1
00:00:00,875 --> 00:00:02,460
[TV static drones]
2
00:00:02,000 --> 00:00:07,000
Downloaded from
YTS.MX
3
00:00:02,460 --> 00:00:05,005
[bright tone]
4
00:00:08,000 --> 00:00:13,000
Official YIFY movies site:
YTS.MX
5
00:00:14,973 --> 00:00:18,101
[indistinct chatter]
6
00:00:20,145 --> 00:00:21,896
What are you
wearing right now?
7
00:00:21,896 --> 00:00:23,857
What am I wearing?
8
00:00:23,857 --> 00:00:26,317
Oh, it's--
9
00:00:26,317 --> 00:00:28,611
I know.
I still got to support.
10
00:00:28,611 --> 00:00:29,904
Ugh.
11
00:00:29,904 --> 00:00:32,198
It's my Superman moment
right now.
12
00:00:32,198 --> 00:00:33,825
A lot of people stop me
when I'm wearing this shirt,
13
00:00:33,825 --> 00:00:35,660
and they go, oh, my God,
that's so cool!
14
00:00:35,660 --> 00:00:37,370
MoviePass, we remember them.
15
00:00:37,370 --> 00:00:39,831
Whatever happened
to those guys?
16
00:00:39,831 --> 00:00:41,833
[hip-hop music]
17
00:00:41,833 --> 00:00:43,168
If you're anything like me,
18
00:00:43,168 --> 00:00:44,961
you wish you had seen
all those movies
19
00:00:44,961 --> 00:00:46,463
that everyone's talking about.
20
00:00:46,463 --> 00:00:49,382
Well, there's one
red-hot company that gets it.
21
00:00:49,382 --> 00:00:50,342
MoviePass.
22
00:00:50,342 --> 00:00:51,885
- MoviePass.
- MoviePass.
23
00:00:51,885 --> 00:00:53,136
The popular
movie-ticket app.
24
00:00:53,136 --> 00:00:54,637
This is a MoviePass card.
25
00:00:54,637 --> 00:00:56,973
This was my best friend
for quite a while.
26
00:00:56,973 --> 00:00:59,100
MoviePass,
a subscription service.
27
00:00:59,100 --> 00:01:01,019
The Netflix
for the movie theaters.
28
00:01:01,019 --> 00:01:02,729
It sounded like a dream.
29
00:01:02,729 --> 00:01:03,813
You pay a monthly fee,
30
00:01:03,813 --> 00:01:05,857
and you can go to the movies
every single day.
31
00:01:05,857 --> 00:01:07,192
What are you waiting for?
32
00:01:07,192 --> 00:01:08,735
Get your movie on
with MoviePass.
33
00:01:08,735 --> 00:01:11,446
MoviePass's CEO Mitch Lowe
and Ted Farnsworth.
34
00:01:11,446 --> 00:01:13,406
Look at this
incredible growth.
35
00:01:13,406 --> 00:01:15,742
We thought
this could reinvigorate
36
00:01:15,742 --> 00:01:17,077
the moviegoing business.
37
00:01:17,077 --> 00:01:19,871
Any movie, any theater,
any day--that was me.
38
00:01:19,871 --> 00:01:21,373
MoviePass has been
very successful
39
00:01:21,373 --> 00:01:23,375
in bringing more people
to the theaters.
40
00:01:23,375 --> 00:01:25,460
This is getting
millions of users.
41
00:01:25,460 --> 00:01:27,045
A year ago,
a lot of people didn't know
42
00:01:27,045 --> 00:01:28,421
what MoviePass was.
43
00:01:28,421 --> 00:01:30,590
It's become such a big thing.
My mom has MoviePass.
44
00:01:30,590 --> 00:01:34,302
MoviePass is
the fastest-growing company
45
00:01:34,302 --> 00:01:36,805
ever in the history of media,
and the stock shot up.
46
00:01:36,805 --> 00:01:38,682
We were worth
$80 million-plus.
47
00:01:38,682 --> 00:01:41,059
He'd just spend, spend,
spend, spend, spend.
48
00:01:41,059 --> 00:01:42,560
Going to Coachella,
49
00:01:42,560 --> 00:01:44,771
partying with Big Boi
and John Travolta.
50
00:01:44,771 --> 00:01:46,690
Fifty fucking Cent!
51
00:01:46,690 --> 00:01:49,609
It is an endless list of,
52
00:01:49,609 --> 00:01:51,403
oh, my God,
what is happening here?
53
00:01:51,403 --> 00:01:53,988
They burned
through $250 million.
54
00:01:53,988 --> 00:01:55,615
Whoa, whoa. Wait, wait.
Whoa, whoa.
55
00:01:55,615 --> 00:01:58,201
We're the hottest brand out
there going for the last year.
56
00:01:58,201 --> 00:02:00,328
I mean, he gave me
big-pimpin' vibes.
57
00:02:00,328 --> 00:02:02,247
He said, everyone's
going to be rich.
58
00:02:02,247 --> 00:02:05,458
At that point,
everything was possible.
59
00:02:05,458 --> 00:02:07,460
They were on this gravy train
to greatness.
60
00:02:07,460 --> 00:02:09,587
What they did
is definitely illegal.
61
00:02:09,587 --> 00:02:13,008
It is theft,
and he actually got arrested.
62
00:02:13,008 --> 00:02:14,592
Karma's a bitch.
63
00:02:25,478 --> 00:02:29,607
My first moviegoing
experience was "Psycho."
64
00:02:29,607 --> 00:02:32,193
[screaming]
65
00:02:32,193 --> 00:02:35,739
My aunt had
an old El Camino,
66
00:02:35,739 --> 00:02:38,658
and she would take us all
to the drive-in.
67
00:02:38,658 --> 00:02:43,246
And we would hide
under a blanket in the back
68
00:02:43,246 --> 00:02:47,959
so she didn't have to also pay
the 25 cents for us kids.
69
00:02:47,959 --> 00:02:50,962
And in that shower scene...
70
00:02:50,962 --> 00:02:52,464
we all jumped
71
00:02:52,464 --> 00:02:56,343
and hit our heads
on the ceiling of the car.
72
00:02:56,343 --> 00:03:00,263
Movie theaters were slowly
but surely dying away,
73
00:03:00,263 --> 00:03:04,059
and I have been in
the business of entertainment
74
00:03:04,059 --> 00:03:05,685
for about 40 years.
75
00:03:05,685 --> 00:03:07,520
You're in total control...
76
00:03:07,520 --> 00:03:09,856
So many people said
that there was no way
77
00:03:09,856 --> 00:03:14,694
that Redbox could work,
that Netflix could work.
