1
00:00:20,145 --> 00:00:21,895
What are you wearing right now?

2
00:00:21,896 --> 00:00:23,856
What am I wearing?

3
00:00:23,857 --> 00:00:26,316
Oh, it's...

4
00:00:26,317 --> 00:00:28,610
I know. I still
got to support.

5
00:00:28,611 --> 00:00:29,903
Ugh.

6
00:00:29,904 --> 00:00:32,197
It's my Superman
moment right now.

7
00:00:32,198 --> 00:00:33,824
A lot of people stop me
when I'm wearing this shirt,

8
00:00:33,825 --> 00:00:35,659
and they go, oh, my
God, that's so cool!

9
00:00:35,660 --> 00:00:37,369
MoviePass, we remember them.

10
00:00:37,370 --> 00:00:39,831
Whatever happened to those guys?

11
00:00:41,833 --> 00:00:43,167
<i>If you're anything like me,</i>

12
00:00:43,168 --> 00:00:44,960
you wish you had
seen all those movies

13
00:00:44,961 --> 00:00:46,462
that everyone's talking about.

14
00:00:46,463 --> 00:00:49,381
<i>Well, there's one red-hot
company that gets it.</i>

15
00:00:49,382 --> 00:00:50,342
<i>MoviePass.</i>

16
00:00:50,343 --> 00:00:51,884
<i>- MoviePass.
- MoviePass.</i>

17
00:00:51,885 --> 00:00:53,135
<i>The popular movie-ticket app.</i>

18
00:00:53,136 --> 00:00:54,636
This is a MoviePass card.

19
00:00:54,637 --> 00:00:56,972
This was my best friend
for quite a while.

20
00:00:56,973 --> 00:00:59,099
<i>MoviePass, a
subscription service.</i>

21
00:00:59,100 --> 00:01:01,018
The Netflix for
the movie theaters.

22
00:01:01,019 --> 00:01:02,728
<i>It sounded like a dream.</i>

23
00:01:02,729 --> 00:01:03,812
<i>You pay a monthly fee,</i>

24
00:01:03,813 --> 00:01:05,856
<i>and you can go to the
movies every single day.</i>

25
00:01:05,857 --> 00:01:07,191
<i>What are you waiting for?</i>

26
00:01:07,192 --> 00:01:08,734
<i>Get your movie on
with MoviePass.</i>

27
00:01:08,735 --> 00:01:11,445
<i>MoviePass's CEO Mitch
Lowe and Ted Farnsworth.</i>

28
00:01:11,446 --> 00:01:13,405
Look at this incredible growth.

29
00:01:13,406 --> 00:01:15,741
<i>We thought this
could reinvigorate</i>

30
00:01:15,742 --> 00:01:17,076
the moviegoing business.

31
00:01:17,077 --> 00:01:19,870
Any movie, any theater,
any day... that was me.

32
00:01:19,871 --> 00:01:21,372
<i>MoviePass has been
very successful</i>

33
00:01:21,373 --> 00:01:23,374
<i>in bringing more
people to the theaters.</i>

34
00:01:23,375 --> 00:01:25,459
This is getting
millions of users.

35
00:01:25,460 --> 00:01:27,044
<i>A year ago, a lot of
people didn't know</i>

36
00:01:27,045 --> 00:01:28,420
<i>what MoviePass was.</i>

37
00:01:28,421 --> 00:01:30,589
<i>It's become such a big
thing. My mom has MoviePass.</i>

38
00:01:30,590 --> 00:01:34,301
MoviePass is the
fastest-growing company

39
00:01:34,302 --> 00:01:36,804
<i>ever in the history of
media, and the stock shot up.</i>

40
00:01:36,805 --> 00:01:38,681
We were worth $80 million-plus.

41
00:01:38,682 --> 00:01:41,058
He'd just spend, spend,
spend, spend, spend.

42
00:01:41,059 --> 00:01:42,559
<i>Going to Coachella,</i>

43
00:01:42,560 --> 00:01:44,770
<i>partying with Big Boi
and John Travolta.</i>

44
00:01:44,771 --> 00:01:46,689
<i>Fifty fucking Cent!</i>

45
00:01:46,690 --> 00:01:49,608
<i>It is an endless list of,</i>

46
00:01:49,609 --> 00:01:51,402
oh, my God, what
is happening here?

47
00:01:51,403 --> 00:01:53,987
They burned through
$250 million.

48
00:01:53,988 --> 00:01:55,614
Whoa, whoa. Wait,
wait. Whoa, whoa.

49
00:01:55,615 --> 00:01:58,200
We're the hottest brand out
there going for the last year.

50
00:01:58,201 --> 00:02:00,327
I mean, he gave me
big-pimpin' vibes.

51
00:02:00,328 --> 00:02:02,246
He said, everyone's
going to be rich.

52
00:02:02,247 --> 00:02:05,457
At that point,
everything was possible.

53
00:02:05,458 --> 00:02:07,459
They were on this gravy
train to greatness.

54
00:02:07,460 --> 00:02:09,586
What they did is
definitely illegal.

55
00:02:09,587 --> 00:02:13,007
It is theft, and he
actually got arrested.

56
00:02:13,008 --> 00:02:14,592
Karma's a bitch.

57
00:02:25,478 --> 00:02:29,607
<i>My first moviegoing
experience was "Psycho."</i>

58
00:02:32,193 --> 00:02:35,738
<i>My aunt had an old El Camino,</i>

59
00:02:35,739 --> 00:02:38,657
<i>and she would take us
all to the drive-in.</i>

60
00:02:38,658 --> 00:02:43,245
And we would hide under
a blanket in the back

61
00:02:43,246 --> 00:02:47,958
so she didn't have to also
pay the 25 cents for us kids.

62
00:02:47,959 --> 00:02:50,961
And in that shower scene...

63
00:02:50,962 --> 00:02:52,463
we all jumped

64
00:02:52,464 --> 00:02:56,342
and hit our heads on
the ceiling of the car.

65
00:02:56,343 --> 00:03:00,262
<i>Movie theaters were slowly
but surely dying away,</i>

66
00:03:00,263 --> 00:03:04,058
<i>and I have been in the
business of entertainment</i>

67
00:03:04,059 --> 00:03:05,684
<i>for about 40 years.</i>

68
00:03:05,685 --> 00:03:07,519
You're in total control...

69
00:03:07,520 --> 00:03:09,855
<i>So many people said
that there was no way</i>

70
00:03:09,856 --> 00:03:14,693
<i>that Redbox could work,
that Netflix could work.</i>

71
00:03:14,694 --> 00:03:17,613
<i>Now, Mitch Lowe was part of
the founding team at Netflix.</i>

72
00:03:17,614 --> 00:03:20,491
Now MoviePass CEO...
that's the service

73
00:03:20,492 --> 00:03:23,369
that offers an unlimited
monthly subscription for fans

74
00:03:23,370 --> 00:03:26,663
to catch theater showings on
tens of thousands of screens.

75
00:03:26,664 --> 00:03:30,709
<i>You pay $39.95, and you go to
as many movies as you want.</i>

76
00:03:30,710 --> 00:03:33,796
<i>You used your iPhone or
Android app to pick the movie,</i>

77
00:03:33,797 --> 00:03:35,464
<i>the time, the theater.</i>

78
00:03:35,465 --> 00:03:38,092
<i>We activate a debit
card which we send you</i>

79
00:03:38,093 --> 00:03:41,011
<i>that gives you the money to
just walk up to the box office</i>

80
00:03:41,012 --> 00:03:42,388
<i>and pay for your ticket.</i>

81
00:03:42,389 --> 00:03:44,264
- You used to work at Netflix.
- Yes.

82
00:03:44,265 --> 00:03:45,766
Is that where you kind
of got all these ideas?

83
00:03:45,767 --> 00:03:46,809
Yeah, you know...

84
00:03:46,810 --> 00:03:48,018
The whole idea here

85
00:03:48,019 --> 00:03:49,978
is to build a big
subscription base...

86
00:03:49,979 --> 00:03:52,523
In the same way
Netflix reinvigorated

87
00:03:52,524 --> 00:03:55,025
the home, you know,
rental experience.

88
00:03:55,026 --> 00:03:57,695
<i>If MoviePass could
be successful,</i>

89
00:03:57,696 --> 00:04:00,906
<i>you could get people
back to the movie theater</i>

90
00:04:00,907 --> 00:04:03,784
<i>in that social environment,
on the big screen,</i>

91
00:04:03,785 --> 00:04:05,495
<i>with the big sound.</i>

92
00:04:07,372 --> 00:04:09,373
<i>I was really excited that Mitch</i>

93
00:04:09,374 --> 00:04:11,000
<i>was the one running the company.</i>

94
00:04:11,001 --> 00:04:14,128
If there's anyone that's going
to make this company work,

95
00:04:14,129 --> 00:04:16,714
it's going to be
someone like Mitch.

96
00:04:16,715 --> 00:04:20,301
<i>There was this real
energy around the brand.</i>

97
00:04:23,179 --> 00:04:24,471
<i>I called my friend.</i>

98
00:04:24,472 --> 00:04:27,391
<i>I was like, you're never going
to believe where I got a job.</i>

99
00:04:27,392 --> 00:04:29,476
I was, like, such
a fangirl about it

100
00:04:29,477 --> 00:04:33,397
that it really did feel like
I was getting a job at Netflix

101
00:04:33,398 --> 00:04:35,566
<i>or I was getting a job
at Google or Facebook</i>

102
00:04:35,567 --> 00:04:38,652
<i>or any one of these,
like, big tech companies.</i>

103
00:04:38,653 --> 00:04:40,863
<i>We were at a WeWork,
so they, like,</i>

104
00:04:40,864 --> 00:04:44,366
showed me, like, the snacks
and the tap on the bar.

105
00:04:44,367 --> 00:04:45,909
<i>I was like, wait,
we're getting...</i>

106
00:04:45,910 --> 00:04:47,286
We can drink at work?

107
00:04:47,287 --> 00:04:48,996
So I was just like a
kid in a candy store.

108
00:04:48,997 --> 00:04:50,581
<i>MoviePass, funny enough,</i>

109
00:04:50,582 --> 00:04:52,374
<i>was my first actual
engineering job.</i>

110
00:04:52,375 --> 00:04:54,835
They were the first company
to, like, actually give me,

111
00:04:54,836 --> 00:04:56,337
like, an offer.

112
00:04:56,338 --> 00:04:58,047
So it was the start of
my engineering career,

113
00:04:58,048 --> 00:04:59,465
which is pretty crazy.

114
00:04:59,466 --> 00:05:01,800
<i>That first day, like,
really set the stage for,</i>

115
00:05:01,801 --> 00:05:03,761
I'm working with people
who genuinely care

116
00:05:03,762 --> 00:05:05,929
and love what they do, and
especially Stacy, right?

117
00:05:05,930 --> 00:05:08,140
<i>Oh, man, he loved it.</i>

118
00:05:08,141 --> 00:05:10,059
<i>Everybody loved
going to the movies,</i>

119
00:05:10,060 --> 00:05:12,436
and we made moviegoing
easier, right?

120
00:05:12,437 --> 00:05:14,980
We brought people
back to the movies.

121
00:05:14,981 --> 00:05:16,940
<i>Before MoviePass,</i>

122
00:05:16,941 --> 00:05:20,110
<i>I was the vice president
of marketing at Miramax,</i>

123
00:05:20,111 --> 00:05:23,238
<i>and I had worked on "Scream,"</i>

124
00:05:23,239 --> 00:05:26,283
<i>"Trainspotting," "The Crow."</i>

125
00:05:26,284 --> 00:05:28,410
I remember being walked around

126
00:05:28,411 --> 00:05:30,621
and introduced to the team.

127
00:05:30,622 --> 00:05:32,831
<i>And, you know, we were
spearheaded by Mitch.</i>

128
00:05:32,832 --> 00:05:35,459
<i>And I thought that he was
a pretty compelling person,</i>

129
00:05:35,460 --> 00:05:37,961
<i>you know, a bit of a visionary.</i>

130
00:05:37,962 --> 00:05:40,839
<i>And our vision at the
time... we wanted to build</i>

131
00:05:40,840 --> 00:05:43,550
<i>a large subscriber
base of movie lovers,</i>

132
00:05:43,551 --> 00:05:46,762
but to do any kind of
all-you-can-eat subscription,

133
00:05:46,763 --> 00:05:48,723
you know, you need
a lot of money.

134
00:05:50,725 --> 00:05:54,813
<i>MoviePass was hovering
around 20,000 subscribers.</i>

135
00:05:56,398 --> 00:05:58,649
<i>We're just treading water,</i>

136
00:05:58,650 --> 00:06:01,444
<i>and the money well had dried up.</i>

137
00:06:03,321 --> 00:06:04,989
We needed a lot more money.

138
00:06:06,574 --> 00:06:08,992
<i>I was able to raise
a little bit here,</i>

139
00:06:08,993 --> 00:06:12,663
a little bit there from
high-net-worth believers.

140
00:06:12,664 --> 00:06:14,498
I've got ties with a
number of the folks

141
00:06:14,499 --> 00:06:16,959
who were very early at Netflix.

142
00:06:16,960 --> 00:06:18,669
And Mitch knows his stuff.

143
00:06:18,670 --> 00:06:22,172
<i>The idea that streaming was
going to destroy theaters</i>

144
00:06:22,173 --> 00:06:23,841
<i>was worrisome to me.</i>

145
00:06:23,842 --> 00:06:25,968
I thought that we
should play a role

146
00:06:25,969 --> 00:06:28,220
in trying to change that.

147
00:06:28,221 --> 00:06:30,973
<i>I was at Facebook
from 2005 to 2010</i>

148
00:06:30,974 --> 00:06:32,016
<i>as general counsel</i>

149
00:06:32,017 --> 00:06:34,184
<i>and vice president of
corporate development</i>

150
00:06:34,185 --> 00:06:35,519
<i>and chief privacy officer</i>

151
00:06:35,520 --> 00:06:38,272
<i>and left to run for
attorney general.</i>

152
00:06:38,273 --> 00:06:39,857
<i>I lost the Democratic primary</i>

153
00:06:39,858 --> 00:06:42,609
to this up-and-comer
named Kamala Harris,

154
00:06:42,610 --> 00:06:44,528
who you may have heard of.

155
00:06:44,529 --> 00:06:46,697
<i>I was involved in MoviePass,</i>

156
00:06:46,698 --> 00:06:49,533
<i>but I knew that user
growth was critical.</i>

157
00:06:49,534 --> 00:06:50,701
<i>I talked to Mitch.</i>

158
00:06:50,702 --> 00:06:52,369
He said that he'd had
some conversations

159
00:06:52,370 --> 00:06:53,829
with this guy Ted Farnsworth

160
00:06:53,830 --> 00:06:56,248
<i>and that he had some connections</i>

161
00:06:56,249 --> 00:06:58,417
<i>with folks in New
York finance circles,</i>

162
00:06:58,418 --> 00:07:00,962
<i>which would be,
you know, helpful.</i>

163
00:07:02,714 --> 00:07:05,591
<i>Ted was the CEO of HMNY.</i>

164
00:07:05,592 --> 00:07:08,719
<i>HMNY stands for Helios
and Matheson New York,</i>

165
00:07:08,720 --> 00:07:12,097
a small data-analytics
company focused mainly on IT.

166
00:07:12,098 --> 00:07:14,391
<i>He's extremely likeable,</i>

167
00:07:14,392 --> 00:07:18,062
the typical CEO/entrepreneur.

168
00:07:18,063 --> 00:07:21,440
They love to chat it up.
They love to be friendly.

169
00:07:21,441 --> 00:07:23,567
<i>And they go and take
on these companies,</i>

170
00:07:23,568 --> 00:07:25,486
<i>get people to really
believe in them.</i>

171
00:07:25,487 --> 00:07:27,613
<i>And he had a long
history of doing that</i>

172
00:07:27,614 --> 00:07:31,575
<i>in the beverage industry,
in the supplements industry.</i>

173
00:07:31,576 --> 00:07:34,578
<i>Ted has a great
background in finance</i>

174
00:07:34,579 --> 00:07:37,664
<i>and raising money,
PR and marketing.</i>

175
00:07:37,665 --> 00:07:39,250
It was kind of natural.

176
00:07:40,669 --> 00:07:43,504
<i>I knew that if Ted fell
in love with MoviePass,</i>

177
00:07:43,505 --> 00:07:45,506
<i>he would invest.</i>

178
00:07:45,507 --> 00:07:47,758
<i>So I went to meet him
and got to know him,</i>

179
00:07:47,759 --> 00:07:51,011
<i>thought he was a
super-smart guy.</i>

180
00:07:51,012 --> 00:07:53,472
<i>He said, I absolutely
love what you're doing.</i>

181
00:07:53,473 --> 00:07:56,433
<i>And he saw MoviePass</i>

182
00:07:56,434 --> 00:07:58,268
<i>as something that could fit</i>

183
00:07:58,269 --> 00:08:00,063
<i>under that umbrella.</i>

184
00:08:03,066 --> 00:08:06,652
He's incredibly
charming and very much,

185
00:08:06,653 --> 00:08:09,154
you know, sort of knows how
to talk about the future

186
00:08:09,155 --> 00:08:12,617
<i>and, ultimately, showed
passion for the business.</i>

187
00:08:15,245 --> 00:08:18,455
<i>He was a little worried
about the business,</i>

188
00:08:18,456 --> 00:08:20,917
<i>especially the total user base.</i>

189
00:08:22,752 --> 00:08:25,671
<i>MoviePass had never
gotten beyond 20,000.</i>

190
00:08:25,672 --> 00:08:29,341
<i>And he said you needed
millions of subscribers.</i>

191
00:08:29,342 --> 00:08:32,428
20,000 was not going to cut it.

192
00:08:32,429 --> 00:08:34,221
<i>The deal that was
put on the table</i>

193
00:08:34,222 --> 00:08:36,098
<i>was tens of millions of dollars,</i>

194
00:08:36,099 --> 00:08:38,600
which is more money than we'd
ever seen at one time, right?

195
00:08:38,601 --> 00:08:40,102
Which was very exciting

196
00:08:40,103 --> 00:08:43,522
but with such a big
asterisk next to it.

197
00:08:43,523 --> 00:08:46,483
<i>In order to get $25
million in cash,</i>

198
00:08:46,484 --> 00:08:50,320
<i>we had to reach 100,000 new subs</i>

199
00:08:50,321 --> 00:08:52,156
within 6 months.

200
00:08:52,157 --> 00:08:55,034
<i>But it took 5 years</i>

201
00:08:55,035 --> 00:08:57,995
<i>to get the 20,000
members that we had.</i>

202
00:08:57,996 --> 00:09:01,666
So we didn't know if
there's a way to do it.

203
00:09:03,001 --> 00:09:06,712
<i>We explained the various
pricing models we had tested.</i>

204
00:09:06,713 --> 00:09:09,131
<i>And he asked us, what's the
one you think is the best?</i>

205
00:09:09,132 --> 00:09:12,676
<i>And we said, $14.95,
2 movies a month.</i>

206
00:09:12,677 --> 00:09:15,471
But we're worried about
how much it's going to cost

207
00:09:15,472 --> 00:09:18,849
to market and, you know,
get people to try it.

208
00:09:18,850 --> 00:09:21,852
He said, no, what
you need to do is,

209
00:09:21,853 --> 00:09:24,146
you need to make
it so attractive

210
00:09:24,147 --> 00:09:26,732
that you don't need to
spend money on advertising.

211
00:09:26,733 --> 00:09:31,696
And I thought, okay,
let's give this a shot.

212
00:09:33,031 --> 00:09:35,657
<i>MoviePass dropped
their prices...</i>

213
00:09:35,658 --> 00:09:37,786
<i>to $10 a month.</i>

214
00:09:43,249 --> 00:09:45,542
<i>MoviePass is now promising</i>

215
00:09:45,543 --> 00:09:47,419
<i>a month's worth of movie tickets</i>

216
00:09:47,420 --> 00:09:48,712
<i>for about the cost</i>

217
00:09:48,713 --> 00:09:50,089
<i>of a single admission.</i>

218
00:09:50,090 --> 00:09:52,133
<i>- Ten bucks a month.
- It's a heck of a deal.</i>

219
00:09:54,386 --> 00:09:56,303
<i>I showed up to work.</i>

220
00:09:56,304 --> 00:09:59,098
All I can just remember
is just all of our queues

221
00:09:59,099 --> 00:10:00,140
being in the red.

222
00:10:00,141 --> 00:10:02,851
Everyone wants to sign
up. Everyone wants a card.

223
00:10:02,852 --> 00:10:04,812
When can I start using it?

224
00:10:04,813 --> 00:10:06,523
And so, like, we got bombarded.

225
00:10:11,403 --> 00:10:13,404
<i>You could look down for an hour</i>

226
00:10:13,405 --> 00:10:16,407
<i>and see the customer number
increase by 20,000 people.</i>

227
00:10:16,408 --> 00:10:17,992
I mean, it was remarkable.

228
00:10:20,286 --> 00:10:22,496
You have incredible demand.

229
00:10:22,497 --> 00:10:23,873
People love this.

