Co-founder of MoviePass, Stacy Spikes, is regarded in many cycles as the godfather of movie ticket subscriptions. He pioneered the idea, which quickly caught up with movie lovers and critics, and was considered novel in the United States. However, years later, his vibrant entity which had a promising revenue inflow, suddenly crumbled.
Spikes was sacked by the new owners of the company, while hundreds of millions of dollars the business once had sunk to over 99.99 percent till they were eventually kicked off the Nasdaq platform. Despite the disappointments he faced, the humble beginnings he experienced while building MoviePass from scratch were still fresh in his mind.
His idea to build a global movie subscription platform traces back to the days when he used to organize the Urbanworld Film Festival in the early 2000s. He began looking for innovative ways to scale the film festival and got a better clue of what he wanted to do when he had a conversation with CEO of Loews Cineplex, Travis Reid.
RELATED STORIES
The idea of issuing subscriptions for viewers to watch movies soon materialized, and when the piloting of the program became a success, like many startups, Stacy was faced with the challenge of raising funds for the takeoff of the company. He engaged one of the key fundraisers at the time, Hamet Watt, to assist to crystalize his novel idea. With Hamet’s support, he raised $1 million to co-found MoviePass, according to Business Insider.
When the company was launched in 2011, it was a massive success with over 19,000 movie lovers pushing to subscribe to the platform to watch movies for $50 per month. However, while Stacy was basking in his newfound fame, he hit a snag; the app had been built on the server of MovieTickets.com without approval from the mother organization, AMC.
The company had to switch the model from movie lovers logging in online to generate their tickets to presenting the same at the doorsteps of the theatres, which compelled the team to build a geolocation system to provide real-time data on the tickets the subscribers generated. They mapped every movie theatre to ensure they gained their money’s worth from their innovation.
The company began witnessing its bad days when AMC decided to plug them out of its system, and the new CEO of AMC disclosed they didn’t need them. The direction of AMC had changed, they wanted to build a similar project as MoviePass.
Following this predicament, Spikes reached out to Helios and Matheson Analytics for support and partnership. The mother company of Helios and Matheson Analytics initially proposed pegging the subscription rate at $10 to enable MoviePass to reach a target of 100,000 subscribers. Though Stacy wasn’t enthused about the idea, the company’s dire situation compelled him to accept the proposal to enable MoviePass to stay afloat.
However, subsequent disagreements over the subscriptions and power tussle with the new management pushed him out of the business. He predicted the subscription rate of $10 wasn’t financially viable and will eventually lead to the collapse of MoviePass, and as predicted, the company later collapsed. According to Bloomberg, the business would be worth $50 billion if it had not filed for bankruptcy in 2021.
Today, Spikes runs another organization modeled on his MoviePass experience, which he calls, PreShow.
One unique aspect of the PreShow app is an inbuilt technology that detects when the viewer is watching the screen of their mobile device. They are offered the option to watch ads for rewards such as tickets, during this period. It has been a successful journey for Spikes since the start-up hit the road in 2021. He has since been able to raise $3 million in seed funding to give the business the boost it requires to be financially viable.