78
00:03:14,694 --> 00:03:17,614
Now, Mitch Lowe was part of
the founding team at Netflix.
79
00:03:17,614 --> 00:03:20,492
Now MoviePass CEO--
that's the service
80
00:03:20,492 --> 00:03:23,370
that offers an unlimited
monthly subscription for fans
81
00:03:23,370 --> 00:03:26,664
to catch theater showings on
tens of thousands of screens.
82
00:03:26,664 --> 00:03:30,710
You pay $39.95, and you go
to as many movies as you want.
83
00:03:30,710 --> 00:03:33,797
You used your iPhone or
Android app to pick the movie,
84
00:03:33,797 --> 00:03:35,465
the time, the theater.
85
00:03:35,465 --> 00:03:38,093
We activate a debit card
which we send you
86
00:03:38,093 --> 00:03:41,012
that gives you the money to
just walk up to the box office
87
00:03:41,012 --> 00:03:42,389
and pay for your ticket.
88
00:03:42,389 --> 00:03:44,265
- You used to work at Netflix.
- Yes.
89
00:03:44,265 --> 00:03:45,767
Is that where you kind of
got all these ideas?
90
00:03:45,767 --> 00:03:46,810
Yeah, you know...
91
00:03:46,810 --> 00:03:48,019
The whole idea here
92
00:03:48,019 --> 00:03:49,979
is to build
a big subscription base...
93
00:03:49,979 --> 00:03:52,524
In the same way
Netflix reinvigorated
94
00:03:52,524 --> 00:03:55,026
the home, you know,
rental experience.
95
00:03:55,026 --> 00:03:57,696
If MoviePass
could be successful,
96
00:03:57,696 --> 00:04:00,907
you could get people
back to the movie theater
97
00:04:00,907 --> 00:04:03,785
in that social environment,
on the big screen,
98
00:04:03,785 --> 00:04:05,495
with the big sound.
99
00:04:07,372 --> 00:04:09,374
I was really excited
that Mitch
100
00:04:09,374 --> 00:04:11,001
was the one
running the company.
101
00:04:11,001 --> 00:04:14,129
If there's anyone that's going
to make this company work,
102
00:04:14,129 --> 00:04:16,715
it's going to be someone
like Mitch.
103
00:04:16,715 --> 00:04:20,301
There was this real energy
around the brand.
104
00:04:20,301 --> 00:04:23,179
[upbeat rock music]
105
00:04:23,179 --> 00:04:24,472
I called my friend.
106
00:04:24,472 --> 00:04:27,392
I was like, you're never going
to believe where I got a job.
107
00:04:27,392 --> 00:04:29,477
I was, like,
such a fangirl about it
108
00:04:29,477 --> 00:04:33,398
that it really did feel like
I was getting a job at Netflix
109
00:04:33,398 --> 00:04:35,567
or I was getting a job
at Google or Facebook
110
00:04:35,567 --> 00:04:38,653
or any one of these,
like, big tech companies.
111
00:04:38,653 --> 00:04:40,864
We were at a WeWork,
so they, like,
112
00:04:40,864 --> 00:04:44,367
showed me, like, the snacks
and the tap on the bar.
113
00:04:44,367 --> 00:04:45,910
I was like,
wait, we're getting--
114
00:04:45,910 --> 00:04:47,287
We can drink at work?
115
00:04:47,287 --> 00:04:48,997
So I was just like
a kid in a candy store.
116
00:04:48,997 --> 00:04:50,582
MoviePass, funny enough,
117
00:04:50,582 --> 00:04:52,375
was my first
actual engineering job.
118
00:04:52,375 --> 00:04:54,836
They were the first company
to, like, actually give me,
119
00:04:54,836 --> 00:04:56,338
like, an offer.
120
00:04:56,338 --> 00:04:58,048
So it was the start
of my engineering career,
121
00:04:58,048 --> 00:04:59,466
which is pretty crazy.
122
00:04:59,466 --> 00:05:01,801
That first day, like,
really set the stage for,
123
00:05:01,801 --> 00:05:03,762
I'm working with people
who genuinely care
124
00:05:03,762 --> 00:05:05,930
and love what they do,
and especially Stacy, right?
125
00:05:05,930 --> 00:05:08,141
Oh, man, he loved it.
126
00:05:08,141 --> 00:05:10,060
Everybody loved
going to the movies,
127
00:05:10,060 --> 00:05:12,437
and we made moviegoing
easier, right?
128
00:05:12,437 --> 00:05:14,981
We brought people
back to the movies.
129
00:05:14,981 --> 00:05:16,941
Before MoviePass,
130
00:05:16,941 --> 00:05:20,111
I was the vice president
of marketing at Miramax,
131
00:05:20,111 --> 00:05:23,239
and I had worked on "Scream,"
132
00:05:23,239 --> 00:05:26,284
"Trainspotting," "The Crow."
133
00:05:26,284 --> 00:05:28,411
I remember being
walked around
134
00:05:28,411 --> 00:05:30,622
and introduced to the team.
135
00:05:30,622 --> 00:05:32,832
And, you know, we were
spearheaded by Mitch.
136
00:05:32,832 --> 00:05:35,460
And I thought that he was
a pretty compelling person,
137
00:05:35,460 --> 00:05:37,962
you know,
a bit of a visionary.
138
00:05:37,962 --> 00:05:40,840
And our vision at the time--
we wanted to build
139
00:05:40,840 --> 00:05:43,551
a large subscriber base
of movie lovers,
140
00:05:43,551 --> 00:05:46,763
but to do any kind of
all-you-can-eat subscription,
141
00:05:46,763 --> 00:05:48,723
you know, you need
a lot of money.
142
00:05:50,725 --> 00:05:54,813
MoviePass was hovering
around 20,000 subscribers.
143
00:05:56,398 --> 00:05:58,650
We're just treading water,
144
00:05:58,650 --> 00:06:01,444
and the money well
had dried up.
145
00:06:01,444 --> 00:06:03,321
[person shivering]
146
00:06:03,321 --> 00:06:04,989
We needed a lot more money.
147
00:06:06,574 --> 00:06:08,993
I was able to raise
a little bit here,
148
00:06:08,993 --> 00:06:12,664
a little bit there
from high-net-worth believers.
149
00:06:12,664 --> 00:06:14,499
I've got ties with a number
of the folks
150
00:06:14,499 --> 00:06:16,960
who were very early
at Netflix.
151
00:06:16,960 --> 00:06:18,670
And Mitch knows his stuff.
152
00:06:18,670 --> 00:06:22,173
The idea that streaming
was going to destroy theaters
153
00:06:22,173 --> 00:06:23,842
was worrisome to me.
154
00:06:23,842 --> 00:06:25,969
I thought
that we should play a role
155
00:06:25,969 --> 00:06:28,221
in trying to change that.
