The cofounder of MoviePass recounts what led to his firing from the company he'd built from the ground up

MoviePass

  • MoviePass cofounder Stacy Spikes breaks his silence about what
    led to his exit from the company.
  • Spikes told Business Insider that in January 2018, he was let
    go after months of disagreeing with the new owner of MoviePass,
    Helios and Matheson Analytics, about the $10 subscription price
    point.
  • Though it was giving the company thousands of new subscribers,
    Spikes felt it wasn’t sustainable.
  • Visit
    BusinessInsider.com for more stories
    .

MoviePass cofounder Stacy Spikes admits he was not a happy
camper a few months after Helios and Matheson Analytics bought
MoviePass in summer 2017. And it’s likely a big reason why he was
then let go in the new year. 

Since 2005, Spikes had been building the scrappy startup into a
revenue stream the US box office had never had before: movie-ticket
subscription. The app was evolving with the times and slowly
growing in popularity among moviegoers, with the price point
ranging from $12 a month to up to $75 (which included access to 3D
and IMAX showings). 

But the moment when the company suddenly came into the popular
lexicon, and grabbed the attention of the industry, was in 2017
when Helios and Matheson Analytics became interested in buying
MoviePass.

“Ultimately the proposal came in at $25 million for 51% of the
company,”
Spikes told Business Insider
. “And in the proposal it said they
wanted us to temporarily drop the subscription price to $10 to help
climb up to 100,000 subscriptions.” 

Spikes said nothing in that proposal worried him, and in the
summer of 2017, Helios and Matheson became the owners of MoviePass.
In August of that year, the $10-a-month to see a movie a day deal
was launched and MoviePass hit 100,000 subscribers in 48
hours. 

Stacy Spikes Getty“So I’m like, ‘OK,
turn it off, we reached our goal,'” Spikes said.

But the attention MoviePass suddenly received was too
intoxicating for most at the company, especially the new owners.
And despite Spikes’ warnings, things went forward.

“Where things started to divide is: Myself and a handful of
others were methodical about testing price points,” Spikes said.
“The lowest we ever got down to was $12.99 and as high as $75,
where we added Imax and 3D. We knew what was sustainable. But the
overriding voice was, ‘No, this is awesome, look how fast we’re
growing.’ And it was this moment of ‘but $10.’ It doesn’t fly.”

By December, Spikes said the company was growing at a quarter
million subscribers a month. And despite his warnings that the
company could not survive at that price point, no one would
listen. 

With a clear divide between Spikes and the new leaders of the
company — Mitch Lowe, who came on as CEO in 2016 (Spikes took the
role of COO), and Helios and Matheson CEO Ted Farnsworth — Spikes
said he received an email on January 9, 2018 that his services we
no longer needed at the company.

Read more:
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“After that, I’ve never spoken to Mitch or Ted,” Spikes said.
“And I’ve been watching it all unfold, like everyone else.”

Spikes said he and the leadership “just disagreed on the
approach.” But he’s not bitter about leaving the company he
launched because, in his eyes, the idea of movie-ticket
subscription working in the industry became a reality with AMC,
Cinemark, Sinemia, Studio Movie Grill, soon
Alamo Drafthouse,
and others all getting into the movie-ticket
subscription game.

“The good side was cinema had not been taken seriously since
Netflix really got its footing,” Spikes said. “So what I liked
about that was this had risen to the zeitgeist of conversation. 75%
of our members were under the age of 26. Cinema was an event people
cared about again. So while there is a sadness around the brand, I
was happy to see that this is front and center.”

Read
the entire Business Insider interview with Stacy Spikes. 

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The cofounder of MoviePass recounts what led to his firing from the company he'd built from the ground up