff we wanted to keep, what we wanted to update, and what we wanted to rebuild from scratch. And because of COVID, some suppliers we used to get information from didn’t survive the pandemic. So things were buggy because we had to update a lot.
Would you say it’s still buggy?
No, we’re close. On Christmas I was answering the customer service lines because people were at the theater and “Avatar” showtimes weren’t showing up. And it was just “Avatar” in one city for some reason. The reality was it was a glitch and I as the CEO got on the customer service chats and said, “This is the CEO and we know there’s a problem and engineers are fixing it.” That’s what happens sometimes.
Everyone across the country invited to use MoviePass who is still on a waitlist will get in the beta by the end of January
How many cities now are in beta?
There are nine and beginning today the rest of the country who were invited in that initial email invitation waitlist will be able to use the service.
How are you doing the tier pricing in beta?
What we found from the last MoviePass endeavor is that all cities are not equal, they have different prices. There’s three zones in regards to the national ticket average: a movie ticket can be as cheap as $8 in a place like Waco, Texas. The next zone is like in Chicago or Dallas and that price can go to $11-$13. And then with New York and Los Angeles it will be as high as $20. We are in the early stages of mapping out our credits nationwide.
What I need to say is everyone coming into the beta, the pricing that we have are not the fixed prices. All these people are the guinea pigs. You will see fixed prices when we leave beta. Right now, we are working on making sure that our model is functional and profitable and that the consumers and theaters are getting benefits with a few hundred thousand people. Once we have that all right we’ll open the doors to everyone.
Has there been a popular movie subscribers have been going to see?
The ones that did great were the big box office ones. The number one in our system is “Avatar: The Way of Water.” Number two was “Black Panther: Wakanda Forever.” But I think what you’ll see more over time, and when there’s more titles in the marketplace, MoviePass disproportionately outperforms around the independent film and Oscar-contending titles. I think that will become the case once we are in New York and LA.
How many people will be using the beta version once you open it up to the country.
We’ll announce milestones when we hit them. Right now, we are literally controlling the number of people that can use it.
MoviePass is headed to the metaverse
What are the Web3 plans for MoviePass?
We are playing around with a metaverse. There’s a beta of that and I’ve seen it, it’s beautiful. We are looking at NFT ticketing to allow the studios to be able to create digital collectibles for fans. We are looking at the possibility of launching a DAO, which is a decentralized autonomous organization. I can’t give away too much, but it will change how you attend movies and how they are financed. We are looking to build out theaters in The Sandbox, the gaming VR world which is owned by Animoca, which is our lead investor. So how cinema is going to play in those universes, we’re kind of the tip of the spear for them. They have more than 400 Web3 game investments, so they are one of the leaders in that space.
Give me an example of how one aspect of it would work.
Remember when Tom Cruise was flying the helicopter at the end of the last “Mission: Impossible?” Imagine the manufacturer of that helicopter providing a VR test flight of that helicopter through MoviePass. So if a subscriber does the test flight, that person would get added credits and can see the movie on Imax or another format. We think the metaverse is going to be where brands can give you unique, first-person experiences.
Is PreShow still in play in this Web3 landscape?
The idea of you being able to own and control your attention and monetize your own time and attention is where people are going. That’s the future. So there is a version of that that’s coming, we just have to make sure we help get those pieces right. But I want to be clear: this is an opt-in, do it if you like. You control your experience. You control your data.
One of the biggest hurdles for MoviePass in the past was having to pay full price for movie tickets back to the theaters. Has there been any momentum in making discount deals with theaters?
The model change of credits brings the consumer more in line with the marketplace. So the way we looked at it is dynamic pricing. It happens in travel, hotels, Broadway, sports, they all have dynamic pricing but not the movie industry outside of the format you want to see the movie in. What we are taking into consideration is the time you see the movie, the day you see it, is the movie in its first weekend or third week? Is it a blockbuster or an indie? So MoviePass is bringing a software solution. That’s what I see us as, a dynamic pricing software solution for the industry.
Because of this new approach, do you need AMC, Cinemark, and Regal to be involved?
No. We are a universal player, we’re not trying to be in the theater business. We are a technology/software company. The way this is set up, we don’t need them to give us discounts to run or survive. And frankly, if I were them I wouldn’t care where the traffic comes from, I’d just want people in my theater. But that’s just me.
And we have sat down with every chain that wants to talk to us. I personally reached out to Adam Aron at AMC and never heard back. But I had a good conversation with Regal and they have a very open mind to working together, which is exciting, and I talked to Cinemark and that was a good conversation. Plus, the Independent Cinema Alliance, the National Association of Theatre Owners, the conversations have been great. Everybody likes that we have passion for putting freaking butts in seats. That’s what we care about.
Spikes says MoviePass will be available for everyone by the summer, and an unlimited plan is in the works
When do you think you’ll move from beta and open it live to all?
I think by the summer but we might still roll it out in stages because we like to control the amount of people using it. And it lets us be more connected with the subscriber than just opening the floodgates. Also, we are working on a way to reward those who signed up to the beta and have been waiting patiently to use it.
Will you ever go back to offering an unlimited option?
We are already testing that in several markets. In at least two the unlimited option is being tested. We do want to bring it back.
At $10 a month?
[Laughs.] That will never happen again. We are testing an unlimited at different price levels to see where it works best.
With [former MoviePass CEO] Mitch Lowe and [the former CEO of its previous parent company] Ted Farnsworth charged now with securities fraud, in your eyes has justice been served?
The story hasn’t ended. There hasn’t been any actual judgments being passed down that I’m aware of. So I think that story is still unfolding.
I had one lady on the customer service chat over Christmas trying to check into a theater and having trouble and I helped her out. She said thank you and I told her, “This is the founder, and thank you for giving us an opportunity again.” She had said she was an original customer. And then she said, “I lost $9,000 investing in MoviePass.” And then she said, “Can you tell me that won’t happen again.” And I said, “Just the fact that you lost nine grand and you’re giving us another chance, as long as I’m sitting in this seat it’s people like you that I’m going to honor.”
That meant a lot, that this person was willing to come back after all of that because she believes in what we’re trying to do. Those are the people Mitch and Ted need to answer to. It hurts our society and our system if you take advantage of those hard-working Americans who put their money in something because they believed in it and believed in what was said as being true.
So to be chatting with that person and tell them that we can turn this thing around, that was a great moment.
This interview has been condensed and edited for clarity.