156
00:06:28,221 --> 00:06:30,974
I was at Facebook
from 2005 to 2010
157
00:06:30,974 --> 00:06:32,017
as general counsel
158
00:06:32,017 --> 00:06:34,185
and vice president
of corporate development
159
00:06:34,185 --> 00:06:35,520
and chief privacy officer
160
00:06:35,520 --> 00:06:38,273
and left to run
for attorney general.
161
00:06:38,273 --> 00:06:39,858
I lost the Democratic primary
162
00:06:39,858 --> 00:06:42,610
to this up-and-comer
named Kamala Harris,
163
00:06:42,610 --> 00:06:44,529
who you may have heard of.
164
00:06:44,529 --> 00:06:46,698
I was involved in MoviePass,
165
00:06:46,698 --> 00:06:49,534
but I knew that user growth
was critical.
166
00:06:49,534 --> 00:06:50,702
I talked to Mitch.
167
00:06:50,702 --> 00:06:52,370
He said that he'd had
some conversations
168
00:06:52,370 --> 00:06:53,830
with this guy Ted Farnsworth
169
00:06:53,830 --> 00:06:56,249
and that he had
some connections
170
00:06:56,249 --> 00:06:58,418
with folks
in New York finance circles,
171
00:06:58,418 --> 00:07:00,962
which would be,
you know, helpful.
172
00:07:02,714 --> 00:07:05,592
Ted was the CEO of HMNY.
173
00:07:05,592 --> 00:07:08,720
HMNY stands for
Helios and Matheson New York,
174
00:07:08,720 --> 00:07:12,098
a small data-analytics company
focused mainly on IT.
175
00:07:12,098 --> 00:07:14,392
He's extremely likeable,
176
00:07:14,392 --> 00:07:18,063
the typical CEO/entrepreneur.
177
00:07:18,063 --> 00:07:21,441
They love to chat it up.
They love to be friendly.
178
00:07:21,441 --> 00:07:23,568
And they go and take on
these companies,
179
00:07:23,568 --> 00:07:25,487
get people to really believe
in them.
180
00:07:25,487 --> 00:07:27,614
And he had a long history
of doing that
181
00:07:27,614 --> 00:07:31,576
in the beverage industry,
in the supplements industry.
182
00:07:31,576 --> 00:07:34,579
Ted has a great background
in finance
183
00:07:34,579 --> 00:07:37,665
and raising money,
PR and marketing.
184
00:07:37,665 --> 00:07:39,250
It was kind of natural.
185
00:07:40,669 --> 00:07:43,505
I knew that if Ted fell
in love with MoviePass,
186
00:07:43,505 --> 00:07:45,507
he would invest.
187
00:07:45,507 --> 00:07:47,759
So I went to meet him
and got to know him,
188
00:07:47,759 --> 00:07:51,012
thought he was
a super-smart guy.
189
00:07:51,012 --> 00:07:53,473
He said, I absolutely love
what you're doing.
190
00:07:53,473 --> 00:07:56,434
And he saw MoviePass
191
00:07:56,434 --> 00:07:58,269
as something that could fit
192
00:07:58,269 --> 00:08:00,063
under that umbrella.
193
00:08:00,063 --> 00:08:03,066
[upbeat jazz music]
194
00:08:03,066 --> 00:08:06,653
He's incredibly charming
and very much,
195
00:08:06,653 --> 00:08:09,155
you know, sort of knows
how to talk about the future
196
00:08:09,155 --> 00:08:12,617
and, ultimately, showed
passion for the business.
197
00:08:15,245 --> 00:08:18,456
He was a little worried
about the business,
198
00:08:18,456 --> 00:08:20,917
especially the total user base.
199
00:08:22,752 --> 00:08:25,672
MoviePass had never gotten
beyond 20,000.
200
00:08:25,672 --> 00:08:29,342
And he said you needed
millions of subscribers.
201
00:08:29,342 --> 00:08:32,429
20,000
was not going to cut it.
202
00:08:32,429 --> 00:08:34,222
The deal that was put
on the table
203
00:08:34,222 --> 00:08:36,099
was tens
of millions of dollars,
204
00:08:36,099 --> 00:08:38,601
which is more money than we'd
ever seen at one time, right?
205
00:08:38,601 --> 00:08:40,103
Which was very exciting
206
00:08:40,103 --> 00:08:43,523
but with such a big asterisk
next to it.
207
00:08:43,523 --> 00:08:46,484
In order to get
$25 million in cash,
208
00:08:46,484 --> 00:08:50,321
we had to reach
100,000 new subs
209
00:08:50,321 --> 00:08:52,157
within 6 months.
210
00:08:52,157 --> 00:08:55,035
But it took 5 years
211
00:08:55,035 --> 00:08:57,996
to get the 20,000 members
that we had.
212
00:08:57,996 --> 00:09:01,666
So we didn't know
if there's a way to do it.
213
00:09:03,001 --> 00:09:06,713
We explained the various
pricing models we had tested.
214
00:09:06,713 --> 00:09:09,132
And he asked us, what's
the one you think is the best?
215
00:09:09,132 --> 00:09:12,677
And we said, $14.95,
2 movies a month.
216
00:09:12,677 --> 00:09:15,472
But we're worried about
how much it's going to cost
217
00:09:15,472 --> 00:09:18,850
to market and, you know,
get people to try it.
218
00:09:18,850 --> 00:09:21,853
He said, no, what
you need to do is,
219
00:09:21,853 --> 00:09:24,147
you need to make
it so attractive
220
00:09:24,147 --> 00:09:26,733
that you don't need to spend
money on advertising.
221
00:09:26,733 --> 00:09:31,696
And I thought, okay,
let's give this a shot.
222
00:09:33,031 --> 00:09:35,658
MoviePass dropped
their prices...
223
00:09:35,658 --> 00:09:37,786
to $10 a month.
224
00:09:37,786 --> 00:09:41,664
[all cheering, screaming]
225
00:09:43,249 --> 00:09:45,543
MoviePass is now promising
226
00:09:45,543 --> 00:09:47,420
a month's worth
of movie tickets
227
00:09:47,420 --> 00:09:48,713
for about the cost
228
00:09:48,713 --> 00:09:50,090
of a single admission.
229
00:09:50,090 --> 00:09:52,133
- Ten bucks a month.
- It's a heck of a deal.
230
00:09:52,133 --> 00:09:54,386
[all cheering]
231
00:09:54,386 --> 00:09:56,304
I showed up to work.
232
00:09:56,304 --> 00:09:59,099
All I can just remember
is just all of our queues
233
00:09:59,099 --> 00:10:00,141
being in the red.