230
00:10:25,000 --> 00:10:27,001
<i>Their website was
crashing all day</i>

231
00:10:27,002 --> 00:10:30,838
<i>from sheer volume of people
trying to go and visit it.</i>

232
00:10:30,839 --> 00:10:33,007
<i>You went from $40 a month</i>

233
00:10:33,008 --> 00:10:34,508
to $9.95.

234
00:10:34,509 --> 00:10:35,427
What happened?

235
00:10:35,428 --> 00:10:38,138
This is the whole
idea... to get attention.

236
00:10:43,768 --> 00:10:46,103
<i>We thought it was going to take</i>

237
00:10:46,104 --> 00:10:50,065
<i>about a year to reach
100,000 new subscribers.</i>

238
00:10:50,066 --> 00:10:53,152
But all of a sudden,
we got 100,000 people

239
00:10:53,153 --> 00:10:55,112
<i>in 48 hours</i>

240
00:10:55,113 --> 00:10:58,575
<i>and then another 75,000,
like, the next day.</i>

241
00:11:00,201 --> 00:11:02,202
I remember Stacy
calling me and saying,

242
00:11:02,203 --> 00:11:05,330
shit, how are we going to
send out that many cards?

243
00:11:05,331 --> 00:11:07,249
We only have 50,000 cards.

244
00:11:07,250 --> 00:11:10,336
<i>And those cards
weren't easy to make.</i>

245
00:11:10,337 --> 00:11:14,965
<i>You know, they are real
Mastercard debit cards.</i>

246
00:11:14,966 --> 00:11:18,802
<i>I was like, okay, turn
this promotion off</i>

247
00:11:18,803 --> 00:11:21,847
<i>so that we could
order more cards.</i>

248
00:11:21,848 --> 00:11:24,141
We need to pump the
brakes a little bit

249
00:11:24,142 --> 00:11:27,519
to make sure we didn't have
a run on too many people

250
00:11:27,520 --> 00:11:29,897
that we couldn't manage it.

251
00:11:29,898 --> 00:11:34,401
<i>I asked Stacy, how in the
world do we get cards?</i>

252
00:11:34,402 --> 00:11:36,820
<i>We have to hire a Brinks truck</i>

253
00:11:36,821 --> 00:11:39,907
<i>to bring a big truckload of them</i>

254
00:11:39,908 --> 00:11:41,867
<i>to a new facility in LA.</i>

255
00:11:41,868 --> 00:11:44,912
<i>That's the only way we're
going to be able to catch up.</i>

256
00:11:44,913 --> 00:11:46,330
It was not sustainable.

257
00:11:46,331 --> 00:11:50,668
<i>I said to Mitch, we
can't do this every week.</i>

258
00:11:50,669 --> 00:11:53,128
And he said, no, this is great.

259
00:11:53,129 --> 00:11:55,590
Keep it going. Let's
try and figure it out.

260
00:12:01,346 --> 00:12:04,556
<i>All I did was check my
mail every single day</i>

261
00:12:04,557 --> 00:12:06,016
<i>for my MoviePass.</i>

262
00:12:06,017 --> 00:12:08,769
The second I got my MoviePass,
I didn't think twice.

263
00:12:08,770 --> 00:12:12,189
I went from my mailbox
right to the movie theater.

264
00:12:12,190 --> 00:12:13,732
<i>Today is awesome.</i>

265
00:12:13,733 --> 00:12:15,901
Why?, you ask.

266
00:12:15,902 --> 00:12:18,404
My MoviePass card showed up.

267
00:12:18,405 --> 00:12:21,865
One movie a day every
single day with the pass.

268
00:12:21,866 --> 00:12:23,617
<i>I'm telling you,
this is the truth.</i>

269
00:12:23,618 --> 00:12:25,369
That's insane!

270
00:12:25,370 --> 00:12:26,704
<i>The hottest startup</i>

271
00:12:26,705 --> 00:12:28,205
<i>to disrupt Hollywood
since Netflix</i>

272
00:12:28,206 --> 00:12:30,541
<i>is getting rave reviews
from moviegoers.</i>

273
00:12:30,542 --> 00:12:31,709
<i>I'd watch a lot of movies.</i>

274
00:12:31,710 --> 00:12:33,168
I'd watch a movie twice now.

275
00:12:33,169 --> 00:12:34,586
I think I'm going
to invest in that.

276
00:12:34,587 --> 00:12:38,258
<i>Going to the movie theater,
there's nothing like it.</i>

277
00:12:40,969 --> 00:12:43,053
<i>It was a Saturday afternoon,</i>

278
00:12:43,054 --> 00:12:45,556
<i>and I went to the movie theater.</i>

279
00:12:45,557 --> 00:12:49,351
And I see the person to my
left get out a MoviePass card.

280
00:12:49,352 --> 00:12:52,730
And I see two people here
get out a MoviePass card.

281
00:12:52,731 --> 00:12:54,773
And I see people over there,

282
00:12:54,774 --> 00:12:57,152
and they all have
MoviePass cards.

283
00:13:00,488 --> 00:13:02,614
<i>It was exciting to see
people with the cards,</i>

284
00:13:02,615 --> 00:13:03,782
<i>like, in the wild.</i>

285
00:13:03,783 --> 00:13:05,701
It felt like I had,
like, a secret.

286
00:13:05,702 --> 00:13:09,788
It was like, they don't
know I work at MoviePass.

287
00:13:09,789 --> 00:13:11,540
<i>There was more than one occasion</i>

288
00:13:11,541 --> 00:13:13,709
<i>where someone's MoviePass card
wasn't working at the theater,</i>

289
00:13:13,710 --> 00:13:16,045
and I was like, can
I please help you?

290
00:13:16,046 --> 00:13:17,838
Like, I actually work there.

291
00:13:17,839 --> 00:13:20,425
I troubleshooted
whatever the issue was.

292
00:13:21,926 --> 00:13:25,095
<i>When we saw the growth,
I mean, I was blown away,</i>

293
00:13:25,096 --> 00:13:27,431
and I was excited
to see the promise

294
00:13:27,432 --> 00:13:29,601
of the model validated.

295
00:13:31,019 --> 00:13:34,689
<i>Ted's team began marketing
it extraordinarily well.</i>

296
00:13:38,943 --> 00:13:40,694
I always tell Mitch,
it's like we're doing

297
00:13:40,695 --> 00:13:42,112
social re-engineering.

298
00:13:42,113 --> 00:13:44,740
<i>We're taking people
back to the theater.</i>

299
00:13:44,741 --> 00:13:46,283
<i>I'm seeing viral growth.</i>

300
00:13:46,284 --> 00:13:48,661
I'm seeing no need
for paid marketing.

301
00:13:52,499 --> 00:13:54,334
The word of mouth is so strong.

302
00:13:59,923 --> 00:14:02,383
<i>Making MoviePass a household
name was absolutely</i>

303
00:14:02,384 --> 00:14:04,927
<i>one of those things that
we were starting to see</i>

304
00:14:04,928 --> 00:14:06,887
<i>actually happen.</i>

305
00:14:06,888 --> 00:14:08,263
<i>We're, at that time,</i>

306
00:14:08,264 --> 00:14:11,308
<i>the fastest-growing
subscription company</i>

307
00:14:11,309 --> 00:14:13,769
since Spotify.

308
00:14:13,770 --> 00:14:15,854
<i>There was a
retirement community,</i>

309
00:14:15,855 --> 00:14:18,148
<i>The Villages down in Florida,</i>

310
00:14:18,149 --> 00:14:22,361
that actually has a
network of movie theaters.

311
00:14:22,362 --> 00:14:26,031
<i>And I swear, every single
retired person in The Villages</i>

312
00:14:26,032 --> 00:14:27,951
<i>had a MoviePass card.</i>

313
00:14:29,160 --> 00:14:32,830
A guy blamed his, like,
divorce with his wife

314
00:14:32,831 --> 00:14:36,709
on the fact that he loved
using MoviePass so much.

315
00:14:36,710 --> 00:14:41,296
So there were definitely some,
like, wacky, weird complaints.

316
00:14:41,297 --> 00:14:43,882
<i>And just like that, you
went from 20,000 subscribers</i>

317
00:14:43,883 --> 00:14:45,509
<i>to 600,000.</i>

318
00:14:45,510 --> 00:14:47,511
<i>Has it gone up more than that?
That was the end of October.</i>

319
00:14:47,512 --> 00:14:50,180
<i>Oh, yeah, it goes up
every day, you know.</i>

320
00:14:50,181 --> 00:14:52,349
<i>Because of Ted's good idea,</i>

321
00:14:52,350 --> 00:14:56,687
<i>we were getting 100 million
in PR and marketing value</i>

322
00:14:56,688 --> 00:14:59,398
<i>and probably more each month.</i>

323
00:14:59,399 --> 00:15:01,400
That made me want
to continue working.

324
00:15:01,401 --> 00:15:05,195
That made me want to focus on
my work and do well, you know.

325
00:15:05,196 --> 00:15:07,364
But while the phenomenon
is going on out there,

326
00:15:07,365 --> 00:15:10,701
you're just kind of,
like, blind to it

327
00:15:10,702 --> 00:15:13,829
until we reached
the million mark.

328
00:15:13,830 --> 00:15:17,041
And I knew that was
happening because I had

329
00:15:17,042 --> 00:15:19,001
friends and family
who were like,

330
00:15:19,002 --> 00:15:20,711
did you hear about MoviePass?

331
00:15:20,712 --> 00:15:22,296
I'm like, I work
there. You know?

332
00:15:22,297 --> 00:15:24,423
They're like, you do?
I'm like, yeah, I do.

333
00:15:24,424 --> 00:15:27,551
I had a cousin. She's
like, I love your product.

334
00:15:27,552 --> 00:15:29,928
Oh, my God, me and my
boyfriend go all the time.

335
00:15:29,929 --> 00:15:33,557
Like, damn, we're a
lot bigger than I knew.

336
00:15:33,558 --> 00:15:34,808
We were signing up

337
00:15:34,809 --> 00:15:38,228
a quarter of a million
new subs every month.

338
00:15:38,229 --> 00:15:42,649
<i>It has hit 1.5
million subscribers.</i>

339
00:15:42,650 --> 00:15:46,195
<i>Mitch and Ted had a goal
based on this trajectory</i>

340
00:15:46,196 --> 00:15:49,239
<i>that they wanted to get
to 5 million customers.</i>

341
00:15:49,240 --> 00:15:50,866
<i>I was like, why are
you running so fast?</i>

342
00:15:50,867 --> 00:15:52,326
You're out in front of...

343
00:15:52,327 --> 00:15:55,579
Just put it on pause
and catch our breath.

344
00:15:55,580 --> 00:15:59,291
<i>They would push back and say,
we know what we're doing.</i>

345
00:15:59,292 --> 00:16:01,293
We got this.

346
00:16:01,294 --> 00:16:03,504
<i>Our plan was never
to have a price point</i>

347
00:16:03,505 --> 00:16:05,172
that's promotional forever.

348
00:16:05,173 --> 00:16:06,924
I think that's where
the business got

349
00:16:06,925 --> 00:16:08,385
into a tricky place.

350
00:16:09,969 --> 00:16:12,554
<i>In my conversations
with Mitch and Ted,</i>

351
00:16:12,555 --> 00:16:14,431
<i>I told them, I said,</i>

352
00:16:14,432 --> 00:16:16,600
<i>we're kind of learning
how to build the plane</i>

353
00:16:16,601 --> 00:16:18,185
<i>in mid-flight</i>

354
00:16:18,186 --> 00:16:21,689
<i>and changing it
from a crop duster</i>

355
00:16:21,690 --> 00:16:25,442
<i>to a 747 that can handle
large volumes of people.</i>

356
00:16:25,443 --> 00:16:29,613
We were not prepared to
keep running at that pace.

357
00:16:29,614 --> 00:16:31,115
<i>I would hear</i>

358
00:16:31,116 --> 00:16:33,534
<i>that Stacy would have
those conversations,</i>

359
00:16:33,535 --> 00:16:36,370
you know, at the bar
after work or offsite,

360
00:16:36,371 --> 00:16:41,000
<i>telling a few of the employees
that this would never work.</i>

361
00:16:41,001 --> 00:16:43,252
He did kind of pull
up, like, a pitch deck

362
00:16:43,253 --> 00:16:45,921
<i>of kind of what he saw
the growth trajectory</i>

363
00:16:45,922 --> 00:16:47,381
<i>of MoviePass looking like.</i>

364
00:16:47,382 --> 00:16:50,509
He just wasn't being
a constructive member

365
00:16:50,510 --> 00:16:51,885
of the team.

366
00:16:51,886 --> 00:16:53,804
I immediately kind of perceived

367
00:16:53,805 --> 00:16:56,974
that Stacy was this
impressive person

368
00:16:56,975 --> 00:16:59,685
that I had no clue
how he kind of fit

369
00:16:59,686 --> 00:17:01,395
into the landscape of MoviePass.

370
00:17:01,396 --> 00:17:03,188
A lot of times when they
talk about MoviePass,

371
00:17:03,189 --> 00:17:06,317
you usually get a
picture of Mitch and Ted.

372
00:17:07,944 --> 00:17:10,779
<i>And that was, like, the thing
that was, like, the spread</i>

373
00:17:10,780 --> 00:17:13,365
<i>to the media, right?</i>

374
00:17:13,366 --> 00:17:18,871
MoviePass founders,
Mitch and Ted.

375
00:17:18,872 --> 00:17:21,081
But that's definitely
not the case.

376
00:17:21,082 --> 00:17:24,209
<i>That's Stacy and Hamet.</i>

377
00:17:24,210 --> 00:17:27,087
<i>Stacy and Hamet had
built this company</i>

378
00:17:27,088 --> 00:17:29,173
from the ground up since 2011.

379
00:17:29,174 --> 00:17:32,134
And when it finally...

380
00:17:32,135 --> 00:17:36,180
found its groove
with pop culture,

381
00:17:36,181 --> 00:17:38,849
it had already been
taken over by two men,

382
00:17:38,850 --> 00:17:42,227
<i>Mitch Lowe and Ted Farnsworth.</i>

383
00:17:42,228 --> 00:17:43,854
<i>Which is funny, right?</i>

384
00:17:43,855 --> 00:17:45,939
<i>You start thinking
about it, right?</i>

385
00:17:45,940 --> 00:17:47,524
Like, two Black guys
come up with an app.

386
00:17:47,525 --> 00:17:50,403
They don't get any credit,
but the two white guys do.

387
00:17:52,822 --> 00:17:54,948
<i>It was hard.</i>

388
00:17:54,949 --> 00:17:59,537
All of this was part
of a bigger story.

389
00:18:08,463 --> 00:18:11,882
<i>I grew up in Houston, Texas...</i>

390
00:18:11,883 --> 00:18:13,550
<i>born and raised.</i>

391
00:18:13,551 --> 00:18:16,387
<i>And, you know, I think
that it was really simple.</i>

392
00:18:16,388 --> 00:18:20,058
Treat others how you'd want
to be treated and love God.

393
00:18:25,480 --> 00:18:28,900
<i>One day, I went to
see "Blade Runner."</i>

394
00:18:32,946 --> 00:18:35,739
<i>I'd never seen
anything like that.</i>

395
00:18:35,740 --> 00:18:37,408
<i>And all I knew is,</i>

396
00:18:37,409 --> 00:18:40,328
whatever that is,
I want to do that.

397
00:18:42,080 --> 00:18:44,206
<i>I graduated in 1985.</i>

398
00:18:44,207 --> 00:18:46,750
<i>I went out to LA.</i>

399
00:18:46,751 --> 00:18:50,004
<i>And I would go on auditions.</i>

400
00:18:50,005 --> 00:18:53,590
This one particular
one, the line was...

401
00:18:53,591 --> 00:18:55,259
it's HBO. Can I curse?

402
00:18:55,260 --> 00:18:57,052
Yeah, you can say
whatever you want, really.

403
00:18:57,053 --> 00:18:58,387
The line was,

404
00:18:58,388 --> 00:19:00,097
"Give me your
motherfucking money!"

405
00:19:00,098 --> 00:19:01,682
I kept screwing up the line.

406
00:19:01,683 --> 00:19:04,268
Yo, give me the
motherfucking car keys!

407
00:19:04,269 --> 00:19:05,936
Give me your motherfucking car!

408
00:19:05,937 --> 00:19:07,187
Give me your motherfucking money

409
00:19:07,188 --> 00:19:08,772
and the keys!

410
00:19:08,773 --> 00:19:10,607
And this white guy

411
00:19:10,608 --> 00:19:12,609
comes out from behind
the tape and says, no.

412
00:19:12,610 --> 00:19:15,529
See, you have to hold
your hand like this.

413
00:19:15,530 --> 00:19:17,698
And he's explaining to
me how to be a thug.

414
00:19:17,699 --> 00:19:19,158
And it was just...

415
00:19:19,159 --> 00:19:20,617
I just left.

416
00:19:20,618 --> 00:19:23,287
I was like, this
isn't going to work.

417
00:19:23,288 --> 00:19:26,415
<i>Music was always a part of me.</i>

418
00:19:26,416 --> 00:19:29,544
<i>I was actually in
a Rush cover band.</i>

419
00:19:32,172 --> 00:19:34,757
<i>One of my favorite
Rush songs to cover</i>

420
00:19:34,758 --> 00:19:37,468
<i>was "Spirit of the Radio."</i>

421
00:19:37,469 --> 00:19:40,804
both: ♪ Begin the day
with a friendly voice ♪

422
00:19:40,805 --> 00:19:44,558
♪ A companion unobtrusive ♪

423
00:19:44,559 --> 00:19:46,268
Anyway, so...

424
00:19:46,269 --> 00:19:48,187
<i>I got a call from
one of my friends.</i>

425
00:19:48,188 --> 00:19:49,855
<i>Motown was hiring.</i>

426
00:19:49,856 --> 00:19:52,149
- ♪ So we come ♪
- ♪ Oh, oh ♪

427
00:19:52,150 --> 00:19:56,195
♪ To the end of the road ♪

428
00:19:56,196 --> 00:19:57,488
<i>I worked my way up</i>

429
00:19:57,489 --> 00:19:59,323
<i>to product manager
for Boyz II Men.</i>

430
00:19:59,324 --> 00:20:02,326
<i>Their biggest hit single
was "End of the Road."</i>

431
00:20:02,327 --> 00:20:06,163
<i>Every high-school dance,
you put on Boyz II Men.</i>

432
00:20:06,164 --> 00:20:08,958
<i>They were like the
frickin' Beatles.</i>

433
00:20:11,336 --> 00:20:14,755
<i>When I was 25, they
hired me at Miramax,</i>

434
00:20:14,756 --> 00:20:17,883
<i>and I became the vice
president of marketing.</i>

435
00:20:17,884 --> 00:20:22,513
<i>I had grossed more than
$3 billion for studios.</i>

436
00:20:22,514 --> 00:20:25,182
<i>I was "Hollywood
Reporter" 30 under 30.</i>

437
00:20:25,183 --> 00:20:27,936
It's like I didn't just
fall off the truck.

438
00:20:29,562 --> 00:20:32,773
<i>25 years ago, I
went to Sundance.</i>

439
00:20:32,774 --> 00:20:34,858
<i>I talked to the
head of the festival</i>

440
00:20:34,859 --> 00:20:38,612
<i>about helping them show more
films by people of color.</i>

441
00:20:38,613 --> 00:20:41,490
<i>They said if there were more
films that were good enough,</i>

442
00:20:41,491 --> 00:20:43,742
<i>they would show them.</i>

443
00:20:43,743 --> 00:20:45,994
That just wasn't a
good-enough answer.

444
00:20:45,995 --> 00:20:49,708
<i>So I ended up creating the
Urbanworld Film Festival.</i>

445
00:20:50,917 --> 00:20:55,004
<i>Our first festival was 1997.</i>

446
00:20:55,005 --> 00:20:56,630
<i>Today Urbanworld</i>

447
00:20:56,631 --> 00:21:00,134
<i>is one of the largest
festivals in the world.</i>

448
00:21:00,135 --> 00:21:02,219
<i>We premiered more
number-one films</i>

449
00:21:02,220 --> 00:21:04,555
<i>than any North
American festival.</i>

450
00:21:04,556 --> 00:21:06,390
<i>Such a big part of
my cinematic life.</i>

451
00:21:06,391 --> 00:21:11,103
It's the festival that
fostered what I'm doing now.

452
00:21:11,104 --> 00:21:13,063
<i>Stacy gave Black filmmakers,</i>

453
00:21:13,064 --> 00:21:15,482
filmmakers that appealed
to urban markets,

454
00:21:15,483 --> 00:21:18,402
Latino markets, a place to
actually exhibit their films,

455
00:21:18,403 --> 00:21:20,571
and that's something that
hadn't been done before.

456
00:21:20,572 --> 00:21:22,781
<i>With Urbanworld Film Festival,</i>

457
00:21:22,782 --> 00:21:24,158
he found a great niche.

458
00:21:24,159 --> 00:21:25,576
He understood,

459
00:21:25,577 --> 00:21:28,954
find that customer, because
all you need is one niche.

460
00:21:28,955 --> 00:21:30,581
And those people,

461
00:21:30,582 --> 00:21:32,916
because they've been
neglected for so long,

462
00:21:32,917 --> 00:21:37,463
when they finally feel like
somebody just respects them,

463
00:21:37,464 --> 00:21:39,757
man, they're going to
be a customer forever.

