At 14 years old, Stacy Spikes began plotting ways he could get into the movie world. He worked in a video store as a high schooler in Houston and left Texas before leaving for California with only $300. He got a job as a production manager at a production company, worked in film soundtrack marketing at Sony, and was vice president of marketing at Miramax by 27. Spikes founded the Urbanworld Film Festival in 1997 and designed an avant-garde movie subscription system nearly a decade later.
Like most Black founders, Spikes struggled to find investment capital and investor confidence in the market for his subscription-based movie ticketing service, MoviePass. He sold the company to new owners who soon ran it into bankruptcy. Spike is now rebuilding MoviePass, achieving unprecedented profitability and growth.
MoviePass launched in 2011 to huge fanfare. The service allowed subscribers to purchase up to a movie ticket a day for a monthly fee and had 19,000 people sign up in the first 24 hours. Following its launch, entertainment giants AMC and Regal announced that they would not support MoviePass. Spikes, nonetheless got the company up and running. More hurdles such as trouble raising capital and achieving mainstream prominence would later crop up, stunting the company’s growth.
“They turned us off before we were ever born. We were born and dead within a day,” Spikes summarized MoviePass’ entry into the industry.
In 2017, MoviePass was acquired by Helios & Matheson, an analytics and consulting company. The new ownership significantly lowered the subscription cost to $9.95 per month, prompting the user base to rise to over three million in less than a year. Although they had initially intended for the new price point for the unlimited subscription to last only until the service gathered a solid base of subscribers, the explosion in popularity and new subscribers led to the prioritization of rapid growth over near-term profitability. Spikes, who repeatedly warned the company leadership about the unsustainability of the new pricing model was unsustainable was fired in 2018.
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MoviePass soon began to suffer from financial challenges. The company’s cash expenses exceeded its revenues by $40 million and the business was running on a deficit. It racked up hundreds of millions in debt, with new costs and app glitches limiting subscriber’s access to the app. MoviePass ultimately shut down in 2019, with its parent company filing for Chapter 7 bankruptcy and ceasing all business operations in 2020.
But Spikes was not about to give up on his brainchild.
In 2021, a New York court gave ownership of MoviePass to Spikes. He relaunched the company’s movie theater subscription under a new model the following year. It offered three subscription tiers, none of them unlimited with pricing varying by market.775,000 customers signed up for the service’s waitlist before a beta version was rolled out. The MoviePass beta version was live in nine U.S. markets including Atlanta, Chicago, Dallas, Houston, Indianapolis, Kansas City, Oklahoma City and Tampa Bay at the start of 2023.
The company has raised seed financing to accelerate the beta relaunch of its movie theatre subscription service in more markets. It also intends to use the funding to develop and implement the company’s Web3 strategy, which includes virtual reality cinema experiences and using technology to drive traffic to theaters. Since its resurrection, over a million movies have been watched by users on MoviePass with 2023 being its first-ever profitable year
“There’s a wonderful thing that happened when MoviePass went away. You had a lot of people introduced to subscription models, [which] validated that subscription models work, and that consumers like them,” Spikes said about how the industry has changed over the years.