234
00:10:00,141 --> 00:10:02,852
Everyone wants to sign up.
Everyone wants a card.
235
00:10:02,852 --> 00:10:04,813
When can I start using it?
236
00:10:04,813 --> 00:10:06,523
And so, like,
we got bombarded.
237
00:10:06,523 --> 00:10:11,403
♪ ♪
238
00:10:11,403 --> 00:10:13,405
You could look down
for an hour
239
00:10:13,405 --> 00:10:16,408
and see the customer number
increase by 20,000 people.
240
00:10:16,408 --> 00:10:17,992
I mean, it was remarkable.
241
00:10:17,992 --> 00:10:20,286
♪ ♪
242
00:10:20,286 --> 00:10:22,497
You have incredible demand.
243
00:10:22,497 --> 00:10:23,873
People love this.
244
00:10:25,000 --> 00:10:27,002
Their website
was crashing all day
245
00:10:27,002 --> 00:10:30,839
from sheer volume of people
trying to go and visit it.
246
00:10:30,839 --> 00:10:33,008
You went from $40 a month
247
00:10:33,008 --> 00:10:34,509
to $9.95.
248
00:10:34,509 --> 00:10:35,427
What happened?
249
00:10:35,427 --> 00:10:38,138
This is the whole idea--
to get attention.
250
00:10:38,138 --> 00:10:40,890
[laughing]
251
00:10:43,768 --> 00:10:46,104
We thought
it was going to take
252
00:10:46,104 --> 00:10:50,066
about a year to reach
100,000 new subscribers.
253
00:10:50,066 --> 00:10:53,153
But all of a sudden,
we got 100,000 people
254
00:10:53,153 --> 00:10:55,113
in 48 hours
255
00:10:55,113 --> 00:10:58,575
and then another 75,000,
like, the next day.
256
00:10:58,575 --> 00:11:00,201
[phone ringing]
257
00:11:00,201 --> 00:11:02,203
I remember Stacy
calling me and saying,
258
00:11:02,203 --> 00:11:05,331
shit, how are we going
to send out that many cards?
259
00:11:05,331 --> 00:11:07,250
We only have 50,000 cards.
260
00:11:07,250 --> 00:11:10,337
And those cards
weren't easy to make.
261
00:11:10,337 --> 00:11:14,966
You know, they are real
Mastercard debit cards.
262
00:11:14,966 --> 00:11:18,803
I was like, okay,
turn this promotion off
263
00:11:18,803 --> 00:11:21,848
so that we could order
more cards.
264
00:11:21,848 --> 00:11:24,142
We need to pump
the brakes a little bit
265
00:11:24,142 --> 00:11:27,520
to make sure we didn't have
a run on too many people
266
00:11:27,520 --> 00:11:29,898
that we couldn't manage it.
267
00:11:29,898 --> 00:11:34,402
I asked Stacy, how
in the world do we get cards?
268
00:11:34,402 --> 00:11:36,821
We have to hire a Brinks truck
269
00:11:36,821 --> 00:11:39,908
to bring a big truckload
of them
270
00:11:39,908 --> 00:11:41,868
to a new facility in LA.
271
00:11:41,868 --> 00:11:44,913
That's the only way we're
going to be able to catch up.
272
00:11:44,913 --> 00:11:46,331
It was not sustainable.
273
00:11:46,331 --> 00:11:50,669
I said to Mitch,
we can't do this every week.
274
00:11:50,669 --> 00:11:53,129
And he said,
no, this is great.
275
00:11:53,129 --> 00:11:55,590
Keep it going.
Let's try and figure it out.
276
00:11:55,590 --> 00:11:58,551
[upbeat music]
277
00:11:58,551 --> 00:12:01,346
♪ ♪
278
00:12:01,346 --> 00:12:04,557
All I did was check
my mail every single day
279
00:12:04,557 --> 00:12:06,017
for my MoviePass.
280
00:12:06,017 --> 00:12:08,770
The second I got my MoviePass,
I didn't think twice.
281
00:12:08,770 --> 00:12:12,190
I went from my mailbox
right to the movie theater.
282
00:12:12,190 --> 00:12:13,733
Today is awesome.
283
00:12:13,733 --> 00:12:15,902
Why?, you ask.
284
00:12:15,902 --> 00:12:18,405
My MoviePass card showed up.
285
00:12:18,405 --> 00:12:21,866
One movie a day every
single day with the pass.
286
00:12:21,866 --> 00:12:23,618
I'm telling you,
this is the truth.
287
00:12:23,618 --> 00:12:25,370
That's insane!
288
00:12:25,370 --> 00:12:26,705
The hottest startup
289
00:12:26,705 --> 00:12:28,206
to disrupt Hollywood
since Netflix
290
00:12:28,206 --> 00:12:30,542
is getting rave reviews
from moviegoers.
291
00:12:30,542 --> 00:12:31,710
I'd watch a lot of movies.
292
00:12:31,710 --> 00:12:33,169
I'd watch a movie twice now.
293
00:12:33,169 --> 00:12:34,587
I think I'm going
to invest in that.
294
00:12:34,587 --> 00:12:38,258
Going to the movie theater,
there's nothing like it.
295
00:12:38,258 --> 00:12:40,969
♪ ♪
296
00:12:40,969 --> 00:12:43,054
It was a Saturday afternoon,
297
00:12:43,054 --> 00:12:45,557
and I went
to the movie theater.
298
00:12:45,557 --> 00:12:49,352
And I see the person to my
left get out a MoviePass card.
299
00:12:49,352 --> 00:12:52,731
And I see two people here
get out a MoviePass card.
300
00:12:52,731 --> 00:12:54,774
And I see people over there,
301
00:12:54,774 --> 00:12:57,152
and they all have
MoviePass cards.
302
00:12:57,152 --> 00:13:00,488
♪ ♪
303
00:13:00,488 --> 00:13:02,615
It was exciting to see
people with the cards,
304
00:13:02,615 --> 00:13:03,783
like, in the wild.
305
00:13:03,783 --> 00:13:05,702
It felt like
I had, like, a secret.
306
00:13:05,702 --> 00:13:09,789
It was like, they don't know
I work at MoviePass.
307
00:13:09,789 --> 00:13:11,541
There was more
than one occasion
308
00:13:11,541 --> 00:13:13,710
where someone's MoviePass card
wasn't working at the theater,
309
00:13:13,710 --> 00:13:16,046
and I was like,
can I please help you?
310
00:13:16,046 --> 00:13:17,839
Like, I actually work there.
311
00:13:17,839 --> 00:13:20,425
I troubleshooted
whatever the issue was.