464
00:21:39,758 --> 00:21:42,384
<i>There were a lot of
subscription models</i>

465
00:21:42,385 --> 00:21:44,219
<i>starting to be on the horizon,</i>

466
00:21:44,220 --> 00:21:46,597
<i>from Netflix to Pandora.</i>

467
00:21:46,598 --> 00:21:49,141
<i>And I thought, can we
make a subscription</i>

468
00:21:49,142 --> 00:21:50,434
<i>out of Urbanworld?</i>

469
00:21:50,435 --> 00:21:53,855
That was the origin
of MoviePass.

470
00:21:55,482 --> 00:21:58,776
<i>I went around for five years,</i>

471
00:21:58,777 --> 00:22:01,737
and I couldn't get
anybody to invest.

472
00:22:01,738 --> 00:22:05,240
<i>A friend of mine who's
a movie producer says,</i>

473
00:22:05,241 --> 00:22:07,326
<i>have you talked to Hamet Watt?</i>

474
00:22:07,327 --> 00:22:10,454
I think you and that
brother should talk.

475
00:22:10,455 --> 00:22:13,791
I was starting companies
and/or investing in companies.

476
00:22:13,792 --> 00:22:16,710
And that's all I've ever
done my whole career.

477
00:22:16,711 --> 00:22:19,004
<i>I got very excited
about the opportunity</i>

478
00:22:19,005 --> 00:22:20,673
<i>in the theatrical window</i>

479
00:22:20,674 --> 00:22:23,133
because I saw that
this was the part

480
00:22:23,134 --> 00:22:26,595
of the entertainment ecosystem
that innovated the least.

481
00:22:26,596 --> 00:22:28,305
<i>Stacy and I immediately</i>

482
00:22:28,306 --> 00:22:30,349
<i>were finishing each
other's sentences,</i>

483
00:22:30,350 --> 00:22:32,017
and we locked ourselves in
the room with whiteboards

484
00:22:32,018 --> 00:22:34,687
and started talking about
the world of subscription.

485
00:22:34,688 --> 00:22:36,438
We should do this.
We should do that.

486
00:22:36,439 --> 00:22:37,940
<i>We should do this.</i>

487
00:22:37,941 --> 00:22:40,401
<i>The next thing you know, we
were putting together a model</i>

488
00:22:40,402 --> 00:22:43,362
and a plan to build what
we were hoping would become

489
00:22:43,363 --> 00:22:46,156
the largest moviegoing
subscription business

490
00:22:46,157 --> 00:22:47,409
<i>ever conceived.</i>

491
00:22:52,580 --> 00:22:56,083
Hamet said, I can raise
money for this in a month.

492
00:22:56,084 --> 00:22:58,502
I was like, yeah, right.

493
00:22:58,503 --> 00:23:00,796
And he said, if I can,
do we have a deal?

494
00:23:00,797 --> 00:23:02,047
Can we be partners?

495
00:23:02,048 --> 00:23:03,465
And I said, sure.

496
00:23:03,466 --> 00:23:07,721
So we raised $4 million
pretty early out of the gates.

497
00:23:10,015 --> 00:23:13,809
I remember the first hire
that we made at MoviePass.

498
00:23:13,810 --> 00:23:15,686
I remember sending the
note, welcome to MoviePass.

499
00:23:15,687 --> 00:23:18,397
And that was the first of
many hires that we made.

500
00:23:18,398 --> 00:23:22,484
<i>It was a really
family-oriented atmosphere.</i>

501
00:23:22,485 --> 00:23:24,069
<i>We had a lot of fun.</i>

502
00:23:24,070 --> 00:23:27,364
<i>And we knew that this
was a special company.</i>

503
00:23:27,365 --> 00:23:30,200
<i>Very first version of MoviePass,</i>

504
00:23:30,201 --> 00:23:33,495
<i>we built through
movietickets.com.</i>

505
00:23:33,496 --> 00:23:35,789
<i>They were part owned by AMC.</i>

506
00:23:35,790 --> 00:23:38,959
<i>That allowed us to
access the tickets.</i>

507
00:23:38,960 --> 00:23:41,003
<i>Everybody loved it.</i>

508
00:23:41,004 --> 00:23:43,630
<i>And we did the Fourth
of July launch.</i>

509
00:23:43,631 --> 00:23:45,799
Here we go! Here we go!

510
00:23:45,800 --> 00:23:48,385
<i>"Transformers," the
Michael Bay film.</i>

511
00:23:48,386 --> 00:23:51,722
You're coming home, old friend.

512
00:23:51,723 --> 00:23:54,266
We had all the press there.

513
00:23:54,267 --> 00:23:56,560
We showed them how
the product worked.

514
00:23:56,561 --> 00:23:58,062
<i>We started the screening,</i>

515
00:23:58,063 --> 00:24:01,398
<i>and the press agent
brought us out and says,</i>

516
00:24:01,399 --> 00:24:03,776
hey, guys,
something's happening.

517
00:24:03,777 --> 00:24:08,698
AMC is really upset about
this MoviePass thing.

518
00:24:09,908 --> 00:24:12,993
<i>AMC released a statement saying,</i>

519
00:24:12,994 --> 00:24:15,996
<i>whatever this was, they
were not in support of it.</i>

520
00:24:15,997 --> 00:24:17,414
<i>Oh, my gosh.</i>

521
00:24:17,415 --> 00:24:20,751
The biggest player in the
industry is not happy.

522
00:24:20,752 --> 00:24:24,004
<i>We got a cease and
desist from AMC.</i>

523
00:24:24,005 --> 00:24:25,506
The music stopped.

524
00:24:25,507 --> 00:24:28,676
So we were literally
born on a Thursday,

525
00:24:28,677 --> 00:24:32,513
and we died on a Friday
before we ever even launched.

526
00:24:32,514 --> 00:24:34,056
<i>After you get shut down,</i>

527
00:24:34,057 --> 00:24:37,142
<i>you start to realize that
you need to be independent</i>

528
00:24:37,143 --> 00:24:39,770
<i>or as independent as possible.</i>

529
00:24:39,771 --> 00:24:41,605
The problem we needed
to solve at that time

530
00:24:41,606 --> 00:24:44,358
was just being able
to access tickets.

531
00:24:44,359 --> 00:24:46,568
Since the theaters
weren't allowing us

532
00:24:46,569 --> 00:24:47,986
to go through their system,

533
00:24:47,987 --> 00:24:50,614
<i>we had no way into
doing business with them</i>

534
00:24:50,615 --> 00:24:52,533
<i>unless we built our own system.</i>

535
00:24:52,534 --> 00:24:55,744
That's when...

536
00:24:55,745 --> 00:24:59,748
the red card came to be born.

537
00:24:59,749 --> 00:25:01,458
<i>You would go to a theater</i>

538
00:25:01,459 --> 00:25:03,127
<i>where you wanted to see a movie.</i>

539
00:25:03,128 --> 00:25:05,754
<i>You would look in the
app, pick a showtime.</i>

540
00:25:05,755 --> 00:25:08,007
<i>Your app would verify</i>

541
00:25:08,008 --> 00:25:10,134
<i>that you were actually
at the theater</i>

542
00:25:10,135 --> 00:25:11,719
<i>that you wanted a ticket at.</i>

543
00:25:11,720 --> 00:25:16,598
<i>And then it will load
funds to purchase a ticket.</i>

544
00:25:16,599 --> 00:25:18,017
At that time, no one
had figured out...

545
00:25:18,018 --> 00:25:20,102
And that's why we got
a patent granted on it.

546
00:25:20,103 --> 00:25:22,146
<i>No one had figured
out a way to do that,</i>

547
00:25:22,147 --> 00:25:24,148
<i>to use location services</i>

548
00:25:24,149 --> 00:25:25,983
<i>to authenticate</i>

549
00:25:25,984 --> 00:25:29,988
a presence in an environment
that would unlock access.

550
00:25:33,992 --> 00:25:37,828
<i>Stacy and Hamet had
solved the problem of,</i>

551
00:25:37,829 --> 00:25:40,622
how do we get access
to enough inventory?

552
00:25:40,623 --> 00:25:42,791
<i>That was the secret
sauce for me.</i>

553
00:25:42,792 --> 00:25:44,543
<i>I think Stacy had sent me one.</i>

554
00:25:44,544 --> 00:25:47,463
And I tested it to make
sure that it worked.

555
00:25:47,464 --> 00:25:48,797
And it did.

556
00:25:48,798 --> 00:25:50,591
Like, I was able
to go to a theater

557
00:25:50,592 --> 00:25:53,552
and, you know, check in on
the app, drive the card.

558
00:25:53,553 --> 00:25:56,472
And, you know, that was
really why I'm like,

559
00:25:56,473 --> 00:25:58,140
oh, this can't go away.

560
00:25:58,141 --> 00:25:59,683
This is a great idea.

561
00:25:59,684 --> 00:26:02,311
<i>We were running out of capital.</i>

562
00:26:02,312 --> 00:26:05,647
<i>Chris said, I really like what
you guys are trying to build.</i>

563
00:26:05,648 --> 00:26:07,524
And I'm going to give you
guys a million dollars

564
00:26:07,525 --> 00:26:09,693
to keep running the company.

565
00:26:09,694 --> 00:26:13,572
He, that day, wired
half a million dollars

566
00:26:13,573 --> 00:26:15,699
into our accounts.

567
00:26:15,700 --> 00:26:17,868
And I remember saying to him,

568
00:26:17,869 --> 00:26:20,871
I said, Chris, if you
come into this deal,

569
00:26:20,872 --> 00:26:23,540
we're going to do a
fair deal with you

570
00:26:23,541 --> 00:26:26,543
in terms of the economics
that you'll get.

571
00:26:26,544 --> 00:26:29,421
But you'll also be our partner.

572
00:26:29,422 --> 00:26:31,173
<i>The terms he gave us</i>

573
00:26:31,174 --> 00:26:35,511
<i>were actually more favorable
than what we had discussed.</i>

574
00:26:35,512 --> 00:26:38,764
And then Chris put
another investment in.

575
00:26:38,765 --> 00:26:41,809
That is really what
gave us the foundation

576
00:26:41,810 --> 00:26:43,769
to start to do a
lot of the stuff

577
00:26:43,770 --> 00:26:45,187
<i>that we ultimately did.</i>

578
00:26:45,188 --> 00:26:47,856
Stacy, first of all, how
exactly is this going to work?

579
00:26:47,857 --> 00:26:49,316
Pretty much wherever you are,

580
00:26:49,317 --> 00:26:52,569
you're going to be able to
go to movies using MoviePass.

581
00:26:52,570 --> 00:26:55,240
<i>We had a product now
that no one could stop.</i>

582
00:26:57,117 --> 00:27:01,036
<i>I remember trying to make
an appeal to Gerry Lopez,</i>

583
00:27:01,037 --> 00:27:03,080
<i>the CEO of AMC.</i>

584
00:27:03,081 --> 00:27:05,249
<i>We needed to make
money, obviously,</i>

585
00:27:05,250 --> 00:27:06,500
<i>as a subscription service.</i>

586
00:27:06,501 --> 00:27:08,836
And part of that
was going to come

587
00:27:08,837 --> 00:27:11,922
<i>from a partnership
with theaters.</i>

588
00:27:11,923 --> 00:27:14,091
<i>The holy grail is you got to get</i>

589
00:27:14,092 --> 00:27:15,759
<i>what we called "butts
in seats," right?</i>

590
00:27:15,760 --> 00:27:18,095
<i>You got to get people
to come to the theater.</i>

591
00:27:18,096 --> 00:27:19,930
What Stacy and Hamet
were presenting

592
00:27:19,931 --> 00:27:21,932
was a very innovative
and very different idea

593
00:27:21,933 --> 00:27:24,059
on how to drive people
to the movie theater.

594
00:27:24,060 --> 00:27:28,605
We said, we will improve
moviegoing by 60%.

595
00:27:28,606 --> 00:27:31,108
And if we do that,
all we want to do

596
00:27:31,109 --> 00:27:33,694
is participate in
some of that upside.

597
00:27:33,695 --> 00:27:36,447
Stacy and Hamet
did a fantastic job

598
00:27:36,448 --> 00:27:39,283
of teeing up a
relationship with AMC.

599
00:27:39,284 --> 00:27:40,284
They were visionaries,

600
00:27:40,285 --> 00:27:42,369
and they wanted to be
visionaries in the space.

601
00:27:42,370 --> 00:27:44,955
They knew that the historical
use of movie theaters

602
00:27:44,956 --> 00:27:46,957
was going to change
in radical ways.

603
00:27:46,958 --> 00:27:48,834
<i>Their thinking was clear.</i>

604
00:27:48,835 --> 00:27:51,587
<i>It complemented all of
our strategic direction.</i>

605
00:27:51,588 --> 00:27:53,797
Frankly, a no-brainer,
because if it works,

606
00:27:53,798 --> 00:27:56,550
we're going to want to
go national with it.

607
00:27:56,551 --> 00:27:59,094
<i>So, we ran a double-blind survey</i>

608
00:27:59,095 --> 00:28:02,806
over a two-year period
at AMC exclusively.

609
00:28:02,807 --> 00:28:07,478
And we confirmed there
was 112% increase...

610
00:28:07,479 --> 00:28:08,812
I can still see that number...

611
00:28:08,813 --> 00:28:12,358
112% increase in
moviegoing behavior

612
00:28:12,359 --> 00:28:15,486
<i>after people joined MoviePass,</i>

613
00:28:15,487 --> 00:28:18,155
more than we had estimated.

614
00:28:18,156 --> 00:28:19,281
<i>It could work.</i>

615
00:28:19,282 --> 00:28:21,241
<i>The attendance curve could
be bent in such a way</i>

616
00:28:21,242 --> 00:28:23,202
<i>that you could get
incremental moviegoing.</i>

617
00:28:23,203 --> 00:28:25,162
This thing is a win-win-win
for the studios,

618
00:28:25,163 --> 00:28:27,248
the theater owners,
and the consumer.

619
00:28:28,750 --> 00:28:32,002
And Gerry agreed to
roll MoviePass out

620
00:28:32,003 --> 00:28:34,838
in partnership with
AMC nationwide.

621
00:28:34,839 --> 00:28:36,840
We were thrilled.

622
00:28:36,841 --> 00:28:38,802
The future was finally
going to happen.

623
00:28:44,599 --> 00:28:47,851
<i>But Gerry made a
decision to move on</i>

624
00:28:47,852 --> 00:28:49,812
<i>to another company.</i>

625
00:28:49,813 --> 00:28:51,855
The new CEO was a
guy named Adam Aron,

626
00:28:51,856 --> 00:28:55,567
<i>who was just far less receptive.</i>

627
00:28:55,568 --> 00:28:57,194
He gave us a hard no

628
00:28:57,195 --> 00:29:00,698
that he liked the idea and
believed in subscription,

629
00:29:00,699 --> 00:29:03,033
but said, we'd rather
do it ourselves.

630
00:29:03,034 --> 00:29:05,452
I didn't know what
we were going to do.

631
00:29:05,453 --> 00:29:08,123
I honestly was like, we're done.

632
00:29:11,918 --> 00:29:14,211
<i>All of these investors
that were kind of looking</i>

633
00:29:14,212 --> 00:29:16,046
<i>like they were about to come in,</i>

634
00:29:16,047 --> 00:29:18,048
<i>everybody started slowing down.</i>

635
00:29:18,049 --> 00:29:22,011
And it was, if theaters
won't invest in this concept

636
00:29:22,012 --> 00:29:24,638
and studios won't
invest in this concept,

637
00:29:24,639 --> 00:29:26,807
why should we?

638
00:29:26,808 --> 00:29:29,268
<i>It wasn't that we weren't
ringing on the doors.</i>

639
00:29:29,269 --> 00:29:32,396
<i>We knew everybody. We
had met with everyone.</i>

640
00:29:32,397 --> 00:29:34,064
<i>Of all of the industries</i>

641
00:29:34,065 --> 00:29:36,108
<i>I've ever spent time
in in my career,</i>

642
00:29:36,109 --> 00:29:38,610
I found moviegoing to be one
of the most insular, right?

643
00:29:38,611 --> 00:29:40,404
If you're not part
of the community,

644
00:29:40,405 --> 00:29:41,447
if you're not an insider,

645
00:29:41,448 --> 00:29:43,073
you're automatically
an outsider.

646
00:29:43,074 --> 00:29:44,825
Well, all industries have
a little bit of that.

647
00:29:44,826 --> 00:29:46,076
But in Hollywood,

648
00:29:46,077 --> 00:29:48,038
I found that that was
probably the worst of all.

649
00:29:53,543 --> 00:29:55,669
The cash burn was
still significant.

650
00:29:55,670 --> 00:29:57,963
And so I was providing
some more financing

651
00:29:57,964 --> 00:30:00,215
because I didn't
want to see it die.

652
00:30:00,216 --> 00:30:04,553
Somehow, Chris got
connected with Mitch.

653
00:30:04,554 --> 00:30:07,973
<i>Mitch was starting to suggest</i>

654
00:30:07,974 --> 00:30:12,686
that his involvement would
help unlock some more capital.

655
00:30:12,687 --> 00:30:14,813
Chris said, I can't keep funding

656
00:30:14,814 --> 00:30:16,774
unless we make a change.

657
00:30:16,775 --> 00:30:21,612
And I'd like to bring
in Mitch Lowe as a CEO.

658
00:30:21,613 --> 00:30:22,988
<i>I got on a red-eye,</i>

659
00:30:22,989 --> 00:30:25,115
<i>and I flew out to have
the conversation in person</i>

660
00:30:25,116 --> 00:30:27,951
and to say, look, this
isn't working this way.

661
00:30:27,952 --> 00:30:31,455
We've got to go with
Mitch to kind of amplify

662
00:30:31,456 --> 00:30:33,999
some of the very good
stuff that we're doing.

663
00:30:34,000 --> 00:30:35,918
And I know you're not going
to be happy with that.

664
00:30:35,919 --> 00:30:37,294
But, you know,

665
00:30:37,295 --> 00:30:40,255
I think that you guys
could be good partners,

666
00:30:40,256 --> 00:30:42,716
but we need to put Mitch
in charge at this point

667
00:30:42,717 --> 00:30:46,136
and try to turbocharge
the operations here.

668
00:30:46,137 --> 00:30:50,974
He said, you can either
go with this, or I'm out.

669
00:30:50,975 --> 00:30:54,436
And I just didn't know
where we could find

670
00:30:54,437 --> 00:30:56,814
an ally that we had in Chris.

671
00:30:56,815 --> 00:30:58,691
I rolled with that decision,

672
00:30:58,692 --> 00:31:00,651
and that was a
decision that I made,

673
00:31:00,652 --> 00:31:02,903
to go in that direction.

674
00:31:02,904 --> 00:31:04,738
<i>Stacy still had a role.</i>

675
00:31:04,739 --> 00:31:06,407
I still had a role on the board.

676
00:31:06,408 --> 00:31:09,493
And Mitch was going to be
some potentially new blood

677
00:31:09,494 --> 00:31:11,954
that might provide

678
00:31:11,955 --> 00:31:14,707
some gray hair and optics.

679
00:31:14,708 --> 00:31:16,166
Stacy and I were brothers

680
00:31:16,167 --> 00:31:17,918
in this journey
from the beginning.

681
00:31:17,919 --> 00:31:19,712
<i>There were some concerns</i>

682
00:31:19,713 --> 00:31:23,215
<i>that both he and I
had around Mitch.</i>

683
00:31:23,216 --> 00:31:25,634
When he joined,

684
00:31:25,635 --> 00:31:28,762
<i>the board structure changed.</i>

685
00:31:28,763 --> 00:31:31,140
<i>Hamet and I were two seats.</i>

686
00:31:31,141 --> 00:31:34,768
<i>Chris was a seat,
then Mitch was a seat,</i>

687
00:31:34,769 --> 00:31:37,980
<i>and then Chris had another seat.</i>

688
00:31:37,981 --> 00:31:41,067
<i>So you had this shift of power.</i>

689
00:31:42,444 --> 00:31:44,361
There were many times that
Stacy and I were talking

690
00:31:44,362 --> 00:31:46,780
to each other about
just keeping the faith

691
00:31:46,781 --> 00:31:48,700
and keeping on going.

692
00:31:55,749 --> 00:31:59,752
<i>If you have a white male</i>

693
00:31:59,753 --> 00:32:02,629
<i>with more gray hair,</i>

694
00:32:02,630 --> 00:32:07,301
that could inspire other
white males with white hair

695
00:32:07,302 --> 00:32:10,721
to be more
comfortable investing.

696
00:32:10,722 --> 00:32:12,765
It's a factor that we considered

697
00:32:12,766 --> 00:32:15,727
through the entire
entrepreneurial journey.

698
00:32:17,187 --> 00:32:20,105
<i>The stats are pretty clear,
especially back then.</i>

699
00:32:20,106 --> 00:32:22,358
<i>Women and minorities</i>

700
00:32:22,359 --> 00:32:27,154
were only accessing 1% to
3% of all venture capital.

701
00:32:27,155 --> 00:32:29,531
So that's a pretty small number.

