MoviePass Cofounder Says the Unlimited Deal Was Only Supposed to Be a 'Promotional Thing'Apr 13, 2019
MoviePass thrived and nearly died by the $10 per month unlimited movie-viewing plan it introduced in 2017, and it's not out of the woods yet. But the radical pricing plan that brought the company national recognition and millions of subscribers, then infamy and customer fury, was only supposed to be a temporary deal, according to Stacy Spikes, one of the co-founders of the company.
Spikes founded MoviePass with Hamet Watt in 2011. The ticketing startup did not get much attention among movie-goers until the fall of 2017 when the company dropped the price of its subscription from around $30 to $10 per month, for a movie a day. Millions of people subscribed and the company started hemorrhaging money, paying movie theaters for tickets. The problems continued to build for MoviePass as it changed it's model, again and again, confusing and alienating its subscribers.
In the midst of that controversy, MoviePass fired Spikes. He's stayed relatively quiet about the company since then--mostly focusing on his new startup PreShow (that's a whole other can of worms), but he finally spoke about his firing in an interview with Business Insider published on Friday.
The interview mostly goes through the development of the company through Spikes perspective, but he provided some interesting insight with regards to the pricing plan.
According to Spikes, when the analytics firm Helios and Matheson bought a majority stake in MoviePass, the proposal asked MoviePass to temporarily lower the subscription price to $10 so that it could build to 100,000 subscribers.
"The $10 was thought of as a promotional thing, in a way celebrating [Helios and Matheson] buying us," Spikes said in the interview. "But we hit 100,000 in 48 hours. [Laughs.] So I'm like, 'OK, turn it off. We reached our goal.'"
Spikes said that's the point when a division began in the company. He said he and some others "were methodical about testing price point," and had tested a range from $12.99 to $75, and they were being thoughtful about the long-term sustainability of the plan's pricing. But other people in the company were too excited about the subscription numbers to change the price and plowed ahead.
"We knew what was sustainable. But the overriding voice was 'No, this is awesome, look how fast we're growing.'" Spikes said in the interview. "And it was this moment of 'but $10.' It doesn't fly. Now the plane is falling."
Spikes said he did not hide the fact that he "was not a happy camper." On January 9, he apparently found out over email that he was fired. He believes it was because he "disagreed on the approach" supported by other executives. Spikes said he hasn't spoken with Helios and Matheson CEO Ted Farnsworth or MoviePass CEO Mitch Lowe since he was fired.
Gizmodo asked MoviePass if it could confirm that the $10-per-month plan was originally meant as a temporary deal or if it wanted to comment on Spike's statements, but the company declined to comment. MoviePass also declined to comment to Business Insider about the interview.
The plane continued to fall after Spike's firing, but it still hasn't crashed. MoviePass revealed a new unlimited plan in March. Maybe this one will stick around for a while.