312
00:13:21,926 --> 00:13:25,096
When we saw the growth,
I mean, I was blown away,
313
00:13:25,096 --> 00:13:27,432
and I was excited
to see the promise
314
00:13:27,432 --> 00:13:29,601
of the model validated.
315
00:13:31,019 --> 00:13:34,689
Ted's team began marketing
it extraordinarily well.
316
00:13:34,689 --> 00:13:38,943
♪ ♪
317
00:13:38,943 --> 00:13:40,695
I always tell Mitch,
it's like we're doing
318
00:13:40,695 --> 00:13:42,113
social re-engineering.
319
00:13:42,113 --> 00:13:44,741
We're taking people
back to the theater.
320
00:13:44,741 --> 00:13:46,284
I'm seeing viral growth.
321
00:13:46,284 --> 00:13:48,661
I'm seeing no need
for paid marketing.
322
00:13:48,661 --> 00:13:52,499
♪ ♪
323
00:13:52,499 --> 00:13:54,334
The word of mouth
is so strong.
324
00:13:54,334 --> 00:13:57,420
♪ ♪
325
00:13:59,923 --> 00:14:02,384
Making MoviePass a household
name was absolutely
326
00:14:02,384 --> 00:14:04,928
one of those things
that we were starting to see
327
00:14:04,928 --> 00:14:06,888
actually happen.
328
00:14:06,888 --> 00:14:08,264
We're, at that time,
329
00:14:08,264 --> 00:14:11,309
the fastest-growing
subscription company
330
00:14:11,309 --> 00:14:13,770
since Spotify.
331
00:14:13,770 --> 00:14:15,855
There was
a retirement community,
332
00:14:15,855 --> 00:14:18,149
The Villages down in Florida,
333
00:14:18,149 --> 00:14:22,362
that actually has a network
of movie theaters.
334
00:14:22,362 --> 00:14:26,032
And I swear, every single
retired person in The Villages
335
00:14:26,032 --> 00:14:27,951
had a MoviePass card.
336
00:14:29,160 --> 00:14:32,831
A guy blamed his, like,
divorce with his wife
337
00:14:32,831 --> 00:14:36,710
on the fact that he loved
using MoviePass so much.
338
00:14:36,710 --> 00:14:41,297
So there were definitely some,
like, wacky, weird complaints.
339
00:14:41,297 --> 00:14:43,883
And just like that, you went
from 20,000 subscribers
340
00:14:43,883 --> 00:14:45,510
to 600,000.
341
00:14:45,510 --> 00:14:47,512
Has it gone up more than that?
That was the end of October.
342
00:14:47,512 --> 00:14:50,181
Oh, yeah, it goes up
every day, you know.
343
00:14:50,181 --> 00:14:52,350
Because of Ted's good idea,
344
00:14:52,350 --> 00:14:56,688
we were getting 100 million
in PR and marketing value
345
00:14:56,688 --> 00:14:59,399
and probably more each month.
346
00:14:59,399 --> 00:15:01,401
That made me want
to continue working.
347
00:15:01,401 --> 00:15:05,196
That made me want to focus on
my work and do well, you know.
348
00:15:05,196 --> 00:15:07,365
But while the phenomenon
is going on out there,
349
00:15:07,365 --> 00:15:10,702
you're just kind of,
like, blind to it
350
00:15:10,702 --> 00:15:13,830
until we reached
the million mark.
351
00:15:13,830 --> 00:15:17,042
And I knew that
was happening because I had
352
00:15:17,042 --> 00:15:19,002
friends and family
who were like,
353
00:15:19,002 --> 00:15:20,712
did you hear about MoviePass?
354
00:15:20,712 --> 00:15:22,297
I'm like, I work there.
You know?
355
00:15:22,297 --> 00:15:24,424
They're like, you do?
I'm like, yeah, I do.
356
00:15:24,424 --> 00:15:27,552
I had a cousin. She's like,
I love your product.
357
00:15:27,552 --> 00:15:29,929
Oh, my God, me and my
boyfriend go all the time.
358
00:15:29,929 --> 00:15:33,558
Like, damn, we're a lot bigger
than I knew.
359
00:15:33,558 --> 00:15:34,809
We were signing up
360
00:15:34,809 --> 00:15:38,229
a quarter of a million
new subs every month.
361
00:15:38,229 --> 00:15:42,650
It has hit
1.5 million subscribers.
362
00:15:42,650 --> 00:15:46,196
Mitch and Ted had a goal
based on this trajectory
363
00:15:46,196 --> 00:15:49,240
that they wanted to get
to 5 million customers.
364
00:15:49,240 --> 00:15:50,867
I was like, why are
you running so fast?
365
00:15:50,867 --> 00:15:52,327
You're out in front of--
366
00:15:52,327 --> 00:15:55,580
Just put it on pause
and catch our breath.
367
00:15:55,580 --> 00:15:59,292
They would push back and say,
we know what we're doing.
368
00:15:59,292 --> 00:16:01,294
We got this.
369
00:16:01,294 --> 00:16:03,505
Our plan was never
to have a price point
370
00:16:03,505 --> 00:16:05,173
that's promotional forever.
371
00:16:05,173 --> 00:16:06,925
I think that's
where the business got
372
00:16:06,925 --> 00:16:08,385
into a tricky place.
373
00:16:09,969 --> 00:16:12,555
In my conversations
with Mitch and Ted,
374
00:16:12,555 --> 00:16:14,432
I told them, I said,
375
00:16:14,432 --> 00:16:16,601
we're kind of learning
how to build the plane
376
00:16:16,601 --> 00:16:18,186
in mid-flight
377
00:16:18,186 --> 00:16:21,690
and changing it
from a crop duster
378
00:16:21,690 --> 00:16:25,443
to a 747 that can handle
large volumes of people.
379
00:16:25,443 --> 00:16:29,614
We were not prepared
to keep running at that pace.
380
00:16:29,614 --> 00:16:31,116
I would hear
381
00:16:31,116 --> 00:16:33,535
that Stacy would have
those conversations,
382
00:16:33,535 --> 00:16:36,371
you know, at the bar
after work or offsite,
383
00:16:36,371 --> 00:16:41,001
telling a few of the employees
that this would never work.
384
00:16:41,001 --> 00:16:43,253
He did kind of pull up,
like, a pitch deck
385
00:16:43,253 --> 00:16:45,922
of kind of what he saw
the growth trajectory
386
00:16:45,922 --> 00:16:47,382
of MoviePass looking like.
387
00:16:47,382 --> 00:16:50,510
He just wasn't being
a constructive member
388
00:16:50,510 --> 00:16:51,886
of the team.