702
00:32:29,532 --> 00:32:33,243
And Hamet and I were
seasoned entrepreneurs

703
00:32:33,244 --> 00:32:36,330
and had been around and had
very successful track records.

704
00:32:36,331 --> 00:32:39,792
For Black founders,
Black entrepreneurs,

705
00:32:39,793 --> 00:32:42,544
no matter what your business is,

706
00:32:42,545 --> 00:32:45,381
the access to capital...

707
00:32:45,382 --> 00:32:46,840
there's no equity.

708
00:32:46,841 --> 00:32:48,384
It's a challenge for
every entrepreneur,

709
00:32:48,385 --> 00:32:50,302
but it's much more
of a challenge

710
00:32:50,303 --> 00:32:53,430
<i>for Black entrepreneurs
than it is for anyone else.</i>

711
00:32:53,431 --> 00:32:57,976
There's certain stereotypes
that society has

712
00:32:57,977 --> 00:33:00,688
of what a successful
entrepreneur looks like,

713
00:33:00,689 --> 00:33:02,106
and we didn't look like that.

714
00:33:02,107 --> 00:33:03,982
And it's hard to tell sometimes

715
00:33:03,983 --> 00:33:06,110
whether that lack of receptivity

716
00:33:06,111 --> 00:33:08,737
is a function of doing
something disruptive

717
00:33:08,738 --> 00:33:09,947
in an industry

718
00:33:09,948 --> 00:33:12,991
or dealing with two brothers

719
00:33:12,992 --> 00:33:15,619
trying to do something
disruptive in an industry.

720
00:33:15,620 --> 00:33:18,622
A lot of times...

721
00:33:18,623 --> 00:33:19,999
African-American,

722
00:33:20,000 --> 00:33:22,084
because we don't have
all the opportunity,

723
00:33:22,085 --> 00:33:26,088
we're so excited that
somebody is believing in us,

724
00:33:26,089 --> 00:33:28,882
and sometimes we're
on our last breath,

725
00:33:28,883 --> 00:33:30,092
we take the money,

726
00:33:30,093 --> 00:33:32,052
and we don't ask what
you want out of it.

727
00:33:32,053 --> 00:33:35,180
Then whatever you get
is at a predatory level.

728
00:33:35,181 --> 00:33:38,475
So you're set up to fail.

729
00:33:38,476 --> 00:33:42,104
<i>Mitch was brought in as the CEO.</i>

730
00:33:42,105 --> 00:33:46,150
<i>Mitch came out to New York
to meet with the team.</i>

731
00:33:46,151 --> 00:33:49,987
He said, so you're on
probation for a while,

732
00:33:49,988 --> 00:33:51,697
and I'm going to see how you are

733
00:33:51,698 --> 00:33:54,992
and determine whether or
not I'm going to keep you.

734
00:33:54,993 --> 00:33:57,620
Oh, God. These old stories.

735
00:34:01,458 --> 00:34:04,209
<i>This is a company, not a family.</i>

736
00:34:04,210 --> 00:34:08,422
<i>And, you know, we're here to
make the company successful,</i>

737
00:34:08,423 --> 00:34:12,843
<i>and everything has got to,
you know, revolve around that.</i>

738
00:34:12,844 --> 00:34:15,012
I thought that it was arrogant.

739
00:34:15,013 --> 00:34:17,389
I thought that it
was mean-spirited.

740
00:34:17,390 --> 00:34:19,391
I thought it was unnecessary.

741
00:34:19,392 --> 00:34:21,852
While Hamet was a co-founder,

742
00:34:21,853 --> 00:34:24,355
he really was not active at all.

743
00:34:24,356 --> 00:34:27,691
With Stacy, I realized,
you know, Stacy knows

744
00:34:27,692 --> 00:34:29,234
the ins and outs.

745
00:34:29,235 --> 00:34:31,028
He knows the software.

746
00:34:31,029 --> 00:34:35,032
And so I moved
Stacy from being CEO

747
00:34:35,033 --> 00:34:37,202
to being chief
operating officer.

748
00:34:38,495 --> 00:34:41,246
<i>I'm just not going to say</i>

749
00:34:41,247 --> 00:34:43,415
<i>what came through my
mind at that moment.</i>

750
00:34:43,416 --> 00:34:46,043
<i>But it's like that sketch
from "Key & Peele"...</i>

751
00:34:46,044 --> 00:34:47,878
<i>"The Anger Translator."</i>

752
00:34:47,879 --> 00:34:49,546
Good evening, my
fellow Americans.

753
00:34:49,547 --> 00:34:53,050
With me as always is my
anger translator, Luther.

754
00:34:53,051 --> 00:34:56,470
I hate you!

755
00:34:56,471 --> 00:34:57,805
86, you [bleep]...

756
00:34:57,806 --> 00:35:00,766
<i>The anger translator saying
what he really wants to say.</i>

757
00:35:00,767 --> 00:35:02,393
I was respectful to him.

758
00:35:02,394 --> 00:35:04,937
I said, I'm grateful
that you're here.

759
00:35:04,938 --> 00:35:06,689
I'm looking forward
to working with you.

760
00:35:06,690 --> 00:35:07,815
And that's what I said.

761
00:35:07,816 --> 00:35:10,234
I hear your voices, and
I'm aware of your concerns.

762
00:35:10,235 --> 00:35:12,069
So maybe if you can
chill the hell out

763
00:35:12,070 --> 00:35:13,946
for, like, a second,
then maybe I can focus

764
00:35:13,947 --> 00:35:15,615
on some [bleep], you know?

765
00:35:18,368 --> 00:35:21,370
<i>I had an expectation that
Mitch was going to provide</i>

766
00:35:21,371 --> 00:35:22,955
<i>more financing to the company</i>

767
00:35:22,956 --> 00:35:25,708
and that that was gonna take
some of the burden off of me.

768
00:35:25,709 --> 00:35:27,960
And that did not happen.

769
00:35:27,961 --> 00:35:31,672
<i>And that's when HMNY
and Ted came in.</i>

770
00:35:31,673 --> 00:35:33,674
<i>Ted was just slick.</i>

771
00:35:33,675 --> 00:35:38,095
That's the best word I
could come up with, very...

772
00:35:38,096 --> 00:35:39,763
just slick.

773
00:35:39,764 --> 00:35:44,184
We had skepticism around
whether or not HMNY had money.

774
00:35:44,185 --> 00:35:47,563
We had skepticisms
around whether or not

775
00:35:47,564 --> 00:35:50,691
they were credible from
a strategic standpoint...

776
00:35:50,692 --> 00:35:52,860
like, would they be the
right investors to have?

777
00:35:52,861 --> 00:35:55,988
But in terms of the capital,

778
00:35:55,989 --> 00:35:57,949
they actually did
have the capital.

779
00:36:00,326 --> 00:36:02,619
<i>The pitch that Ted and
his group were making</i>

780
00:36:02,620 --> 00:36:05,289
<i>was that they would be
able to drive growth.</i>

781
00:36:05,290 --> 00:36:07,666
First, I want to welcome
everybody here in...

782
00:36:07,667 --> 00:36:10,127
<i>There was a hedge
fund that turned out</i>

783
00:36:10,128 --> 00:36:12,963
to be the primary backer

784
00:36:12,964 --> 00:36:16,633
of HMNY... Hudson Bay.

785
00:36:16,634 --> 00:36:19,345
And so the first
tranche of the financing

786
00:36:19,346 --> 00:36:22,431
allowed us to start to do
some really interesting things

787
00:36:22,432 --> 00:36:24,141
that we had never
been able to do

788
00:36:24,142 --> 00:36:25,643
because of the
amount of capital.

789
00:36:31,983 --> 00:36:34,485
<i>And the stock is exploding today</i>

790
00:36:34,486 --> 00:36:37,488
<i>after the CNA team
called it a gold mine.</i>

791
00:36:37,489 --> 00:36:41,533
Right now HMNY is up 21% today

792
00:36:41,534 --> 00:36:43,035
<i>at 2,541.</i>

793
00:36:43,036 --> 00:36:46,205
There was this huge
run-up of the stock,

794
00:36:46,206 --> 00:36:48,624
where a lot of people were
really excited about it.

795
00:36:48,625 --> 00:36:51,752
It got crazy with Wall Street,

796
00:36:51,753 --> 00:36:53,379
particularly millennials.

797
00:36:53,380 --> 00:36:55,923
This was exactly what
they were looking for.

798
00:36:55,924 --> 00:36:57,925
They had missed out on Netflix.

799
00:36:57,926 --> 00:37:00,344
Put my money in this, I
could become a millionaire,

800
00:37:00,345 --> 00:37:02,012
like all those
Netflix millionaires.

801
00:37:02,013 --> 00:37:03,222
It took off.

802
00:37:03,223 --> 00:37:05,933
Really, the whole excitement
and lure for a retail investor

803
00:37:05,934 --> 00:37:09,019
is getting in on the ground
floor of the next billion,

804
00:37:09,020 --> 00:37:10,270
$10 billion business.

805
00:37:10,271 --> 00:37:12,356
I believe I got in around $9,

806
00:37:12,357 --> 00:37:14,149
and, man, I felt like a genius.

807
00:37:14,150 --> 00:37:18,404
<i>Shares climbed 146%.</i>

808
00:37:18,405 --> 00:37:20,572
So $9.99, you can watch
as many movies you want.

809
00:37:20,573 --> 00:37:22,366
Fuck, you can't beat that, man.

810
00:37:22,367 --> 00:37:24,576
That's better than
Redbox. Fuck Redbox.

811
00:37:24,577 --> 00:37:27,579
Now is an excellent,
excellent time

812
00:37:27,580 --> 00:37:29,289
to buy into HMNY.

813
00:37:29,290 --> 00:37:31,667
<i>There's no denying that
it was a real rocket ship</i>

814
00:37:31,668 --> 00:37:33,544
when it came to
subscriber growth.

815
00:37:33,545 --> 00:37:35,796
And that was the
number-one metric

816
00:37:35,797 --> 00:37:38,966
that a lot of people
were paying attention to.

817
00:37:38,967 --> 00:37:40,844
And that was just
through the roof.

818
00:37:43,430 --> 00:37:46,473
<i>It was pretty exciting</i>

819
00:37:46,474 --> 00:37:49,810
<i>because the stock was
going through the roof.</i>

820
00:37:49,811 --> 00:37:53,814
Public markets were excited
about the user growth.

821
00:37:53,815 --> 00:37:58,318
<i>The stock price
climbed from $2 a share</i>

822
00:37:58,319 --> 00:37:59,862
<i>up to $38 a share.</i>

823
00:37:59,863 --> 00:38:01,739
<i>So the brand was there.</i>

824
00:38:01,740 --> 00:38:04,116
<i>The acknowledgment
in the marketplace</i>

825
00:38:04,117 --> 00:38:06,577
of the value we had
created was there,

826
00:38:06,578 --> 00:38:09,580
but we were paying for
tickets full price.

827
00:38:09,581 --> 00:38:13,584
<i>The average ticket
price was $11.50,</i>

828
00:38:13,585 --> 00:38:16,420
<i>and we were charging
$10 a month.</i>

829
00:38:16,421 --> 00:38:19,506
<i>But people were going
to four movies a month.</i>

830
00:38:19,507 --> 00:38:22,426
<i>We were losing a lot of money.</i>

831
00:38:22,427 --> 00:38:26,138
<i>And so you took
that $25 million,</i>

832
00:38:26,139 --> 00:38:29,099
<i>and you just said, poof.</i>

833
00:38:29,100 --> 00:38:32,686
<i>We had a million users,
and active users, you know,</i>

834
00:38:32,687 --> 00:38:34,605
not just like, oh, I
have a subscription,

835
00:38:34,606 --> 00:38:36,940
but I don't really use
it... no, they were active.

836
00:38:36,941 --> 00:38:38,984
<i>Or some people were
seeing the same movie</i>

837
00:38:38,985 --> 00:38:40,235
<i>six times in a week.</i>

838
00:38:40,236 --> 00:38:41,403
Okay, I will admit it.

839
00:38:41,404 --> 00:38:43,614
<i>I would go see</i>

840
00:38:43,615 --> 00:38:46,617
<i>about a half hour
of "The Avengers"</i>

841
00:38:46,618 --> 00:38:48,827
and then come back the next day

842
00:38:48,828 --> 00:38:51,955
to see the next hour
of "The Avengers."

843
00:38:51,956 --> 00:38:53,582
<i>And then if I missed a part,</i>

844
00:38:53,583 --> 00:38:55,834
I would go back the next day

845
00:38:55,835 --> 00:38:58,712
to go see the first half
of "The Avengers" again.

846
00:38:58,713 --> 00:39:00,297
Why?

847
00:39:00,298 --> 00:39:03,050
Because I could.

848
00:39:03,051 --> 00:39:06,303
I said, I'm going to go to
watch "Crazy Rich Asians"

849
00:39:06,304 --> 00:39:10,224
<i>every single day for
a week at the theater.</i>

850
00:39:10,225 --> 00:39:12,476
Yeah.

851
00:39:12,477 --> 00:39:15,230
I watched "Crazy Rich
Asians" 14 times overall.

852
00:39:18,233 --> 00:39:19,817
Because they can.

853
00:39:19,818 --> 00:39:21,944
I liked it a lot... it's a
really good romantic comedy,

854
00:39:21,945 --> 00:39:23,821
and not many good romantic
comedies around anymore.

855
00:39:23,822 --> 00:39:27,157
<i>I went probably close
to 20 movies a month.</i>

856
00:39:27,158 --> 00:39:28,867
<i>I wish I could have seen more.</i>

857
00:39:28,868 --> 00:39:30,160
You know, I was engaged,

858
00:39:30,161 --> 00:39:32,454
so I didn't have a
lot of free time.

859
00:39:32,455 --> 00:39:35,750
In total, I went to the
movie theater 428 times.

860
00:39:37,419 --> 00:39:39,878
Don't hate the
player, hate the game.

861
00:39:39,879 --> 00:39:42,506
<i>Every board meeting
I was vehement</i>

862
00:39:42,507 --> 00:39:44,800
that we needed to
increase the price

863
00:39:44,801 --> 00:39:47,803
because there was no way
for it to be profitable

864
00:39:47,804 --> 00:39:48,971
at this level.

865
00:39:48,972 --> 00:39:51,306
<i>But Mitch and Ted were
doing their own thing</i>

866
00:39:51,307 --> 00:39:53,559
<i>and making those decisions.</i>

867
00:39:53,560 --> 00:39:55,519
<i>Obviously, we couldn't
have a subscription service</i>

868
00:39:55,520 --> 00:39:58,647
where, you know, we're paying

869
00:39:58,648 --> 00:40:01,025
more than we're receiving.

870
00:40:01,026 --> 00:40:05,362
<i>But I think Mitch and
Ted were more focused</i>

871
00:40:05,363 --> 00:40:08,032
on what was making
the stock move,

872
00:40:08,033 --> 00:40:12,036
which I think at that time
was just top-line user growth.

873
00:40:12,037 --> 00:40:14,121
<i>And that was all that
they were fixated on.</i>

874
00:40:14,122 --> 00:40:16,457
<i>And they were confident
that would allow them</i>

875
00:40:16,458 --> 00:40:18,417
<i>to figure the rest out later.</i>

876
00:40:18,418 --> 00:40:21,754
We have figured out a
way to give people a deal

877
00:40:21,755 --> 00:40:24,590
they cannot believe we
can even afford to give.

878
00:40:24,591 --> 00:40:27,259
<i>Mitch was able to get
a lot of deals in place</i>

879
00:40:27,260 --> 00:40:30,137
that Stacy had not
managed to move along.

880
00:40:30,138 --> 00:40:33,140
<i>We're on the way to over
5 million subscribers</i>

881
00:40:33,141 --> 00:40:34,516
by the end of the year.

882
00:40:34,517 --> 00:40:38,228
And that's when the cash flow
starts to become positive.

883
00:40:38,229 --> 00:40:41,231
We knew 5 million subscribers

884
00:40:41,232 --> 00:40:43,400
would get us to somewhere

885
00:40:43,401 --> 00:40:45,903
between 12% to 15%

886
00:40:45,904 --> 00:40:48,572
of all the box office
in the country,

887
00:40:48,573 --> 00:40:51,700
which I believed
was enough clout

888
00:40:51,701 --> 00:40:56,663
to convince AMC to discount us,

889
00:40:56,664 --> 00:41:00,000
the studios to pay us
millions of dollars a month

890
00:41:00,001 --> 00:41:01,085
to advertise.

891
00:41:01,086 --> 00:41:03,921
<i>Then selling the data</i>

892
00:41:03,922 --> 00:41:06,298
<i>was going to be
extremely valuable.</i>

893
00:41:06,299 --> 00:41:08,258
How much of this
is about the data,

894
00:41:08,259 --> 00:41:09,843
about knowing Tyler
and Melissa and me?

895
00:41:09,844 --> 00:41:12,096
Yeah, a huge amount
of it is the data.

896
00:41:12,097 --> 00:41:15,599
Because, you know, this
whole system is broken

897
00:41:15,600 --> 00:41:16,975
in the movie-theater business.

898
00:41:16,976 --> 00:41:20,145
Imagine, Warner
Brothers does not know

899
00:41:20,146 --> 00:41:22,439
who saw all the previous Batman.

900
00:41:22,440 --> 00:41:25,442
They have to spend $50
million, $100 million

901
00:41:25,443 --> 00:41:27,611
marketing every time
a film comes out.

902
00:41:27,612 --> 00:41:29,655
And that's why
Helios and Matheson,

903
00:41:29,656 --> 00:41:32,491
a data analytics firm,
actually just made a...

904
00:41:32,492 --> 00:41:34,034
they took a stake
in your company.

905
00:41:34,035 --> 00:41:35,160
That's right.

906
00:41:35,161 --> 00:41:37,329
There was a ton of enthusiasm,

907
00:41:37,330 --> 00:41:41,875
but we were, like,
severely understaffed.

908
00:41:41,876 --> 00:41:44,795
<i>A big moment for us
was the first time</i>

909
00:41:44,796 --> 00:41:47,381
that the, like, app went down.

910
00:41:47,382 --> 00:41:49,884
The entire platform
was virtually unusable.

911
00:41:54,681 --> 00:41:57,307
<i>Thursday night to Sunday night,</i>

912
00:41:57,308 --> 00:41:59,435
<i>we were being hit hard.</i>

913
00:41:59,436 --> 00:42:00,978
It was one hit after another.

914
00:42:00,979 --> 00:42:03,480
Our servers were
getting annihilated...

915
00:42:03,481 --> 00:42:06,066
All the time getting emails,

916
00:42:06,067 --> 00:42:07,776
<i>errors, errors, errors.</i>

917
00:42:07,777 --> 00:42:11,321
I worried about the brand,

918
00:42:11,322 --> 00:42:13,532
our reputation in the industry.

919
00:42:13,533 --> 00:42:15,451
<i>Mitch and Ted would
push back and say,</i>

920
00:42:15,452 --> 00:42:17,327
<i>we know what we're doing.</i>

921
00:42:17,328 --> 00:42:18,996
<i>We bought you.</i>

922
00:42:18,997 --> 00:42:20,206
Thank you for sharing.

923
00:42:26,963 --> 00:42:30,507
<i>At the monthly board meeting,
Hamet and I were told</i>

924
00:42:30,508 --> 00:42:33,178
<i>we were being removed
from the board.</i>

925
00:42:34,846 --> 00:42:37,514
They said, hey, we're
reconstituting the board.

926
00:42:37,515 --> 00:42:41,310
<i>We don't want the
co-founders on it.</i>

927
00:42:41,311 --> 00:42:43,479
<i>I remember Stacy pushing back.</i>

928
00:42:43,480 --> 00:42:46,899
<i>It broke my heart to
see two Black founders</i>

929
00:42:46,900 --> 00:42:49,026
create a company the way we did,

930
00:42:49,027 --> 00:42:52,196
and then all of a sudden,
there was an all-white board.

931
00:42:52,197 --> 00:42:55,074
I didn't want to be in a
place where I was, like,

932
00:42:55,075 --> 00:42:57,785
really feeling like in
the back of the bus.

933
00:42:57,786 --> 00:42:59,828
I'd say to myself,
the value is high.

934
00:42:59,829 --> 00:43:02,289
I can only hope that these guys

935
00:43:02,290 --> 00:43:05,793
are going to be aligned
with us and be good stewards

936
00:43:05,794 --> 00:43:08,295
of the capital to
continue to make sure

937
00:43:08,296 --> 00:43:10,381
that the business is valuable.

938
00:43:10,382 --> 00:43:12,424
Stacy was...

939
00:43:12,425 --> 00:43:14,885
because he had been
more truly day to day,

940
00:43:14,886 --> 00:43:16,679
fought that a little bit more.

941
00:43:16,680 --> 00:43:18,764
<i>Unfortunately, there are people</i>

942
00:43:18,765 --> 00:43:23,352
who are not cut out for
the stress and anxiety

943
00:43:23,353 --> 00:43:25,020
caused in a start-up.

944
00:43:25,021 --> 00:43:27,231
Ultimately, that was a
decision that Mitch made,

945
00:43:27,232 --> 00:43:29,149
and it was one that we
needed to back him on...

946
00:43:29,150 --> 00:43:31,527
or we felt we needed to
back him on at the time.