389
00:16:51,886 --> 00:16:53,805
I immediately
kind of perceived
390
00:16:53,805 --> 00:16:56,975
that Stacy was
this impressive person
391
00:16:56,975 --> 00:16:59,686
that I had no clue
how he kind of fit
392
00:16:59,686 --> 00:17:01,396
into the landscape
of MoviePass.
393
00:17:01,396 --> 00:17:03,189
A lot of times when
they talk about MoviePass,
394
00:17:03,189 --> 00:17:06,317
you usually get a picture
of Mitch and Ted.
395
00:17:07,944 --> 00:17:10,780
And that was, like, the thing
that was, like, the spread
396
00:17:10,780 --> 00:17:13,366
to the media, right?
397
00:17:13,366 --> 00:17:18,872
MoviePass founders,
Mitch and Ted.
398
00:17:18,872 --> 00:17:21,082
But that's definitely
not the case.
399
00:17:21,082 --> 00:17:24,210
That's Stacy and Hamet.
400
00:17:24,210 --> 00:17:27,088
Stacy and Hamet had built
this company
401
00:17:27,088 --> 00:17:29,174
from the ground up since 2011.
402
00:17:29,174 --> 00:17:32,135
And when it finally...
403
00:17:32,135 --> 00:17:36,181
found its groove
with pop culture,
404
00:17:36,181 --> 00:17:38,850
it had already been taken over
by two men,
405
00:17:38,850 --> 00:17:42,228
Mitch Lowe and Ted Farnsworth.
406
00:17:42,228 --> 00:17:43,855
Which is funny, right?
407
00:17:43,855 --> 00:17:45,940
You start thinking
about it, right?
408
00:17:45,940 --> 00:17:47,525
Like, two Black guys
come up with an app.
409
00:17:47,525 --> 00:17:50,403
They don't get any credit,
but the two white guys do.
410
00:17:50,403 --> 00:17:52,822
[sighs]
411
00:17:52,822 --> 00:17:54,949
It was hard.
412
00:17:54,949 --> 00:17:59,537
All of this
was part of a bigger story.
413
00:18:08,463 --> 00:18:11,883
I grew up in Houston, Texas...
414
00:18:11,883 --> 00:18:13,551
born and raised.
415
00:18:13,551 --> 00:18:16,388
And, you know, I think
that it was really simple.
416
00:18:16,388 --> 00:18:20,058
Treat others how you'd want
to be treated and love God.
417
00:18:20,058 --> 00:18:23,311
[soft music]
418
00:18:23,311 --> 00:18:25,480
♪ ♪
419
00:18:25,480 --> 00:18:28,900
One day, I went to see
"Blade Runner."
420
00:18:30,819 --> 00:18:32,946
[dramatic music]
421
00:18:32,946 --> 00:18:35,740
I'd never seen
anything like that.
422
00:18:35,740 --> 00:18:37,409
And all I knew is,
423
00:18:37,409 --> 00:18:40,328
whatever that is,
I want to do that.
424
00:18:42,080 --> 00:18:44,207
I graduated in 1985.
425
00:18:44,207 --> 00:18:46,751
I went out to LA.
426
00:18:46,751 --> 00:18:50,005
And I would go on auditions.
427
00:18:50,005 --> 00:18:53,591
This one particular one,
the line was--
428
00:18:53,591 --> 00:18:55,260
it's HBO. Can I curse?
429
00:18:55,260 --> 00:18:57,053
Yeah, you can say
whatever you want, really.
430
00:18:57,053 --> 00:18:58,388
[chuckles]
The line was,
431
00:18:58,388 --> 00:19:00,098
"Give me
your motherfucking money!"
432
00:19:00,098 --> 00:19:01,683
I kept screwing up the line.
433
00:19:01,683 --> 00:19:04,269
Yo, give me
the motherfucking car keys!
434
00:19:04,269 --> 00:19:05,937
Give me
your motherfucking car!
435
00:19:05,937 --> 00:19:07,188
Give me
your motherfucking money
436
00:19:07,188 --> 00:19:08,773
and the keys!
437
00:19:08,773 --> 00:19:10,608
And this white guy
438
00:19:10,608 --> 00:19:12,610
comes out from behind the tape
and says, no.
439
00:19:12,610 --> 00:19:15,530
See, you have to hold
your hand like this.
440
00:19:15,530 --> 00:19:17,699
And he's explaining to me
how to be a thug.
441
00:19:17,699 --> 00:19:19,159
And it was just--
442
00:19:19,159 --> 00:19:20,618
I just left.
443
00:19:20,618 --> 00:19:23,288
I was like,
this isn't going to work.
444
00:19:23,288 --> 00:19:26,416
Music was always a part of me.
445
00:19:26,416 --> 00:19:29,544
I was actually
in a Rush cover band.
446
00:19:29,544 --> 00:19:32,172
[Rush's "Spirit of the Radio"
playing]
447
00:19:32,172 --> 00:19:34,758
One of my favorite
Rush songs to cover
448
00:19:34,758 --> 00:19:37,469
was "Spirit of the Radio."
449
00:19:37,469 --> 00:19:40,805
both: ♪ Begin the day
with a friendly voice ♪
450
00:19:40,805 --> 00:19:44,559
♪ A companion unobtrusive ♪
451
00:19:44,559 --> 00:19:46,269
Anyway, so...
452
00:19:46,269 --> 00:19:48,188
I got a call
from one of my friends.
453
00:19:48,188 --> 00:19:49,856
Motown was hiring.
454
00:19:49,856 --> 00:19:52,150
- ♪ So we come ♪
- ♪ Oh, oh ♪
455
00:19:52,150 --> 00:19:56,196
♪ To the end of the road ♪
456
00:19:56,196 --> 00:19:57,489
I worked my way up
457
00:19:57,489 --> 00:19:59,324
to product manager
for Boyz II Men.
458
00:19:59,324 --> 00:20:02,327
Their biggest hit single
was "End of the Road."
459
00:20:02,327 --> 00:20:06,164
Every high-school dance,
you put on Boyz II Men.
460
00:20:06,164 --> 00:20:08,958
They were like
the frickin' Beatles.
461
00:20:11,336 --> 00:20:14,756
When I was 25,
they hired me at Miramax,
462
00:20:14,756 --> 00:20:17,884
and I became the
vice president of marketing.
463
00:20:17,884 --> 00:20:22,514
I had grossed more than
$3 billion for studios.
464
00:20:22,514 --> 00:20:25,183
I was "Hollywood Reporter"
30 under 30.
465
00:20:25,183 --> 00:20:27,936
It's like I didn't just fall
off the truck.
466
00:20:29,562 --> 00:20:32,774
25 years ago,
I went to Sundance.
467
00:20:32,774 --> 00:20:34,859
I talked
to the head of the festival
468
00:20:34,859 --> 00:20:38,613
about helping them show
more films by people of color.