947
00:43:31,528 --> 00:43:34,571
<i>I reached out to Chris
when they told me</i>

948
00:43:34,572 --> 00:43:37,282
they were kicking
me off the board.

949
00:43:37,283 --> 00:43:38,867
He didn't respond.

950
00:43:38,868 --> 00:43:41,578
Chris is such a sweet guy.

951
00:43:41,579 --> 00:43:44,415
The last thing he would
ever do is fire anybody.

952
00:43:44,416 --> 00:43:46,250
So he said, you deal with it.

953
00:43:46,251 --> 00:43:48,378
And so that's what I did.

954
00:43:49,879 --> 00:43:53,590
<i>A few weeks later, there
was an email from Mitch.</i>

955
00:43:53,591 --> 00:43:55,509
"We want to thank you
for your services,

956
00:43:55,510 --> 00:43:58,137
"but you're no longer
needed at the company,

957
00:43:58,138 --> 00:44:00,222
"and...

958
00:44:00,223 --> 00:44:04,101
there will be someone moving
into your office next week."

959
00:44:04,102 --> 00:44:06,562
<i>We were all just pretty upset.</i>

960
00:44:06,563 --> 00:44:09,773
How do you fire Stacy
Spikes from MoviePass?

961
00:44:09,774 --> 00:44:11,567
The founder of the
company is leaving.

962
00:44:11,568 --> 00:44:12,901
That's not a good sign.

963
00:44:12,902 --> 00:44:14,945
He's, like, the
heart of MoviePass.

964
00:44:14,946 --> 00:44:17,781
I think I did a very fair...

965
00:44:17,782 --> 00:44:19,742
You know, he still
owned all his stock.

966
00:44:19,743 --> 00:44:21,702
He still owned all his options.

967
00:44:21,703 --> 00:44:23,954
I just thought that
it would be better

968
00:44:23,955 --> 00:44:26,040
if he wasn't a part of the team.

969
00:44:26,041 --> 00:44:28,250
Some people were really upset.

970
00:44:28,251 --> 00:44:31,295
A few people started crying.

971
00:44:31,296 --> 00:44:33,088
A lot of hugs.

972
00:44:33,089 --> 00:44:36,008
And I said, you know I live
right around the corner.

973
00:44:36,009 --> 00:44:38,927
I'll be there if
you need anything.

974
00:44:38,928 --> 00:44:41,096
<i>I packed my stuff up,</i>

975
00:44:41,097 --> 00:44:44,516
<i>and I left the key on the desk,</i>

976
00:44:44,517 --> 00:44:46,686
<i>and I walked out of my office.</i>

977
00:44:48,271 --> 00:44:50,356
I called my wife before.

978
00:44:50,357 --> 00:44:53,692
So I think she had gotten
all of her crying and stuff

979
00:44:53,693 --> 00:44:55,861
completely out
before I got there.

980
00:44:55,862 --> 00:44:58,822
But I got home, and
she gave me a big hug,

981
00:44:58,823 --> 00:45:00,909
and she says,
honey, I'm so sorry.

982
00:45:02,160 --> 00:45:04,828
And then it just
kind of settled in.

983
00:45:04,829 --> 00:45:07,499
It was like, wow,
this is a trip.

984
00:45:31,356 --> 00:45:34,525
<i>No one knew anything about
the founder of the company</i>

985
00:45:34,526 --> 00:45:36,026
<i>being ousted,</i>

986
00:45:36,027 --> 00:45:38,195
but at this point,
that's when the company

987
00:45:38,196 --> 00:45:39,406
drastically changed.

988
00:45:41,199 --> 00:45:43,784
<i>There was definitely an
atmosphere of partying.</i>

989
00:45:43,785 --> 00:45:45,703
<i>You know, every single month,</i>

990
00:45:45,704 --> 00:45:47,871
there was a
MoviePass-hosted event.

991
00:45:47,872 --> 00:45:50,499
<i>That was really part
of the excitement</i>

992
00:45:50,500 --> 00:45:53,043
of our operations,

993
00:45:53,044 --> 00:45:56,881
<i>trying to develop
PR and marketing...</i>

994
00:45:58,174 --> 00:46:00,676
<i>Making contacts.</i>

995
00:46:00,677 --> 00:46:02,387
<i>Ted's the best at that.</i>

996
00:46:04,431 --> 00:46:06,932
<i>He is someone who understands</i>

997
00:46:06,933 --> 00:46:10,270
<i>what convinces people
to buy a product.</i>

998
00:46:11,730 --> 00:46:13,897
<i>He is exuberant.</i>

999
00:46:13,898 --> 00:46:17,067
Ted portrayed a kind
of visionary status

1000
00:46:17,068 --> 00:46:20,112
that you see with
business leaders like him.

1001
00:46:20,113 --> 00:46:23,991
I asked him one time, why
are you giving a $100 tip

1002
00:46:23,992 --> 00:46:26,910
you know, for a sandwich?

1003
00:46:26,911 --> 00:46:30,039
<i>And he said, my mom
put me through school.</i>

1004
00:46:30,040 --> 00:46:32,417
<i>She raised us all on tips.</i>

1005
00:46:36,796 --> 00:46:39,381
<i>Our first company holiday party,</i>

1006
00:46:39,382 --> 00:46:41,967
everyone's just... you know,
wine everywhere, right?

1007
00:46:41,968 --> 00:46:44,386
Just wine, wine, wine...
free. Like, here take it.

1008
00:46:44,387 --> 00:46:46,138
<i>Mitch was making a toast,</i>

1009
00:46:46,139 --> 00:46:48,349
<i>and he said, all your
stock options, you know...</i>

1010
00:46:48,350 --> 00:46:50,267
<i>You're gonna be good. We're
gonna be making money.</i>

1011
00:46:50,268 --> 00:46:52,519
He said, mark my words.
Everyone's going to be rich.

1012
00:46:52,520 --> 00:46:55,272
Everyone's gonna make it.

1013
00:46:55,273 --> 00:46:58,734
<i>We all went back to Ted's
house, his apartment.</i>

1014
00:46:58,735 --> 00:47:00,570
It was very nice.
It was very nice.

1015
00:47:04,824 --> 00:47:06,617
<i>That was always
something that was...</i>

1016
00:47:06,618 --> 00:47:08,494
especially seeing his
apartment building...

1017
00:47:08,495 --> 00:47:13,374
was, like, living in this,
you know, lavish penthouse.

1018
00:47:13,375 --> 00:47:16,919
<i>Ted is a wealthy guy who
has a lot of connections</i>

1019
00:47:16,920 --> 00:47:19,297
<i>who were changing the culture.</i>

1020
00:47:22,801 --> 00:47:25,260
His nephew worked there,

1021
00:47:25,261 --> 00:47:28,263
you know, some other family
members, close friends.

1022
00:47:28,264 --> 00:47:30,433
My friend of this and
my friend of that.

1023
00:47:31,768 --> 00:47:35,938
<i>Ted's official photographer
is his executive assistant.</i>

1024
00:47:35,939 --> 00:47:38,982
<i>Bob Ellis was a close
friend of Ted Farnsworth...</i>

1025
00:47:38,983 --> 00:47:42,152
<i>is the ex-husband of Diana Ross.</i>

1026
00:47:42,153 --> 00:47:46,323
<i>He has been in and out of
the Hollywood social scene</i>

1027
00:47:46,324 --> 00:47:48,158
<i>for decades,</i>

1028
00:47:48,159 --> 00:47:50,536
<i>was basically hired
to be in charge</i>

1029
00:47:50,537 --> 00:47:53,247
<i>of marketing as a consultant.</i>

1030
00:47:53,248 --> 00:47:54,999
I'm going to talk a little bit

1031
00:47:55,000 --> 00:47:57,918
about relationships
and connecting, and...

1032
00:47:57,919 --> 00:48:00,671
<i>One of the major figures
that Mitch Lowe hired</i>

1033
00:48:00,672 --> 00:48:02,172
<i>was Khalid Itum.</i>

1034
00:48:02,173 --> 00:48:05,718
<i>He was someone who
was selling furniture</i>

1035
00:48:05,719 --> 00:48:08,554
<i>at one point in his life and
decided to change things up.</i>

1036
00:48:08,555 --> 00:48:12,933
<i>And he happened to meet
Mitch at a conference.</i>

1037
00:48:12,934 --> 00:48:14,351
Basically pitched him.

1038
00:48:14,352 --> 00:48:18,355
Said, hey, I think I could
be a good fit for your team.

1039
00:48:18,356 --> 00:48:21,066
<i>He just got to the point
of saying the right things,</i>

1040
00:48:21,067 --> 00:48:23,653
<i>that he just kept going
up and up, up the ladder.</i>

1041
00:48:26,156 --> 00:48:30,075
We needed to think about
having an office in LA.

1042
00:48:30,076 --> 00:48:32,077
<i>I thought of Khalid...</i>

1043
00:48:32,078 --> 00:48:34,747
<i>someone who could
connect with the studios</i>

1044
00:48:34,748 --> 00:48:38,042
<i>to sell advertising
and work out data.</i>

1045
00:48:38,043 --> 00:48:41,712
<i>I made him VP of
business development.</i>

1046
00:48:41,713 --> 00:48:43,964
Khalid, the
connector that he is,

1047
00:48:43,965 --> 00:48:46,717
knows everybody and brought
on a number of people

1048
00:48:46,718 --> 00:48:48,511
in Los Angeles.

1049
00:48:50,263 --> 00:48:53,015
<i>We have this entity
called MoviePass Ventures</i>

1050
00:48:53,016 --> 00:48:55,560
<i>that's going to make movies.</i>

1051
00:48:58,396 --> 00:49:02,024
<i>MoviePass had the ability
to make a small film...</i>

1052
00:49:02,025 --> 00:49:04,526
you know, $1 million,
$2 million films.

1053
00:49:04,527 --> 00:49:07,905
<i>MoviePass could
ensure their success</i>

1054
00:49:07,906 --> 00:49:11,658
by promoting them to our
3 million subscribers,

1055
00:49:11,659 --> 00:49:13,661
<i>buying a ton of tickets.</i>

1056
00:49:15,747 --> 00:49:18,165
A million here and there

1057
00:49:18,166 --> 00:49:21,627
seemed like small change,

1058
00:49:21,628 --> 00:49:25,714
especially relative to
what I saw as the benefit

1059
00:49:25,715 --> 00:49:28,425
that it could be.

1060
00:49:28,426 --> 00:49:32,137
<i>They were on a spending spree.</i>

1061
00:49:32,138 --> 00:49:34,390
It was very nerve-racking

1062
00:49:34,391 --> 00:49:37,101
because we owned a decent
chunk of the business

1063
00:49:37,102 --> 00:49:39,937
and the value of the
business had gone up so much.

1064
00:49:39,938 --> 00:49:43,774
We put our everything into it

1065
00:49:43,775 --> 00:49:45,734
and left at a high point,

1066
00:49:45,735 --> 00:49:48,278
although we had an asterisk
next to that high point.

1067
00:49:48,279 --> 00:49:51,156
<i>When I was fired from MoviePass,</i>

1068
00:49:51,157 --> 00:49:53,450
<i>my ownership was valued</i>

1069
00:49:53,451 --> 00:49:55,994
<i>at around approximately
$80 million.</i>

1070
00:49:55,995 --> 00:49:59,289
But there's, like, a
12-month lock-up period

1071
00:49:59,290 --> 00:50:01,458
that you're not able
to sell your shares.

1072
00:50:01,459 --> 00:50:05,796
If you can't sell it, it's
hard to really count it.

1073
00:50:05,797 --> 00:50:09,675
And so we are
hoping and dependent

1074
00:50:09,676 --> 00:50:13,929
on that business maintaining
and growing its value

1075
00:50:13,930 --> 00:50:16,808
but not in a position
to control that.

1076
00:50:20,895 --> 00:50:22,187
That's why I don't count that.

1077
00:50:22,188 --> 00:50:24,648
I don't count that shit
until it's in my account.

1078
00:50:24,649 --> 00:50:28,527
It's dangerous to do that
math before you can spend it.

1079
00:50:28,528 --> 00:50:31,655
<i>And so it's an incredible
amount of anxiety.</i>

1080
00:50:31,656 --> 00:50:32,990
<i>You're not behind the wheel.</i>

1081
00:50:32,991 --> 00:50:34,616
You're not even
close to the wheel.

1082
00:50:34,617 --> 00:50:37,494
<i>Oh, my God, are they really
spending that much money now?</i>

1083
00:50:37,495 --> 00:50:39,455
Like, that's not going
to sustain, right?

1084
00:50:39,456 --> 00:50:41,331
I'm worried that that's
not going to sustain.

1085
00:50:41,332 --> 00:50:46,253
But maybe they had
a rabbit in the hat.

1086
00:50:46,254 --> 00:50:49,131
<i>Joining us now,
MoviePass's CEO Mitch Lowe</i>

1087
00:50:49,132 --> 00:50:50,424
and Ted Farnsworth.

1088
00:50:50,425 --> 00:50:52,009
Welcome, gentlemen.
- Thank you for having us.

1089
00:50:52,010 --> 00:50:54,178
- So another milestone today.
- Yeah.

1090
00:50:54,179 --> 00:50:58,849
There was a certain point
in late January of 2018

1091
00:50:58,850 --> 00:51:01,852
where a lot of decisions

1092
00:51:01,853 --> 00:51:05,481
started to get made by Ted.

1093
00:51:05,482 --> 00:51:09,485
And I could see these
components coming together.

1094
00:51:09,486 --> 00:51:11,153
MoviePass, within
the next 60 days,

1095
00:51:11,154 --> 00:51:13,155
should be self-sufficient
on its own.

1096
00:51:13,156 --> 00:51:15,282
- Wait. 60 days...
- Yes.

1097
00:51:15,283 --> 00:51:17,368
It's going to be
cash-flow neutral?

1098
00:51:17,369 --> 00:51:19,078
Yeah, like, self-sufficient,

1099
00:51:19,079 --> 00:51:20,830
where they're not going
through cash burn.

1100
00:51:34,094 --> 00:51:35,719
We understood the
business strategy.

1101
00:51:35,720 --> 00:51:37,680
We're going to be able
to set up technologies.

1102
00:51:37,681 --> 00:51:39,807
We're going to be able to
do all these other things.

1103
00:51:39,808 --> 00:51:42,393
We have all of this data from
the consumers that we can use.

1104
00:51:42,394 --> 00:51:43,894
All we had to do was sit back

1105
00:51:43,895 --> 00:51:45,562
and explain the
story to the media.

1106
00:51:45,563 --> 00:51:47,398
And that was a really
great place to be.

1107
00:51:47,399 --> 00:51:50,234
- The idea of selling data...
- We're the only ones...

1108
00:51:50,235 --> 00:51:52,194
Have you been able to
sell any of the data yet?

1109
00:51:52,195 --> 00:51:53,237
- Oh, yes.
- You have?

1110
00:51:53,238 --> 00:51:57,409
Yeah, we've already signed
agreements with studios.

1111
00:52:00,036 --> 00:52:02,162
<i>We're investing in building</i>

1112
00:52:02,163 --> 00:52:04,873
<i>a huge subscriber base.</i>

1113
00:52:04,874 --> 00:52:07,251
People are seeing films they
never would have seen...

1114
00:52:07,252 --> 00:52:09,336
- Right.
- Without a MoviePass card.

1115
00:52:09,337 --> 00:52:12,756
We're buying sometimes 20%
of all the movie tickets

1116
00:52:12,757 --> 00:52:14,758
in the United States.

1117
00:52:14,759 --> 00:52:19,430
<i>The media was trying to
grok the economics of this.</i>

1118
00:52:19,431 --> 00:52:21,932
All they could see
was an inherent loss

1119
00:52:21,933 --> 00:52:23,475
with every transaction.

1120
00:52:23,476 --> 00:52:25,602
<i>You have everybody all
over the industry saying,</i>

1121
00:52:25,603 --> 00:52:27,438
<i>your business
model doesn't work.</i>

1122
00:52:27,439 --> 00:52:28,356
<i>Correct.</i>

1123
00:52:28,357 --> 00:52:31,233
So why does it work?

1124
00:52:31,234 --> 00:52:32,901
Oh, you want me to explain?

1125
00:52:32,902 --> 00:52:34,570
Why the business
model does work, yeah.

1126
00:52:34,571 --> 00:52:36,780
It had a disconnect
on how that data

1127
00:52:36,781 --> 00:52:39,992
would be used downstream to
really bring in the revenue.

1128
00:52:39,993 --> 00:52:42,494
We have figured out
a way to give people

1129
00:52:42,495 --> 00:52:45,998
a deal they cannot believe
we can even afford to give.

1130
00:52:45,999 --> 00:52:49,752
- Yeah, 'cause you lose money.
- Yeah... No, we actually don't.

1131
00:52:49,753 --> 00:52:51,463
How do you not lose money?

1132
00:52:53,715 --> 00:52:57,217
I was really... I was a
believer in the mission.

1133
00:52:57,218 --> 00:52:59,887
I believed in the vision.

1134
00:52:59,888 --> 00:53:01,430
You know, you invented this...

1135
00:53:01,431 --> 00:53:06,226
<i>Mitch and Ted were doing a
lot of TV-show interviews.</i>

1136
00:53:06,227 --> 00:53:07,644
<i>And I felt like...</i>

1137
00:53:07,645 --> 00:53:11,774
<i>you know how sometimes
somebody is trying to...</i>

1138
00:53:11,775 --> 00:53:14,777
prove that they're confident?

1139
00:53:14,778 --> 00:53:17,571
I almost kind of was
like, okay, go ahead.

1140
00:53:17,572 --> 00:53:18,655
Feel yourself.

1141
00:53:18,656 --> 00:53:20,407
You're the chairman
of MoviePass.

1142
00:53:20,408 --> 00:53:21,700
It's an enormously huge idea.

1143
00:53:21,701 --> 00:53:24,161
Any movie, any theater,
any day... that was me.

1144
00:53:24,162 --> 00:53:26,247
That's what I created.

1145
00:53:31,628 --> 00:53:34,506
<i>We were at Sundance
Film Festival.</i>

1146
00:53:35,757 --> 00:53:37,341
<i>Ted became enamored</i>

1147
00:53:37,342 --> 00:53:40,594
<i>by this whole business
of entertainment.</i>

1148
00:53:40,595 --> 00:53:44,848
<i>Khalid introduced him
to a number of people</i>

1149
00:53:44,849 --> 00:53:47,017
<i>and the potential</i>

1150
00:53:47,018 --> 00:53:50,729
<i>between MoviePass
and filmmaking.</i>

1151
00:53:50,730 --> 00:53:52,648
<i>They rented probably...</i>

1152
00:53:52,649 --> 00:53:55,902
it had to be a $50
million mansion.

1153
00:53:57,320 --> 00:54:00,572
<i>Everybody was wilin' out,
dancin', celebratin',</i>

1154
00:54:00,573 --> 00:54:03,409
<i>and just really kissing
the ass of everybody</i>

1155
00:54:03,410 --> 00:54:05,369
<i>that worked at MoviePass,</i>

1156
00:54:05,370 --> 00:54:08,080
<i>because they all
assumed, like I did,</i>

1157
00:54:08,081 --> 00:54:09,707
that they were just
the next big thing.

1158
00:54:09,708 --> 00:54:12,084
Like, they were the ones
to get involved with.

1159
00:54:12,085 --> 00:54:14,712
After they made such
a name for themself,

1160
00:54:14,713 --> 00:54:18,008
everything was possible at
that point... everything.

1161
00:54:28,184 --> 00:54:30,269
I had heard a little
bit about MoviePass

1162
00:54:30,270 --> 00:54:31,937
within the past couple
months just on media,

1163
00:54:31,938 --> 00:54:34,023
whatever it may have been.

1164
00:54:34,024 --> 00:54:38,360
<i>I was fully engulfed in my
social-media influencing.</i>

1165
00:54:38,361 --> 00:54:42,531
And Bob Ellis had called me
basically out of the blue.

1166
00:54:42,532 --> 00:54:44,742
<i>I'm doing this event
with MoviePass.</i>

1167
00:54:44,743 --> 00:54:47,745
<i>We need you. We want
you to do merchandise.</i>

1168
00:54:47,746 --> 00:54:50,289
<i>You're going to fly in. We
have VIP tickets for you.</i>

1169
00:54:50,290 --> 00:54:51,623
<i>You're going to
go to this party,</i>

1170
00:54:51,624 --> 00:54:53,459
<i>and then you're also
going to go to Coachella.</i>

1171
00:54:53,460 --> 00:54:55,962
It was three days
prior to the event.

1172
00:55:01,092 --> 00:55:02,801
<i>And Dennis Rodman showed up.</i>

1173
00:55:02,802 --> 00:55:05,429
<i>I didn't know who
Dennis Rodman was.</i>

1174
00:55:05,430 --> 00:55:08,600
<i>He's tall. I'm short.
This is hilarious.</i>

1175
00:55:11,853 --> 00:55:14,521
<i>I saw Dennis Rodman</i>

1176
00:55:14,522 --> 00:55:17,859
getting out of the MoviePass
helicopter on Instagram.

1177
00:55:18,818 --> 00:55:21,195
It is dry as a
motherfucker, all right?