469
00:20:38,613 --> 00:20:41,491
They said if there were more
films that were good enough,
470
00:20:41,491 --> 00:20:43,743
they would show them.
471
00:20:43,743 --> 00:20:45,995
That just wasn't
a good-enough answer.
472
00:20:45,995 --> 00:20:49,708
So I ended up creating
the Urbanworld Film Festival.
473
00:20:50,917 --> 00:20:55,005
Our first festival was 1997.
474
00:20:55,005 --> 00:20:56,631
Today Urbanworld
475
00:20:56,631 --> 00:21:00,135
is one of the largest
festivals in the world.
476
00:21:00,135 --> 00:21:02,220
We premiered
more number-one films
477
00:21:02,220 --> 00:21:04,556
than any
North American festival.
478
00:21:04,556 --> 00:21:06,391
Such a big part
of my cinematic life.
479
00:21:06,391 --> 00:21:11,104
It's the festival that
fostered what I'm doing now.
480
00:21:11,104 --> 00:21:13,064
Stacy gave Black filmmakers,
481
00:21:13,064 --> 00:21:15,483
filmmakers that appealed
to urban markets,
482
00:21:15,483 --> 00:21:18,403
Latino markets, a place to
actually exhibit their films,
483
00:21:18,403 --> 00:21:20,572
and that's something that
hadn't been done before.
484
00:21:20,572 --> 00:21:22,782
With Urbanworld Film Festival,
485
00:21:22,782 --> 00:21:24,159
he found a great niche.
486
00:21:24,159 --> 00:21:25,577
He understood,
487
00:21:25,577 --> 00:21:28,955
find that customer, because
all you need is one niche.
488
00:21:28,955 --> 00:21:30,582
And those people,
489
00:21:30,582 --> 00:21:32,917
because they've been neglected
for so long,
490
00:21:32,917 --> 00:21:37,464
when they finally feel like
somebody just respects them,
491
00:21:37,464 --> 00:21:39,758
man, they're going to be
a customer forever.
492
00:21:39,758 --> 00:21:42,385
There were a lot
of subscription models
493
00:21:42,385 --> 00:21:44,220
starting to be on the horizon,
494
00:21:44,220 --> 00:21:46,598
from Netflix to Pandora.
495
00:21:46,598 --> 00:21:49,142
And I thought,
can we make a subscription
496
00:21:49,142 --> 00:21:50,435
out of Urbanworld?
497
00:21:50,435 --> 00:21:53,855
That was the origin
of MoviePass.
498
00:21:55,482 --> 00:21:58,777
I went around for five years,
499
00:21:58,777 --> 00:22:01,738
and I couldn't get anybody
to invest.
500
00:22:01,738 --> 00:22:05,241
A friend of mine
who's a movie producer says,
501
00:22:05,241 --> 00:22:07,327
have you talked to Hamet Watt?
502
00:22:07,327 --> 00:22:10,455
I think you and that brother
should talk.
503
00:22:10,455 --> 00:22:13,792
I was starting companies
and/or investing in companies.
504
00:22:13,792 --> 00:22:16,711
And that's all I've ever done
my whole career.
505
00:22:16,711 --> 00:22:19,005
I got very excited
about the opportunity
506
00:22:19,005 --> 00:22:20,674
in the theatrical window
507
00:22:20,674 --> 00:22:23,134
because I saw
that this was the part
508
00:22:23,134 --> 00:22:26,596
of the entertainment ecosystem
that innovated the least.
509
00:22:26,596 --> 00:22:28,306
Stacy and I immediately
510
00:22:28,306 --> 00:22:30,350
were finishing
each other's sentences,
511
00:22:30,350 --> 00:22:32,018
and we locked ourselves
in the room with whiteboards
512
00:22:32,018 --> 00:22:34,688
and started talking about
the world of subscription.
513
00:22:34,688 --> 00:22:36,439
We should do this.
We should do that.
514
00:22:36,439 --> 00:22:37,941
We should do this.
515
00:22:37,941 --> 00:22:40,402
The next thing you know, we
were putting together a model
516
00:22:40,402 --> 00:22:43,363
and a plan to build what we
were hoping would become
517
00:22:43,363 --> 00:22:46,157
the largest moviegoing
subscription business
518
00:22:46,157 --> 00:22:47,409
ever conceived.
519
00:22:47,409 --> 00:22:50,578
[upbeat music]
520
00:22:50,578 --> 00:22:52,580
♪ ♪
521
00:22:52,580 --> 00:22:56,084
Hamet said, I can raise
money for this in a month.
522
00:22:56,084 --> 00:22:58,503
I was like, yeah, right.
523
00:22:58,503 --> 00:23:00,797
And he said, if I can,
do we have a deal?
524
00:23:00,797 --> 00:23:02,048
Can we be partners?
525
00:23:02,048 --> 00:23:03,466
And I said, sure.
526
00:23:03,466 --> 00:23:07,721
So we raised $4 million
pretty early out of the gates.
527
00:23:10,015 --> 00:23:13,810
I remember the first hire
that we made at MoviePass.
528
00:23:13,810 --> 00:23:15,687
I remember sending the note,
welcome to MoviePass.
529
00:23:15,687 --> 00:23:18,398
And that was the first
of many hires that we made.
530
00:23:18,398 --> 00:23:22,485
It was a really
family-oriented atmosphere.
531
00:23:22,485 --> 00:23:24,070
We had a lot of fun.
532
00:23:24,070 --> 00:23:27,365
And we knew that this
was a special company.
533
00:23:27,365 --> 00:23:30,201
Very first version
of MoviePass,
534
00:23:30,201 --> 00:23:33,496
we built through
movietickets.com.
535
00:23:33,496 --> 00:23:35,790
They were part owned by AMC.
536
00:23:35,790 --> 00:23:38,960
That allowed us
to access the tickets.
537
00:23:38,960 --> 00:23:41,004
Everybody loved it.
538
00:23:41,004 --> 00:23:43,631
And we did
the Fourth of July launch.
539
00:23:43,631 --> 00:23:45,800
Here we go!
Here we go!
540
00:23:45,800 --> 00:23:48,386
"Transformers,"
the Michael Bay film.
541
00:23:48,386 --> 00:23:51,723
You're coming home,
old friend.
542
00:23:51,723 --> 00:23:54,267
We had all the press there.
543
00:23:54,267 --> 00:23:56,561
We showed them
how the product worked.
544
00:23:56,561 --> 00:23:58,063
We started the screening,
545
00:23:58,063 --> 00:24:01,399
and the press agent
brought us out and says,
546
00:24:01,399 --> 00:24:03,777
hey, guys,
something's happening.