1178
00:55:21,196 --> 00:55:23,113
<i>And he was walking all around,</i>

1179
00:55:23,114 --> 00:55:25,574
<i>telling people about MoviePass.</i>

1180
00:55:25,575 --> 00:55:27,910
We were just all like, what?

1181
00:55:27,911 --> 00:55:29,620
$20 million, what
they're spending here.

1182
00:55:29,621 --> 00:55:31,288
<i>I don't even know
what they were doing,</i>

1183
00:55:31,289 --> 00:55:32,706
but what I was told was,

1184
00:55:32,707 --> 00:55:34,625
make Dennis Rodman
wear this merchandise.

1185
00:55:34,626 --> 00:55:36,794
Got to thank these
guys here, MoviePass.

1186
00:55:36,795 --> 00:55:40,464
For Coachella, it
was Khalid thinking,

1187
00:55:40,465 --> 00:55:42,591
this is a great way to
get our name out there.

1188
00:55:42,592 --> 00:55:44,968
The entire Coachella
thing was just weird.

1189
00:55:44,969 --> 00:55:48,389
I mean, what's going on?
Why is this happening?

1190
00:55:48,390 --> 00:55:50,307
It was just kind of
like, what the fuck?

1191
00:55:50,308 --> 00:55:52,476
Where did we get money for that?

1192
00:55:52,477 --> 00:55:57,147
<i>Ted and his crew did
like to post pictures</i>

1193
00:55:57,148 --> 00:55:58,733
of them having a good time.

1194
00:56:02,028 --> 00:56:05,114
I don't understand why
we were even at Coachella

1195
00:56:05,115 --> 00:56:07,826
as a movie company.

1196
00:56:09,077 --> 00:56:11,787
<i>Staff on Ted's side...</i>

1197
00:56:11,788 --> 00:56:14,456
<i>they're really
enjoying the ride.</i>

1198
00:56:14,457 --> 00:56:18,002
And people were
back at the office

1199
00:56:18,003 --> 00:56:20,546
trying to figure out
customer-service issues

1200
00:56:20,547 --> 00:56:22,799
or why somebody
wouldn't get their card.

1201
00:56:24,342 --> 00:56:26,218
<i>At the time, it was
super backed up.</i>

1202
00:56:26,219 --> 00:56:28,178
There were hundreds of thousands

1203
00:56:28,179 --> 00:56:29,513
of customer-service tickets

1204
00:56:29,514 --> 00:56:31,515
and, like, seven
people answering them.

1205
00:56:31,516 --> 00:56:34,394
You remember that?
The Coachella party?

1206
00:56:36,771 --> 00:56:39,481
Do you think they invited
us, the customer support,

1207
00:56:39,482 --> 00:56:41,942
or just anyone who wasn't
upper management to Coachella?

1208
00:56:41,943 --> 00:56:43,444
No, they didn't.

1209
00:56:43,445 --> 00:56:46,363
I sensed a resentment

1210
00:56:46,364 --> 00:56:49,324
by the MoviePass employees.

1211
00:56:49,325 --> 00:56:52,202
Each individual has
their various roles,

1212
00:56:52,203 --> 00:56:54,998
and not all roles get to party.

1213
00:56:57,375 --> 00:57:00,419
<i>They had spent over
a million dollars.</i>

1214
00:57:00,420 --> 00:57:03,339
Meanwhile, there
weren't extension cords

1215
00:57:03,340 --> 00:57:05,382
to plug our computers into.

1216
00:57:05,383 --> 00:57:07,384
I still have to go
next door to the bank

1217
00:57:07,385 --> 00:57:09,136
to borrow pens or
whatever, you know?

1218
00:57:09,137 --> 00:57:10,888
Like, it was insane.

1219
00:57:10,889 --> 00:57:14,558
<i>Mitch and Ted started
to develop plans.</i>

1220
00:57:14,559 --> 00:57:17,936
Some of them were logical,

1221
00:57:17,937 --> 00:57:21,607
in that they wanted to
promote the service,

1222
00:57:21,608 --> 00:57:24,860
but they became
illogical and irrational

1223
00:57:24,861 --> 00:57:27,404
as it relates to
the way the business

1224
00:57:27,405 --> 00:57:29,365
was going to finance itself.

1225
00:57:29,366 --> 00:57:32,576
And that's the thing
that became very tricky.

1226
00:57:32,577 --> 00:57:35,579
<i>Ted became all
excited, telling me,</i>

1227
00:57:35,580 --> 00:57:37,289
<i>hey, we're going
to do this film.</i>

1228
00:57:37,290 --> 00:57:39,291
<i>John Travolta is attached to it.</i>

1229
00:57:39,292 --> 00:57:41,377
And Ted said, yeah,
and I'm going to put

1230
00:57:41,378 --> 00:57:43,212
your name on as a producer.

1231
00:57:43,213 --> 00:57:45,589
And, okay.

1232
00:57:45,590 --> 00:57:49,635
<i>For me, it was just a
film that made sense</i>

1233
00:57:49,636 --> 00:57:52,514
that we could promote
and earn money from.

1234
00:57:54,641 --> 00:57:56,141
Let me tell you something.

1235
00:57:56,142 --> 00:57:57,893
<i>"Gotti" opening weekend...</i>

1236
00:57:57,894 --> 00:58:01,355
<i>it's got the dreaded 0%
Rotten Tomatoes score.</i>

1237
00:58:01,356 --> 00:58:03,273
<i>Not a single person
who reviewed it</i>

1238
00:58:03,274 --> 00:58:04,900
<i>gave it a positive score.</i>

1239
00:58:04,901 --> 00:58:07,277
- That's a goddamn lie!
- Order!

1240
00:58:07,278 --> 00:58:10,614
Gotti, they're
lying! She's lying!

1241
00:58:10,615 --> 00:58:12,449
<i>There were, like, these
weird, little, like,</i>

1242
00:58:12,450 --> 00:58:13,784
<i>cockamamie schemes,</i>

1243
00:58:13,785 --> 00:58:16,328
<i>where they thought, oh,
we can generate money.</i>

1244
00:58:16,329 --> 00:58:18,080
And I don't think
anybody could figure out

1245
00:58:18,081 --> 00:58:21,667
how this was supposed to
work, this $9 a month.

1246
00:58:21,668 --> 00:58:23,627
People were asking me, how
do you think it worked?

1247
00:58:23,628 --> 00:58:27,047
Like, you know, what's
the Coke secret formula?

1248
00:58:27,048 --> 00:58:30,676
And I was like, I don't know...
something with concessions?

1249
00:58:30,677 --> 00:58:33,805
That's the only thing
that I could think of.

1250
00:58:36,558 --> 00:58:38,434
<i>The first MoviePass
story I wrote</i>

1251
00:58:38,435 --> 00:58:39,935
<i>that was of major significance</i>

1252
00:58:39,936 --> 00:58:42,272
was when they had
their 10-K filing.

1253
00:58:45,108 --> 00:58:48,444
<i>Because MoviePass's parent
company, Helios and Matheson,</i>

1254
00:58:48,445 --> 00:58:50,779
was a publicly traded company,

1255
00:58:50,780 --> 00:58:55,159
they have to file things
that you can see publicly.

1256
00:58:55,160 --> 00:58:57,202
<i>They had their 10-K filing...</i>

1257
00:58:57,203 --> 00:58:59,621
<i>when a company needs to
kind of, like, assess</i>

1258
00:58:59,622 --> 00:59:01,498
<i>where they're going.</i>

1259
00:59:01,499 --> 00:59:04,376
<i>It revealed that in 2017,</i>

1260
00:59:04,377 --> 00:59:09,173
<i>they lost, like,
over $150 million.</i>

1261
00:59:09,174 --> 00:59:11,258
<i>When I was CEO,</i>

1262
00:59:11,259 --> 00:59:14,261
<i>we lost around $200,000 a month.</i>

1263
00:59:14,262 --> 00:59:15,846
When they were
running the company,

1264
00:59:15,847 --> 00:59:17,765
they lost $30 million a month.

1265
00:59:17,766 --> 00:59:20,142
I wish we had access
to those reports

1266
00:59:20,143 --> 00:59:21,727
before they went out...

1267
00:59:21,728 --> 00:59:24,521
<i>when the 10-K was released</i>

1268
00:59:24,522 --> 00:59:26,106
<i>and they were seeing</i>

1269
00:59:26,107 --> 00:59:27,524
<i>this hemorrhage.</i>

1270
00:59:27,525 --> 00:59:29,526
I primarily invest
in small companies

1271
00:59:29,527 --> 00:59:31,528
and help build businesses
as a venture capitalist.

1272
00:59:31,529 --> 00:59:35,366
If you read the 10-K
of this company...

1273
00:59:35,367 --> 00:59:37,409
which I did,

1274
00:59:37,410 --> 00:59:40,621
it is an endless list of...

1275
00:59:40,622 --> 00:59:43,415
oh, my God, what
is happening here?

1276
00:59:43,416 --> 00:59:44,708
There wasn't any sense

1277
00:59:44,709 --> 00:59:46,752
that the financial
situation would improve.

1278
00:59:46,753 --> 00:59:48,837
And that would mean they
would just keep having

1279
00:59:48,838 --> 00:59:50,756
to go out and find
hundreds and hundreds

1280
00:59:50,757 --> 00:59:52,549
<i>of millions of dollars</i>

1281
00:59:52,550 --> 00:59:56,053
<i>to continue to
float their company.</i>

1282
00:59:56,054 --> 00:59:58,555
The investors started
getting nervous.

1283
00:59:58,556 --> 01:00:02,101
<i>All they saw was money
going out the door...</i>

1284
01:00:02,102 --> 01:00:03,394
millions every month.

1285
01:00:03,395 --> 01:00:05,814
<i>Their stock plummeted.</i>

1286
01:00:07,607 --> 01:00:11,360
<i>Me writing about that
really set things going</i>

1287
01:00:11,361 --> 01:00:14,738
of people realizing that
maybe things aren't going

1288
01:00:14,739 --> 01:00:17,659
as well at MoviePass
as many of us thought.

1289
01:00:20,245 --> 01:00:24,498
<i>One day, I was just
googling Ted Farnsworth.</i>

1290
01:00:24,499 --> 01:00:26,083
What you're about to learn today

1291
01:00:26,084 --> 01:00:27,876
is how you can travel
around the world

1292
01:00:27,877 --> 01:00:29,420
for pennies on the dollar...

1293
01:00:29,421 --> 01:00:31,338
<i>I was really down a rabbit hole,</i>

1294
01:00:31,339 --> 01:00:33,757
<i>looking at videos I've seen of
him from a lot of companies.</i>

1295
01:00:33,758 --> 01:00:36,385
Ready to go, lock in
your freedom, lock in...

1296
01:00:36,386 --> 01:00:38,846
And I kept seeing these articles

1297
01:00:38,847 --> 01:00:41,265
<i>all built around
a defense of Ted.</i>

1298
01:00:41,266 --> 01:00:43,434
<i>"Ted Farnsworth may
seem like a scam artist,</i>

1299
01:00:43,435 --> 01:00:44,643
<i>but he's actually not."</i>

1300
01:00:44,644 --> 01:00:46,103
<i>"Anyone can say
he's a scam artist,</i>

1301
01:00:46,104 --> 01:00:48,772
<i>but he's really, like,
a great businessman."</i>

1302
01:00:48,773 --> 01:00:51,233
<i>They were all using
similar language.</i>

1303
01:00:51,234 --> 01:00:53,110
And I was just struck by,

1304
01:00:53,111 --> 01:00:55,487
God, like, someone's got
to be paying for these.

1305
01:00:55,488 --> 01:00:58,949
Like, this is such a
ham-fisted strategy

1306
01:00:58,950 --> 01:01:02,953
to try to improve
your public image.

1307
01:01:02,954 --> 01:01:05,372
<i>I mean, he doesn't
necessarily come across</i>

1308
01:01:05,373 --> 01:01:08,000
as a very...

1309
01:01:08,001 --> 01:01:11,128
I should say, traditionally
sophisticated businessperson.

1310
01:01:11,129 --> 01:01:12,963
You're making money
while you're sleeping.

1311
01:01:12,964 --> 01:01:14,631
I always tell people
when they sit there

1312
01:01:14,632 --> 01:01:16,091
and they're having
lunch with somebody,

1313
01:01:16,092 --> 01:01:17,885
they could be saying, I'm
making money right now.

1314
01:01:17,886 --> 01:01:21,597
<i>He's gotten into the
energy-drink game,</i>

1315
01:01:21,598 --> 01:01:22,973
the farming game.

1316
01:01:22,974 --> 01:01:25,517
Hello, I'm Latoya Jackson.

1317
01:01:25,518 --> 01:01:27,811
If you have any questions
about your future,

1318
01:01:27,812 --> 01:01:30,856
now you can call your own
personal psychic anytime.

1319
01:01:30,857 --> 01:01:35,235
<i>Starting a psychic hotline
with Latoya Jackson.</i>

1320
01:01:35,236 --> 01:01:36,695
He's a chameleon.

1321
01:01:36,696 --> 01:01:39,531
I do want to ask about
how your biometrics works.

1322
01:01:39,532 --> 01:01:41,241
So it's three points of the face

1323
01:01:41,242 --> 01:01:42,618
and a mathematical formula.

1324
01:01:42,619 --> 01:01:44,703
That's really the
big differentiation

1325
01:01:44,704 --> 01:01:47,081
between us and any other
facial-recognition company

1326
01:01:47,082 --> 01:01:48,123
out there.

1327
01:01:48,124 --> 01:01:51,752
<i>Suddenly, he was a movie exec.</i>

1328
01:01:51,753 --> 01:01:54,755
I just was baffled.

1329
01:01:54,756 --> 01:01:57,633
<i>Who is Ted Farnsworth?</i>

1330
01:01:57,634 --> 01:02:00,761
Ted never shared his
master plan with me,

1331
01:02:00,762 --> 01:02:02,888
but every single Monday,

1332
01:02:02,889 --> 01:02:06,266
we needed more money
than the previous week.

1333
01:02:06,267 --> 01:02:09,436
And I had no idea how
we were going to get it.

1334
01:02:09,437 --> 01:02:13,190
<i>I would go to Ted and said,
How long can this go on?</i>

1335
01:02:13,191 --> 01:02:17,445
And he said, just keep going,
and the money will come.

1336
01:02:20,865 --> 01:02:23,033
<i>When they were losing
all this money,</i>

1337
01:02:23,034 --> 01:02:26,246
Ted was also trying to
start a plane company.

1338
01:02:29,082 --> 01:02:31,542
We have a hemorrhage going
on in your business model.

1339
01:02:31,543 --> 01:02:34,962
And now John Travolta's plane
has a MoviePass logo on it?

1340
01:02:34,963 --> 01:02:38,090
<i>And he calls it MoviePass Air.</i>

1341
01:02:38,091 --> 01:02:41,385
Yes, it's called MoviePass Air.

1342
01:02:41,386 --> 01:02:44,596
<i>I saw that crazy spending,</i>

1343
01:02:44,597 --> 01:02:46,974
<i>and I was just shaking my head.</i>

1344
01:02:46,975 --> 01:02:49,309
I was just like, oh, gosh.

1345
01:02:49,310 --> 01:02:51,520
Please, like...

1346
01:02:51,521 --> 01:02:54,732
let them know
something I don't know.

1347
01:02:54,733 --> 01:02:56,567
<i>All right, MoviePass
is fucking awesome.</i>

1348
01:02:56,568 --> 01:02:58,570
And welcome 50 fucking Cent!

1349
01:03:00,030 --> 01:03:01,989
<i>Ted just wanted to go to parties</i>

1350
01:03:01,990 --> 01:03:03,115
<i>and hang out with
Hollywood stars.</i>

1351
01:03:03,116 --> 01:03:05,325
Make some noise for 50 Cent!

1352
01:03:05,326 --> 01:03:08,746
Go! Go! Go! Go! Go! Go!

1353
01:03:08,747 --> 01:03:10,122
<i>There was no branding strategy</i>

1354
01:03:10,123 --> 01:03:14,169
for Ted to be involved in
hobnobbing with Hollywood.

1355
01:03:18,506 --> 01:03:21,091
<i>I started getting
reached out from people</i>

1356
01:03:21,092 --> 01:03:23,594
<i>who actually work at MoviePass.</i>

1357
01:03:23,595 --> 01:03:24,928
There were some people

1358
01:03:24,929 --> 01:03:27,098
that would send me
recordings of meetings.

1359
01:03:41,154 --> 01:03:43,197
<i>We would have big meetings.</i>

1360
01:03:43,198 --> 01:03:45,699
I remember Mitch telling
us, everything's great.

1361
01:03:45,700 --> 01:03:46,992
Everything's great.

1362
01:03:46,993 --> 01:03:49,245
You know, everything's
going to plan.

1363
01:03:54,668 --> 01:03:57,920
I was focused on
trying to save it,

1364
01:03:57,921 --> 01:04:02,132
trying to find some
solution, a different model.

1365
01:04:02,133 --> 01:04:04,176
In an attempt to
stop the money loss,

1366
01:04:04,177 --> 01:04:07,346
MoviePass was changing their
terms of service daily.

1367
01:04:07,347 --> 01:04:08,722
<i>Changes continue</i>

1368
01:04:08,723 --> 01:04:10,307
<i>for the troubled
film-subscription service.</i>

1369
01:04:10,308 --> 01:04:11,642
<i>MoviePass announcing
more changes.</i>

1370
01:04:11,643 --> 01:04:14,645
The subscription-based company
will now only allow users

1371
01:04:14,646 --> 01:04:16,772
to choose from six movies a day

1372
01:04:16,773 --> 01:04:18,857
<i>and see a total of
three movies per month.</i>

1373
01:04:18,858 --> 01:04:20,818
You can't use it on
Memorial Day Weekend,

1374
01:04:20,819 --> 01:04:22,903
but you can use it during
these windows here.

1375
01:04:22,904 --> 01:04:24,321
A little shady.

1376
01:04:24,322 --> 01:04:26,990
A lot of people are probably
not happy about this.

1377
01:04:26,991 --> 01:04:29,993
<i>We implemented a
ticket-verification thing.</i>

1378
01:04:29,994 --> 01:04:31,286
<i>Next time you go into the app,</i>

1379
01:04:31,287 --> 01:04:33,163
<i>if you want to see another one,</i>

1380
01:04:33,164 --> 01:04:35,082
<i>you have to upload the
stub, take a picture of it.</i>

1381
01:04:35,083 --> 01:04:38,293
We were trying to find out
ways to not bleed out cash.

1382
01:04:38,294 --> 01:04:40,462
The type of images people
were supposed to send

1383
01:04:40,463 --> 01:04:44,174
<i>were their actual
ticket stubs, but...</i>

1384
01:04:44,175 --> 01:04:46,468
I've definitely sent
MoviePass a picture

1385
01:04:46,469 --> 01:04:48,429
of my middle finger before.

1386
01:04:48,430 --> 01:04:51,974
It became clear that
we were not able

1387
01:04:51,975 --> 01:04:54,309
to provide any
solutions to people

1388
01:04:54,310 --> 01:04:57,730
with the state of
the app as it was.

1389
01:04:57,731 --> 01:05:00,190
It simply was not working.

1390
01:05:00,191 --> 01:05:02,901
So there was very little that
we could do to help people,

1391
01:05:02,902 --> 01:05:05,404
which is really frustrating
when that's your job.

1392
01:05:05,405 --> 01:05:08,574
It just felt like chaos.

1393
01:05:08,575 --> 01:05:11,076
Summer of 2018
was when MoviePass

1394
01:05:11,077 --> 01:05:12,953
<i>started to really
hit a fever pitch</i>

1395
01:05:12,954 --> 01:05:14,956
<i>in terms of popularity.</i>

1396
01:05:21,921 --> 01:05:23,797
<i>That "Mission:
Impossible" film...</i>

1397
01:05:23,798 --> 01:05:26,008
I remember it being promoted,

1398
01:05:26,009 --> 01:05:29,386
or they had emails actually
encouraging members to go.

1399
01:05:29,387 --> 01:05:31,305
When "Mission: Impossible...
Fallout" came out,

1400
01:05:31,306 --> 01:05:33,432
we started hearing
from customers

1401
01:05:33,433 --> 01:05:36,727
<i>that the service was
not working at all.</i>

1402
01:05:36,728 --> 01:05:38,687
I've ruined your day, haven't I?

1403
01:05:38,688 --> 01:05:41,023
When I check the
MoviePass today,

1404
01:05:41,024 --> 01:05:43,317
let me show you guys what I see.

1405
01:05:43,318 --> 01:05:45,444
"Mission:
Impossible... Fallout,"

1406
01:05:45,445 --> 01:05:46,737
I haven't seen that.

1407
01:05:46,738 --> 01:05:48,781
<i>There were already signs</i>

1408
01:05:48,782 --> 01:05:51,241
<i>that there were some
technical issues</i>

1409
01:05:51,242 --> 01:05:54,119
with being able to
fulfill the promise

1410
01:05:54,120 --> 01:05:55,913
<i>that MoviePass had.</i>

1411
01:05:55,914 --> 01:05:59,208
But I noticed with
"Mission: Impossible,"

1412
01:05:59,209 --> 01:06:01,251
it felt like a national issue.

1413
01:06:01,252 --> 01:06:04,421
It's just the discussion
surrounding that movie,

1414
01:06:04,422 --> 01:06:06,800
I recall, was vitriolic.

1415
01:06:08,593 --> 01:06:10,678
We're right here at this
theater, right here,

1416
01:06:10,679 --> 01:06:13,472
and they just opened... no
screenings at this theater.

1417
01:06:13,473 --> 01:06:15,766
I might as well start
a fire and try and send

1418
01:06:15,767 --> 01:06:17,142
customer service smoke signals.

1419
01:06:17,143 --> 01:06:19,520
They're more likely to
answer that than their phone

1420
01:06:19,521 --> 01:06:21,563
or the email that I sent.

1421
01:06:21,564 --> 01:06:23,273
<i>We did get a lot of
hate mail, I remember.</i>

1422
01:06:23,274 --> 01:06:24,942
We had stacks of hate mail.

1423
01:06:24,943 --> 01:06:26,985
It got so bad that, apparently,

1424
01:06:26,986 --> 01:06:31,365
a customer literally sent a
box of shit to the office.

1425
01:06:31,366 --> 01:06:32,449
I get it.

1426
01:06:32,450 --> 01:06:34,785
Like, I mean, I wouldn't
send no shit to a company

1427
01:06:34,786 --> 01:06:36,578
if they were doing
me wrong, but...

1428
01:06:36,579 --> 01:06:37,663
wow.

1429
01:06:37,664 --> 01:06:40,791
A lot of these things were
during a period of time

1430
01:06:40,792 --> 01:06:42,292
that I was...

1431
01:06:42,293 --> 01:06:44,628
You know, I was in the
middle of a divorce

1432
01:06:44,629 --> 01:06:48,799
after 40 years of being
with my former wife.

1433
01:06:48,800 --> 01:06:50,801
I was totally distracted.

1434
01:06:50,802 --> 01:06:55,264
So, without a specific
amount of time,

1435
01:06:55,265 --> 01:06:58,392
I just thought, you know,
this would be a good time

1436
01:06:58,393 --> 01:07:03,355
<i>for me to take off and
let Khalid take over.</i>

1437
01:07:03,356 --> 01:07:05,983
<i>Mitch was still CEO, but
Khalid Itum was running</i>

1438
01:07:05,984 --> 01:07:08,153
<i>the day-to-day operations.</i>

1439
01:07:14,159 --> 01:07:17,078
I'm sure you're aware
of Khalid, right?

1440
01:07:24,836 --> 01:07:26,837
You know, honestly, I don't
even remember his role.

1441
01:07:26,838 --> 01:07:28,339
I just know he
went from one role,

1442
01:07:28,340 --> 01:07:29,548
and then next thing you know,

1443
01:07:29,549 --> 01:07:31,675
he was senior vice
president of that role.

1444
01:07:31,676 --> 01:07:33,052
And then next thing you know,

1445
01:07:33,053 --> 01:07:35,096
he was, like, pretty
much running the show.

1446
01:07:36,431 --> 01:07:38,265
<i>While Mitch took off to Mexico</i>

1447
01:07:38,266 --> 01:07:39,975
<i>in the wake of his divorce,</i>

1448
01:07:39,976 --> 01:07:41,519
Ted is living his best life.

1449
01:07:47,984 --> 01:07:52,029
<i>There was a picture
on my manager's IG</i>

1450
01:07:52,030 --> 01:07:54,574
<i>of them partying
it up on a yacht.</i>

1451
01:07:58,036 --> 01:08:00,496
And then he put this
picture on private.

1452
01:08:00,497 --> 01:08:02,623
I'm like, it's too late.

1453
01:08:02,624 --> 01:08:06,335
<i>People within the company
were beginning to realize,</i>

1454
01:08:06,336 --> 01:08:08,256
there was not going to be
a happy ending to this.

1455
01:08:10,006 --> 01:08:12,216
<i>It's like that
moment in "Titanic"</i>

1456
01:08:12,217 --> 01:08:15,552
<i>when the band is
still on the boat</i>

1457
01:08:15,553 --> 01:08:19,223
<i>while it's going down, but
they won't leave the ship.</i>

1458
01:08:19,224 --> 01:08:21,016
<i>Shares of Helios and Matheson</i>

1459
01:08:21,017 --> 01:08:24,228
<i>have plunged 90%
so far this year.</i>

1460
01:08:24,229 --> 01:08:26,146
<i>Shares peaked at the equivalent</i>

1461
01:08:26,147 --> 01:08:29,274
<i>of more than $8,000 a share.</i>

1462
01:08:29,275 --> 01:08:32,319
<i>Right now it's trading
between one and two cents.</i>

1463
01:08:32,320 --> 01:08:34,196
I desperately went
to Ted and said,

1464
01:08:34,197 --> 01:08:37,700
we need a minimum of $5 million.

1465
01:08:37,701 --> 01:08:40,787
<i>Ted said, I'm sorry, we
can't come up with the money.</i>

1466
01:08:45,250 --> 01:08:47,710
<i>Well, subscription
movie-ticket company MoviePass</i>

1467
01:08:47,711 --> 01:08:50,754
<i>announcing it will shut down.</i>

1468
01:08:50,755 --> 01:08:53,882
It was a bit of a bummer
that this good thing

1469
01:08:53,883 --> 01:08:55,426
had to come to an end

1470
01:08:55,427 --> 01:08:58,722
for everybody that
really saw the vision.

1471
01:09:01,099 --> 01:09:03,892
<i>Eventually both
HMNY and MoviePass</i>

1472
01:09:03,893 --> 01:09:06,478
<i>declared bankruptcy.</i>

1473
01:09:06,479 --> 01:09:08,856
It took Stacy over a
decade to create MoviePass

1474
01:09:08,857 --> 01:09:10,232
<i>and less than a year</i>

1475
01:09:10,233 --> 01:09:12,736
<i>for Mitch and Ted to
drive it into the ground.</i>

1476
01:09:15,613 --> 01:09:16,990
Ah...

1477
01:09:19,701 --> 01:09:22,369
I think the hardest part...

1478
01:09:22,370 --> 01:09:25,831
I think if we had failed...

1479
01:09:25,832 --> 01:09:29,793
and I use the collective
"we" of the MoviePass team

1480
01:09:29,794 --> 01:09:31,587
We tried a product,

1481
01:09:31,588 --> 01:09:34,256
it didn't succeed in the market,

1482
01:09:34,257 --> 01:09:36,967
and we just failed.

1483
01:09:36,968 --> 01:09:39,053
I think I could have
lived with that.

1484
01:09:39,054 --> 01:09:42,056
But what was hard about
what had happened was,

1485
01:09:42,057 --> 01:09:44,016
we had succeeded.

1486
01:09:44,017 --> 01:09:46,310
We had built a brand over years.

1487
01:09:46,311 --> 01:09:49,313
The brand had enormous
value in the marketplace.

1488
01:09:49,314 --> 01:09:51,565
We were disrupting
the movie industry.

1489
01:09:51,566 --> 01:09:55,277
We were changing
everything, and it worked.

1490
01:09:55,278 --> 01:09:58,489
And that made it harder.

1491
01:09:58,490 --> 01:10:01,826
But I think losing
all that money was...

1492
01:10:03,119 --> 01:10:06,330
It's very disappointing.

1493
01:10:06,331 --> 01:10:09,625
You work more than a
decade on something.

1494
01:10:09,626 --> 01:10:13,337
You summit Everest.
You literally make it.

1495
01:10:13,338 --> 01:10:17,341
And then it's gone
within the amount of time

1496
01:10:17,342 --> 01:10:20,594
that you as a founder
can't sell your stock.

1497
01:10:20,595 --> 01:10:22,346
It just vanished.

1498
01:10:22,347 --> 01:10:25,224
<i>By the time MoviePass
was no more,</i>

1499
01:10:25,225 --> 01:10:27,726
<i>the stock value,
around $80 million,</i>

1500
01:10:27,727 --> 01:10:31,355
<i>that Hamet and I had
was worth pennies.</i>

1501
01:10:31,356 --> 01:10:33,107
It's a pain to have to explain

1502
01:10:33,108 --> 01:10:34,358
the MoviePass situation,

1503
01:10:34,359 --> 01:10:36,193
'cause when it was
in the news, like,

1504
01:10:36,194 --> 01:10:37,695
I had to explain
that to everyone

1505
01:10:37,696 --> 01:10:39,822
that I interacted with
on the business side,

1506
01:10:39,823 --> 01:10:41,782
and that's not fun.

1507
01:10:41,783 --> 01:10:43,867
And the only thing I
could say is, like, look,

1508
01:10:43,868 --> 01:10:45,619
we exited the business,

1509
01:10:45,620 --> 01:10:49,581
and the new team took it
in a direction that...

1510
01:10:49,582 --> 01:10:51,417
took it in various
directions, right?

1511
01:10:51,418 --> 01:10:54,211
I had to be fairly
neutral around that.

1512
01:10:54,212 --> 01:10:56,088
<i>I was not talking to Ted at all.</i>

1513
01:10:56,089 --> 01:10:58,757
<i>I knew from the beginning
that Ted and I did not have</i>

1514
01:10:58,758 --> 01:11:00,134
<i>the same values,</i>

1515
01:11:00,135 --> 01:11:02,219
but Mitch did say, I apologize.

1516
01:11:02,220 --> 01:11:05,931
Like, I remember
him apologizing...

1517
01:11:05,932 --> 01:11:08,183
which I was glad he did,

1518
01:11:08,184 --> 01:11:11,437
but it didn't solve the pain.

1519
01:11:11,438 --> 01:11:14,314
It was 10 years after
we launched Netflix

1520
01:11:14,315 --> 01:11:16,150
that streaming first began.

1521
01:11:16,151 --> 01:11:18,527
<i>Mitch loves to pump up himself</i>

1522
01:11:18,528 --> 01:11:20,571
<i>as this great disruptor,</i>

1523
01:11:20,572 --> 01:11:23,282
but it was clear for people
who worked at MoviePass

1524
01:11:23,283 --> 01:11:25,200
that this guy was
not the answer.

1525
01:11:25,201 --> 01:11:27,161
Mitch's history, as
I found out more,

1526
01:11:27,162 --> 01:11:29,288
was spottier than he
would have represented.

1527
01:11:29,289 --> 01:11:31,290
He would tell us how he
was one of the founders

1528
01:11:31,291 --> 01:11:32,499
of Netflix.

1529
01:11:32,500 --> 01:11:35,169
Mitch was not a
co-founder of Netflix.

1530
01:11:35,170 --> 01:11:38,047
Mitch Lowe, in the
early days of Netflix,

1531
01:11:38,048 --> 01:11:40,758
was someone who was
able to provide them

1532
01:11:40,759 --> 01:11:45,262
with loads and loads
of disks, of DVDs.

1533
01:11:45,263 --> 01:11:47,264
When Mitch came on board,

1534
01:11:47,265 --> 01:11:50,059
he had some very strong opinions

1535
01:11:50,060 --> 01:11:53,937
and had a very...

1536
01:11:53,938 --> 01:11:57,399
non-Netflix, non-Netflix-y
way of approaching it.

1537
01:11:57,400 --> 01:12:00,110
<i>Mitch and I got to a
point where he told me</i>

1538
01:12:00,111 --> 01:12:01,445
<i>that he was going to quit</i>

1539
01:12:01,446 --> 01:12:03,781
if I didn't take
Ted's financing deal.

1540
01:12:03,782 --> 01:12:04,948
And I ultimately said,

1541
01:12:04,949 --> 01:12:06,742
well, I don't want to
run the company, I can't.

1542
01:12:06,743 --> 01:12:08,327
I've got other things
to do right now.

1543
01:12:08,328 --> 01:12:09,953
So I guess we're
going to do this.

1544
01:12:09,954 --> 01:12:12,373
<i>You know, and that was
the beginning of the end</i>

1545
01:12:12,374 --> 01:12:13,917
<i>in some ways.</i>

1546
01:12:27,097 --> 01:12:28,847
<i>I got a voice mail</i>

1547
01:12:28,848 --> 01:12:32,810
from someone who said
they were from the FBI.

1548
01:12:32,811 --> 01:12:35,479
<i>And I ended up doing
an interview with them</i>

1549
01:12:35,480 --> 01:12:38,399
<i>regarding investigations
that they were doing</i>

1550
01:12:38,400 --> 01:12:41,736
<i>on MoviePass and HMNY.</i>

1551
01:12:43,071 --> 01:12:46,323
<i>I was talking to the
Attorney General's Office,</i>

1552
01:12:46,324 --> 01:12:48,992
<i>the FBI, and the FTC.</i>

1553
01:12:48,993 --> 01:12:51,328
<i>It was quite nerve-racking.</i>

1554
01:12:51,329 --> 01:12:54,832
<i>I've never seen or done
anything like that.</i>

1555
01:12:54,833 --> 01:12:58,168
<i>The FTC was investigating
allegations of fraud</i>

1556
01:12:58,169 --> 01:12:59,837
<i>by MoviePass against customers.</i>

1557
01:12:59,838 --> 01:13:02,506
<i>The deeper you got in,
the more you realized</i>

1558
01:13:02,507 --> 01:13:05,300
all the shady dealings
that were going on.

1559
01:13:05,301 --> 01:13:07,511
Mr. Farnsworth and Mr. Lowe

1560
01:13:07,512 --> 01:13:09,471
got themselves into
a real predicament.

1561
01:13:09,472 --> 01:13:12,016
<i>What I heard was that Mitch Lowe</i>

1562
01:13:12,017 --> 01:13:14,309
<i>told his tech team</i>

1563
01:13:14,310 --> 01:13:17,731
to block people
from using the app.

1564
01:13:19,190 --> 01:13:22,860
The subscriber didn't know
the rules had changed,

1565
01:13:22,861 --> 01:13:24,695
and that was unfair.

1566
01:13:24,696 --> 01:13:27,781
<i>I understand needing
to get costs down,</i>

1567
01:13:27,782 --> 01:13:30,325
but that's not the way to do it.

1568
01:13:30,326 --> 01:13:31,910
I think there was a time

1569
01:13:31,911 --> 01:13:34,955
where MoviePass was
struggling financially,

1570
01:13:34,956 --> 01:13:38,000
where they started to do
some very questionable things

1571
01:13:38,001 --> 01:13:41,378
around...

1572
01:13:41,379 --> 01:13:43,714
turning people's cards
off and things like that.

1573
01:13:43,715 --> 01:13:47,468
No one ever made the
cards not work...

1574
01:13:47,469 --> 01:13:50,554
never, never, ever, ever.

1575
01:13:50,555 --> 01:13:55,434
We did do some things
to attack fraud

1576
01:13:55,435 --> 01:13:58,479
that we believed was happening.

1577
01:13:58,480 --> 01:14:00,230
Had a lot of people
that were abusing

1578
01:14:00,231 --> 01:14:01,732
the terms and
conditions early on,

1579
01:14:01,733 --> 01:14:04,318
so we slowed down and
slowed down the growth.

1580
01:14:04,319 --> 01:14:06,570
A company can certainly
implement procedures

1581
01:14:06,571 --> 01:14:08,739
to make sure there's
no fraud going on,

1582
01:14:08,740 --> 01:14:10,491
but that's not what
they were doing here.

1583
01:14:10,492 --> 01:14:11,742
They were hemorrhaging money,

1584
01:14:11,743 --> 01:14:13,702
and they wanted to
stop the frequent users

1585
01:14:13,703 --> 01:14:15,746
from actually using the product.

1586
01:14:15,747 --> 01:14:18,749
<i>We were being told, you know,</i>

1587
01:14:18,750 --> 01:14:21,085
<i>to build roadblocks
to our users.</i>

1588
01:14:21,086 --> 01:14:24,171
<i>That, to us as engineers,
was just not okay.</i>

1589
01:14:24,172 --> 01:14:26,674
For us to do things that
was, like, a little dirty,

1590
01:14:26,675 --> 01:14:28,760
like, didn't seem right.

1591
01:14:46,653 --> 01:14:48,696
<i>As a guy running a business,</i>

1592
01:14:48,697 --> 01:14:52,491
<i>I feel like Mitch was doing
what he had to do to survive.</i>

1593
01:14:52,492 --> 01:14:55,452
He was trying to
lose less money.

1594
01:14:55,453 --> 01:14:57,454
Comically and ironically,

1595
01:14:57,455 --> 01:14:59,456
that meant selling
less of his product.

1596
01:14:59,457 --> 01:15:01,792
Now you've taken someone's money

1597
01:15:01,793 --> 01:15:05,671
for a product that
you're not giving them.

1598
01:15:05,672 --> 01:15:07,339
<i>The first thing that
really jumped at me</i>

1599
01:15:07,340 --> 01:15:09,675
<i>was those internal
documents and emails</i>

1600
01:15:09,676 --> 01:15:12,928
that were basically saying,
hey, should we do this?

1601
01:15:12,929 --> 01:15:16,390
<i>The FTC might come
after us if we do it.</i>

1602
01:15:16,391 --> 01:15:18,475
<i>There seemed to be
almost an awareness</i>

1603
01:15:18,476 --> 01:15:20,978
<i>that, like, the FTC is
going to be very upset</i>

1604
01:15:20,979 --> 01:15:23,105
<i>when they hear about this
and might come knocking,</i>

1605
01:15:23,106 --> 01:15:24,940
<i>and they did it anyway.</i>

1606
01:15:24,941 --> 01:15:26,650
There seemed to be
an aspect of that

1607
01:15:26,651 --> 01:15:28,278
that was almost
sort of cavalier.

1608
01:15:36,077 --> 01:15:37,578
Look, Wall Street
loves this story.

1609
01:15:37,579 --> 01:15:38,662
They love a growth story.

1610
01:15:38,663 --> 01:15:40,330
We got over 3
million subscribers.

1611
01:15:40,331 --> 01:15:41,915
Nobody's even close to us.

1612
01:15:41,916 --> 01:15:43,167
With MoviePass,

1613
01:15:43,168 --> 01:15:46,253
the way they were telling
the story was exciting.

1614
01:15:46,254 --> 01:15:48,505
We're the hottest brand out
there going for the last year.

1615
01:15:48,506 --> 01:15:50,966
And so we're here.

1616
01:15:50,967 --> 01:15:52,634
We're not going to
run out of any cash

1617
01:15:52,635 --> 01:15:54,094
or anything like this.

1618
01:15:54,095 --> 01:15:58,432
I had invested in MoviePass
between $4,000 and $5,000,

1619
01:15:58,433 --> 01:16:01,518
and I chose to invest

1620
01:16:01,519 --> 01:16:03,687
because it felt very disruptive.

1621
01:16:03,688 --> 01:16:05,522
It was exciting.
I pounced on it.

1622
01:16:05,523 --> 01:16:06,857
Our burn now is, like, down

1623
01:16:06,858 --> 01:16:09,068
to approximately
$12 million a month.

1624
01:16:09,069 --> 01:16:12,321
<i>Ted's sitting on TV,
telling everyone,</i>

1625
01:16:12,322 --> 01:16:14,531
this is going to be profitable,

1626
01:16:14,532 --> 01:16:17,201
but you as an outside investor,

1627
01:16:17,202 --> 01:16:18,535
you couldn't disprove it.

1628
01:16:18,536 --> 01:16:19,787
We're the only ones...

1629
01:16:19,788 --> 01:16:21,413
Have you been able to
sell any of the data yet?

1630
01:16:21,414 --> 01:16:23,123
- Oh, yes.
- You have been able...

1631
01:16:23,124 --> 01:16:26,585
Yeah, we've already signed
agreements with studios.

1632
01:16:26,586 --> 01:16:28,253
<i>They were doing a
lot of interviews</i>

1633
01:16:28,254 --> 01:16:32,424
and mentioning the way they
would make up the loss was,

1634
01:16:32,425 --> 01:16:36,220
<i>they were going to
sell people's data.</i>

1635
01:16:36,221 --> 01:16:37,346
That's insane.

1636
01:16:37,347 --> 01:16:38,847
I can sell someone's

1637
01:16:38,848 --> 01:16:41,850
specific data to an advertiser

1638
01:16:41,851 --> 01:16:46,105
for $2 to $4 per 1,000 people.

1639
01:16:46,106 --> 01:16:47,231
I might get 10 bucks.

1640
01:16:47,232 --> 01:16:50,526
<i>And that's per 1,000, which
wasn't going to offset</i>

1641
01:16:50,527 --> 01:16:52,444
the tens of millions of dollars

1642
01:16:52,445 --> 01:16:54,655
that they were losing
on a quarterly basis

1643
01:16:54,656 --> 01:16:55,906
running this business.

1644
01:16:55,907 --> 01:16:57,825
And how much of this
is about the data?

1645
01:16:57,826 --> 01:16:59,576
A huge amount of it is the data.

1646
01:16:59,577 --> 01:17:01,078
<i>The stock price goes up</i>

1647
01:17:01,079 --> 01:17:04,081
because Mitch and Ted
created some crazy story.

1648
01:17:04,082 --> 01:17:07,751
60 days, it's going to
be cash-flow neutral?

1649
01:17:07,752 --> 01:17:09,086
Yeah, like, self-sufficient,

1650
01:17:09,087 --> 01:17:10,963
where they're not going
through cash burn.

1651
01:17:10,964 --> 01:17:13,340
<i>It is not illegal to be stupid.</i>

1652
01:17:13,341 --> 01:17:15,092
It is not illegal to be wrong.

1653
01:17:15,093 --> 01:17:18,262
It is illegal to
knowingly lie and mislead

1654
01:17:18,263 --> 01:17:21,306
and then take someone's money.

1655
01:17:21,307 --> 01:17:22,933
<i>It's the small retail investor</i>

1656
01:17:22,934 --> 01:17:25,686
that gets sucked
into these ideas,

1657
01:17:25,687 --> 01:17:28,856
and no one ever sends
the money back to them.

1658
01:17:28,857 --> 01:17:30,607
They don't see it coming.

1659
01:17:30,608 --> 01:17:33,485
I believe I ended up
losing about $200,000,

1660
01:17:33,486 --> 01:17:35,946
which was a significant
amount for me.

1661
01:17:35,947 --> 01:17:38,699
Looking at a MoviePass card,

1662
01:17:38,700 --> 01:17:40,909
it makes me feel like...

1663
01:17:40,910 --> 01:17:42,245
warm shit.

1664
01:17:43,788 --> 01:17:46,832
<i>Ted and Mitch fleeced
retail investors</i>

1665
01:17:46,833 --> 01:17:48,792
<i>and the average person,</i>

1666
01:17:48,793 --> 01:17:51,545
either users of the service
or shareholders like myself.

1667
01:17:51,546 --> 01:17:53,589
It's just sad.

1668
01:17:53,590 --> 01:17:56,467
<i>Ted was not selling a product.</i>

1669
01:17:56,468 --> 01:17:58,928
Ted is a stock promoter.

1670
01:18:00,472 --> 01:18:02,474
<i>You see a repeated pattern.</i>

1671
01:18:06,144 --> 01:18:08,645
I'm so glad to see that
you made the right choice

1672
01:18:08,646 --> 01:18:10,064
to come to the next section.

1673
01:18:10,065 --> 01:18:12,775
So what you have to wonder is,

1674
01:18:12,776 --> 01:18:16,737
how is HMNY...

1675
01:18:16,738 --> 01:18:19,156
getting the money...

1676
01:18:19,157 --> 01:18:22,452
so that MoviePass can
lose it so quickly?

1677
01:18:24,162 --> 01:18:25,662
And the answer is,

1678
01:18:25,663 --> 01:18:28,666
they're raising it
from Hudson Bay.

1679
01:18:28,667 --> 01:18:30,459
Hudson Bay was the hedge fund

1680
01:18:30,460 --> 01:18:31,835
that was behind them.

1681
01:18:31,836 --> 01:18:35,172
<i>In total, it was
upwards of $200 million</i>

1682
01:18:35,173 --> 01:18:39,426
that Hudson Bay
invested into HMNY.

1683
01:18:39,427 --> 01:18:41,345
<i>Your next question is,</i>

1684
01:18:41,346 --> 01:18:44,515
<i>why is Hudson Bay buying stock</i>

1685
01:18:44,516 --> 01:18:47,226
<i>or getting debt from HMNY</i>

1686
01:18:47,227 --> 01:18:50,229
<i>for a business that's
losing so much money?</i>

1687
01:18:50,230 --> 01:18:51,271
We were investigating

1688
01:18:51,272 --> 01:18:53,565
these hundreds of millions
of dollars in losses.

1689
01:18:53,566 --> 01:18:55,192
And we kept trying
to figure out,

1690
01:18:55,193 --> 01:18:58,362
what was the plan to actually
make this business work?

1691
01:18:58,363 --> 01:19:02,866
People like Ted are not
there to build a business.

1692
01:19:02,867 --> 01:19:06,203
They're there to sell you stock.

1693
01:19:06,204 --> 01:19:07,579
That's what they do.

1694
01:19:07,580 --> 01:19:10,749
<i>And the people who were
working at MoviePass told me</i>

1695
01:19:10,750 --> 01:19:13,043
there was never going to
be any big partnership

1696
01:19:13,044 --> 01:19:14,795
with the major movie theaters.

1697
01:19:14,796 --> 01:19:17,923
There was never going to be
any huge marketing dollars

1698
01:19:17,924 --> 01:19:19,925
that were going to
somehow save the company.

1699
01:19:19,926 --> 01:19:22,177
There was never going
to be this big data

1700
01:19:22,178 --> 01:19:25,347
that magically was sold to
a tech company or something

1701
01:19:25,348 --> 01:19:27,307
and made everything work.

1702
01:19:27,308 --> 01:19:32,312
It is no different than
making a play on Broadway.

1703
01:19:32,313 --> 01:19:34,106
You need a star,

1704
01:19:34,107 --> 01:19:37,192
you need a story,
and you need a prop.

1705
01:19:37,193 --> 01:19:38,736
<i>Mitch is perfect.</i>

1706
01:19:38,737 --> 01:19:41,238
<i>Look at his background.
Look at his appearance.</i>

1707
01:19:41,239 --> 01:19:44,116
<i>Mitch is the guy. He's
the guy. He's the CEO.</i>

1708
01:19:44,117 --> 01:19:47,119
<i>We're on the way to over
5 million subscribers</i>

1709
01:19:47,120 --> 01:19:50,706
by the end of the year, and
that's when the cash flow

1710
01:19:50,707 --> 01:19:52,833
starts to become positive.

1711
01:19:52,834 --> 01:19:54,835
<i>Ted's the visionary.</i>

1712
01:19:54,836 --> 01:19:56,795
<i>MoviePass is our prop.</i>

1713
01:19:56,796 --> 01:19:58,172
<i>Look at the growth.</i>

1714
01:19:58,173 --> 01:20:00,090
And what is the revenue stream

1715
01:20:00,091 --> 01:20:02,718
that makes that possible?
- Multiple revenue streams.

1716
01:20:02,719 --> 01:20:04,386
<i>They're putting on a play.</i>

1717
01:20:04,387 --> 01:20:06,430
Instead of buying a ticket,
you bought their stock.

1718
01:20:06,431 --> 01:20:09,266
In both cases, you
left with nothing,

1719
01:20:09,267 --> 01:20:10,684
other than memories.

1720
01:20:10,685 --> 01:20:12,269
Some of the instincts we had

1721
01:20:12,270 --> 01:20:16,690
around the way the ship
was being run were correct.

1722
01:20:16,691 --> 01:20:18,901
That behavior and
those decisions

1723
01:20:18,902 --> 01:20:21,278
were destroying value.

1724
01:20:21,279 --> 01:20:24,323
And the brand that
we cared about,

1725
01:20:24,324 --> 01:20:26,700
the subscribers
that we cared about,

1726
01:20:26,701 --> 01:20:29,745
the user experience
that we obsessed over

1727
01:20:29,746 --> 01:20:33,666
all was getting washed away.

1728
01:20:33,667 --> 01:20:35,000
<i>And this just in.</i>

1729
01:20:35,001 --> 01:20:38,128
The former CEOs of MoviePass
and its parent company

1730
01:20:38,129 --> 01:20:40,130
have been charged
with securities fraud.

1731
01:20:40,131 --> 01:20:42,508
<i>Prosecutors say they misled
investors as part of a scheme</i>

1732
01:20:42,509 --> 01:20:45,929
<i>to artificially boost the
company's stock price.</i>

1733
01:20:49,307 --> 01:20:52,101
The problem with Ted's
strategy at MoviePass...

1734
01:20:52,102 --> 01:20:54,812
like, he lost so much
money so quickly.

1735
01:20:54,813 --> 01:20:57,147
It could have lasted much longer

1736
01:20:57,148 --> 01:21:01,318
had he said, $30 a month,
and sacrificed the growth.

1737
01:21:01,319 --> 01:21:06,156
It seemed like he just had a
"Thelma & Louise" strategy.

1738
01:21:06,157 --> 01:21:08,993
<i>Let's just gun it
and go off the cliff.</i>

1739
01:21:14,916 --> 01:21:17,710
<i>People's money just
went up in smoke.</i>

1740
01:21:17,711 --> 01:21:19,503
If I had done what they had done

1741
01:21:19,504 --> 01:21:23,590
and gone through $250 million,
I would have been in jail.

1742
01:21:23,591 --> 01:21:25,801
It's kind of like they
were the goddamn Mike Tyson

1743
01:21:25,802 --> 01:21:27,177
of fucking movies.

1744
01:21:27,178 --> 01:21:29,304
How do you burn
through $250 million?

1745
01:21:29,305 --> 01:21:30,889
What the fuck is wrong with you?

1746
01:21:30,890 --> 01:21:31,850
Are you crazy?

1747
01:21:31,851 --> 01:21:35,144
Ted's a con artist at
the end of the day...

1748
01:21:35,145 --> 01:21:37,354
period.

1749
01:21:37,355 --> 01:21:40,024
<i>What was a fantastic
business idea</i>

1750
01:21:40,025 --> 01:21:43,027
<i>got turned into this circus.</i>

1751
01:21:43,028 --> 01:21:45,195
When I look back,

1752
01:21:45,196 --> 01:21:47,865
I can come up with
a dozen things

1753
01:21:47,866 --> 01:21:49,950
we should have done differently.

1754
01:21:49,951 --> 01:21:52,536
It's true for any failure.

1755
01:21:52,537 --> 01:21:54,872
It's not only embarrassing,

1756
01:21:54,873 --> 01:21:58,208
but it's also a big
learning lesson.

1757
01:21:58,209 --> 01:22:01,253
And for me, it just reminds me

1758
01:22:01,254 --> 01:22:05,508
how many mistakes that I
made in that whole business.

1759
01:22:23,360 --> 01:22:26,028
I'm going to talk a little
bit about relationships

1760
01:22:26,029 --> 01:22:27,489
and connecting.

1761
01:22:43,588 --> 01:22:44,672
My name is Ted Farnsworth.

1762
01:22:44,673 --> 01:22:47,383
I'm the co-founder and
chairman of Zash Global Media,

1763
01:22:47,384 --> 01:22:50,595
as well as co-CEO
of Vinco Ventures.

1764
01:23:00,772 --> 01:23:02,398
Let me apologize
to the shareholders

1765
01:23:02,399 --> 01:23:03,440
of Vinco Ventures.

1766
01:23:03,441 --> 01:23:05,735
It looks like a
circus going on here.

1767
01:23:16,454 --> 01:23:17,955
<i>At one time,</i>

1768
01:23:17,956 --> 01:23:20,916
<i>there was this really
positive group of people</i>

1769
01:23:20,917 --> 01:23:24,378
who were just trying to
make moviegoing easier.

1770
01:23:24,379 --> 01:23:26,213
And...

1771
01:23:26,214 --> 01:23:29,466
it's really an example
of, like, corporate greed

1772
01:23:29,467 --> 01:23:31,176
and...

1773
01:23:31,177 --> 01:23:35,305
what that can do to
people and to a company.

1774
01:23:35,306 --> 01:23:39,309
Ted and Mitch are the
people who took MoviePass

1775
01:23:39,310 --> 01:23:41,895
and turned it into
this, like, monster.

1776
01:23:41,896 --> 01:23:44,565
It was the greatest thing ever.

1777
01:23:44,566 --> 01:23:46,608
I was paying $10 a month,

1778
01:23:46,609 --> 01:23:50,904
and I was able to go see a
movie once a day, every day.

1779
01:23:50,905 --> 01:23:54,158
And I averaged, like, about...

1780
01:23:54,159 --> 01:23:56,994
I'm going to say I averaged
about four movies a month,

1781
01:23:56,995 --> 01:24:00,122
sometimes four movies
a week, for real.

1782
01:24:00,123 --> 01:24:03,376
And I'm realizing, I haven't
been to a movie since.

1783
01:24:05,170 --> 01:24:07,421
Oh, I miss MoviePass.
Oh, I miss it.

1784
01:24:07,422 --> 01:24:08,922
<i>I wouldn't have had a problem</i>

1785
01:24:08,923 --> 01:24:11,508
<i>paying a little bit more just
to keep the company around.</i>

1786
01:24:11,509 --> 01:24:13,677
Maybe had they would have
done it from the beginning

1787
01:24:13,678 --> 01:24:15,971
or kept it the way it was
when it first started,

1788
01:24:15,972 --> 01:24:17,765
maybe it would still
be around today.

1789
01:24:17,766 --> 01:24:21,268
<i>The reason why I still
have it, it was just...</i>

1790
01:24:21,269 --> 01:24:24,063
it represented a
great time in my life,

1791
01:24:24,064 --> 01:24:26,190
despite all the
hell and high water

1792
01:24:26,191 --> 01:24:28,025
and just a lot of
stuff that happened

1793
01:24:28,026 --> 01:24:29,735
outside of MoviePass for me.

1794
01:24:29,736 --> 01:24:33,113
Like, you know, I grew a
lot, and I learned a lot,

1795
01:24:33,114 --> 01:24:36,367
and I think, like, you know,
it's wisdom well earned.

1796
01:24:36,368 --> 01:24:38,619
So I think that's why
I hold on to this.

1797
01:24:38,620 --> 01:24:40,704
I heard those are
collector's items now.

1798
01:24:40,705 --> 01:24:42,373
You heard that?
- How much?

1799
01:24:42,374 --> 01:24:45,209
- Was it $1,000 or something?
- $1,500.

1800
01:24:45,210 --> 01:24:47,336
This bitch will be
on eBay tonight...

1801
01:24:47,337 --> 01:24:49,381
Guaranteed.

1802
01:24:51,466 --> 01:24:55,302
<i>When I got fired, I
went to a monastery,</i>

1803
01:24:55,303 --> 01:24:57,681
where I sit with
monks in silence.

1804
01:24:59,182 --> 01:25:00,683
<i>My anger is there,</i>

1805
01:25:00,684 --> 01:25:03,435
<i>but if you don't do
something with that energy,</i>

1806
01:25:03,436 --> 01:25:04,728
it devours you.

1807
01:25:04,729 --> 01:25:08,232
It eats you from the
inside. It debilitates you.

1808
01:25:08,233 --> 01:25:11,318
<i>When Stacy and I
exited MoviePass,</i>

1809
01:25:11,319 --> 01:25:12,945
I gave myself permission

1810
01:25:12,946 --> 01:25:15,447
to not have to think
about it as much anymore

1811
01:25:15,448 --> 01:25:19,159
and to really start thinking
about new businesses to build,

1812
01:25:19,160 --> 01:25:21,453
new problems to solve,

1813
01:25:21,454 --> 01:25:23,163
new...

1814
01:25:23,164 --> 01:25:25,165
people to work with.

1815
01:25:25,166 --> 01:25:28,293
Even to this day, when
people, you know, hear

1816
01:25:28,294 --> 01:25:31,673
that I co-founded MoviePass,
I get a lot of love.

1817
01:25:33,299 --> 01:25:37,052
<i>People kept talking
about MoviePass.</i>

1818
01:25:37,053 --> 01:25:40,390
Like, maybe one day this
thing can come back.

1819
01:25:42,267 --> 01:25:46,270
<i>In the summer of 2021,</i>

1820
01:25:46,271 --> 01:25:50,941
I heard that MoviePass
was put up for auction.

1821
01:25:50,942 --> 01:25:53,694
<i>I contacted the courts,</i>

1822
01:25:53,695 --> 01:25:57,156
and then I made a bid to
purchase MoviePass back.

1823
01:25:57,157 --> 01:26:00,659
<i>Out of the ashes, like
the rising of the phoenix,</i>

1824
01:26:00,660 --> 01:26:03,954
<i>MoviePass has returned under
the ownership and guidance</i>

1825
01:26:03,955 --> 01:26:06,540
of the original
owner of MoviePass,

1826
01:26:06,541 --> 01:26:08,959
you know, back when MoviePass
was a legitimate business.

1827
01:26:08,960 --> 01:26:10,461
<i>MoviePass is back.</i>

1828
01:26:10,462 --> 01:26:12,838
MoviePass and its CEO
are back at it again,

1829
01:26:12,839 --> 01:26:14,214
this time placing all bets

1830
01:26:14,215 --> 01:26:16,717
on believing they now
have the perfect recipe

1831
01:26:16,718 --> 01:26:18,469
<i>to get moviegoers
back into theaters.</i>

1832
01:26:18,470 --> 01:26:20,512
<i>With theaters looking
for a big boost,</i>

1833
01:26:20,513 --> 01:26:22,556
<i>company leaders feel
now is the perfect time</i>

1834
01:26:22,557 --> 01:26:23,599
<i>for a relaunch.</i>

1835
01:26:23,600 --> 01:26:26,685
We've gotten the experience
really down tight.

1836
01:26:26,686 --> 01:26:28,520
And we're already seeing...

1837
01:26:28,521 --> 01:26:29,980
because we've got lots of people

1838
01:26:29,981 --> 01:26:31,565
that are already
on the platform.

1839
01:26:31,566 --> 01:26:33,108
Joining me now here at the floor

1840
01:26:33,109 --> 01:26:34,318
of the New York Stock Exchange

1841
01:26:34,319 --> 01:26:36,779
is Stacy Spikes, the
CEO of MoviePass,

1842
01:26:36,780 --> 01:26:37,863
also author of the book

1843
01:26:37,864 --> 01:26:40,783
"Black Founder: The Hidden
Power of Being an Outsider,"

1844
01:26:40,784 --> 01:26:42,159
the man himself joining me.

1845
01:26:42,160 --> 01:26:43,744
Stacy, thanks a lot
for taking the time.

1846
01:26:43,745 --> 01:26:44,787
Thanks, JD.

1847
01:26:44,788 --> 01:26:46,872
<i>It really feels nice
to see the people tell</i>

1848
01:26:46,873 --> 01:26:48,666
how the book has helped them

1849
01:26:48,667 --> 01:26:52,336
and the honesty of
what I went through

1850
01:26:52,337 --> 01:26:54,713
and talking about the
emotional journey,

1851
01:26:54,714 --> 01:26:57,216
that a lot of
entrepreneurs and founders

1852
01:26:57,217 --> 01:26:59,718
have really appreciated
that level of honesty.

1853
01:26:59,719 --> 01:27:01,804
<i>Thank you for being
a Black founder.</i>

1854
01:27:01,805 --> 01:27:05,557
Thank you for being an
inspiration to all of us,

1855
01:27:05,558 --> 01:27:09,812
for being a man of influence,
impact, and integrity

1856
01:27:09,813 --> 01:27:11,981
and character that you are.

1857
01:27:13,525 --> 01:27:17,152
I was always inspired by
stories like Steve Jobs,

1858
01:27:17,153 --> 01:27:19,071
you know, leaving
Apple and coming back.

1859
01:27:19,072 --> 01:27:23,325
<i>I was inspired by Michael
Dell leaving Dell Computers</i>

1860
01:27:23,326 --> 01:27:24,785
<i>and him coming back.</i>

1861
01:27:24,786 --> 01:27:29,540
And there's so many stories
in the entrepreneurial ethos

1862
01:27:29,541 --> 01:27:31,542
where the founders came back.

1863
01:27:31,543 --> 01:27:34,462
I'd never live with
myself if I didn't try.

1864
01:27:37,841 --> 01:27:40,634
<i>I hope that Stacy's
next attempt here</i>

1865
01:27:40,635 --> 01:27:44,848
<i>to make MoviePass what we all
hoped it will be will succeed.</i>

1866
01:27:46,349 --> 01:27:49,393
<i>The best way I can
describe Stacy...</i>

1867
01:27:49,394 --> 01:27:53,939
<i>he's, like, very
consistent and persistent.</i>

1868
01:27:53,940 --> 01:27:57,484
<i>He still feels like he has
an itch he wants to scratch</i>

1869
01:27:57,485 --> 01:27:59,319
with this business model.

1870
01:27:59,320 --> 01:28:03,198
<i>MoviePass doubled the
revenue in theaters.</i>

1871
01:28:03,199 --> 01:28:05,159
<i>That's revolutionary.</i>

1872
01:28:05,160 --> 01:28:07,077
<i>IMAX didn't do that.</i>

1873
01:28:07,078 --> 01:28:09,288
<i>Dine-In didn't do that.</i>

1874
01:28:09,289 --> 01:28:11,541
<i>And two brothers built that.</i>

1875
01:28:13,376 --> 01:28:16,045
<i>I'll never forget... it
was a Saturday afternoon,</i>

1876
01:28:16,046 --> 01:28:18,589
<i>and I went to
Regal Union Square.</i>

1877
01:28:18,590 --> 01:28:20,758
<i>And I was sitting in my seat.</i>

1878
01:28:20,759 --> 01:28:24,928
And in between the seats, this
young brother looks at me,

1879
01:28:24,929 --> 01:28:27,264
and he says, yo...

1880
01:28:27,265 --> 01:28:29,224
are you Stacy Spikes?

1881
01:28:29,225 --> 01:28:30,934
And I said, yes.

1882
01:28:30,935 --> 01:28:33,270
He goes, man, thank you.

1883
01:28:33,271 --> 01:28:35,773
Thank you for everything
that you've done, man.

1884
01:28:35,774 --> 01:28:37,107
You make me proud.

1885
01:28:37,108 --> 01:28:39,610
And that moment...

1886
01:28:39,611 --> 01:28:42,947
that encapsulated everything.