547
00:24:03,777 --> 00:24:08,698
AMC is really upset
about this MoviePass thing.
548
00:24:09,908 --> 00:24:12,994
AMC released
a statement saying,
549
00:24:12,994 --> 00:24:15,997
whatever this was, they were
not in support of it.
550
00:24:15,997 --> 00:24:17,415
Oh, my gosh.
551
00:24:17,415 --> 00:24:20,752
The biggest player
in the industry is not happy.
552
00:24:20,752 --> 00:24:24,005
We got a cease and desist
from AMC.
553
00:24:24,005 --> 00:24:25,507
The music stopped.
554
00:24:25,507 --> 00:24:28,677
So we were literally born
on a Thursday,
555
00:24:28,677 --> 00:24:32,514
and we died on a Friday
before we ever even launched.
556
00:24:32,514 --> 00:24:34,057
After you get shut down,
557
00:24:34,057 --> 00:24:37,143
you start to realize that you
need to be independent
558
00:24:37,143 --> 00:24:39,771
or as independent as possible.
559
00:24:39,771 --> 00:24:41,606
The problem we needed
to solve at that time
560
00:24:41,606 --> 00:24:44,359
was just being able
to access tickets.
561
00:24:44,359 --> 00:24:46,569
Since the theaters
weren't allowing us
562
00:24:46,569 --> 00:24:47,987
to go through their system,
563
00:24:47,987 --> 00:24:50,615
we had no way into doing
business with them
564
00:24:50,615 --> 00:24:52,534
unless we built
our own system.
565
00:24:52,534 --> 00:24:55,745
That's when...
566
00:24:55,745 --> 00:24:59,749
the red card came to be born.
567
00:24:59,749 --> 00:25:01,459
You would go to a theater
568
00:25:01,459 --> 00:25:03,128
where you wanted
to see a movie.
569
00:25:03,128 --> 00:25:05,755
You would look in the app,
pick a showtime.
570
00:25:05,755 --> 00:25:08,008
Your app would verify
571
00:25:08,008 --> 00:25:10,135
that you were actually
at the theater
572
00:25:10,135 --> 00:25:11,720
that you wanted a ticket at.
573
00:25:11,720 --> 00:25:16,599
And then it will load funds
to purchase a ticket.
574
00:25:16,599 --> 00:25:18,018
At that time,
no one had figured out--
575
00:25:18,018 --> 00:25:20,103
And that's why we got a patent
granted on it.
576
00:25:20,103 --> 00:25:22,147
No one had figured out
a way to do that,
577
00:25:22,147 --> 00:25:24,149
to use location services
578
00:25:24,149 --> 00:25:25,984
to authenticate
579
00:25:25,984 --> 00:25:29,988
a presence in an environment
that would unlock access.
580
00:25:29,988 --> 00:25:33,992
♪ ♪
581
00:25:33,992 --> 00:25:37,829
Stacy and Hamet
had solved the problem of,
582
00:25:37,829 --> 00:25:40,623
how do we get access
to enough inventory?
583
00:25:40,623 --> 00:25:42,792
That was the secret sauce
for me.
584
00:25:42,792 --> 00:25:44,544
I think Stacy had sent me one.
585
00:25:44,544 --> 00:25:47,464
[laughs] And I tested it
to make sure that it worked.
586
00:25:47,464 --> 00:25:48,798
And it did.
587
00:25:48,798 --> 00:25:50,592
Like, I was able
to go to a theater
588
00:25:50,592 --> 00:25:53,553
and, you know, check in
on the app, drive the card.
589
00:25:53,553 --> 00:25:56,473
And, you know, that
was really why I'm like,
590
00:25:56,473 --> 00:25:58,141
oh, this can't go away.
591
00:25:58,141 --> 00:25:59,684
This is a great idea.
592
00:25:59,684 --> 00:26:02,312
We were running out
of capital.
593
00:26:02,312 --> 00:26:05,648
Chris said, I really like what
you guys are trying to build.
594
00:26:05,648 --> 00:26:07,525
And I'm going to give
you guys a million dollars
595
00:26:07,525 --> 00:26:09,694
to keep running the company.
596
00:26:09,694 --> 00:26:13,573
He, that day, wired
half a million dollars
597
00:26:13,573 --> 00:26:15,700
into our accounts.
598
00:26:15,700 --> 00:26:17,869
And I remember
saying to him,
599
00:26:17,869 --> 00:26:20,872
I said, Chris, if you come
into this deal,
600
00:26:20,872 --> 00:26:23,541
we're going to do
a fair deal with you
601
00:26:23,541 --> 00:26:26,544
in terms of the economics
that you'll get.
602
00:26:26,544 --> 00:26:29,422
But you'll also be
our partner.
603
00:26:29,422 --> 00:26:31,174
The terms he gave us
604
00:26:31,174 --> 00:26:35,512
were actually more favorable
than what we had discussed.
605
00:26:35,512 --> 00:26:38,765
And then Chris put
another investment in.
606
00:26:38,765 --> 00:26:41,810
That is really what gave us
the foundation
607
00:26:41,810 --> 00:26:43,770
to start to do a lot
of the stuff
608
00:26:43,770 --> 00:26:45,188
that we ultimately did.
609
00:26:45,188 --> 00:26:47,857
Stacy, first of all, how
exactly is this going to work?
610
00:26:47,857 --> 00:26:49,317
Pretty much
wherever you are,
611
00:26:49,317 --> 00:26:52,570
you're going to be able to go
to movies using MoviePass.
612
00:26:52,570 --> 00:26:55,240
We had a product now
that no one could stop.
613
00:26:57,117 --> 00:27:01,037
I remember trying to make
an appeal to Gerry Lopez,
614
00:27:01,037 --> 00:27:03,081
the CEO of AMC.
615
00:27:03,081 --> 00:27:05,250
We needed to make money,
obviously,
616
00:27:05,250 --> 00:27:06,501
as a subscription service.
617
00:27:06,501 --> 00:27:08,837
And part of that
was going to come
618
00:27:08,837 --> 00:27:11,923
from a partnership
with theaters.
619
00:27:11,923 --> 00:27:14,092
The holy grail
is you got to get
620
00:27:14,092 --> 00:27:15,760
what we called
"butts in seats," right?
621
00:27:15,760 --> 00:27:18,096
You got to get people
to come to the theater.
622
00:27:18,096 --> 00:27:19,931
What Stacy and Hamet
were presenting
623
00:27:19,931 --> 00:27:21,933
was a very innovative
and very different idea
624
00:27:21,933 --> 00:27:24,060
on how to drive people
to the movie theater.
625
00:27:24,060 --> 00:27:28,606
We said, we will improve
moviegoing by 60%.
626
00:27:28,606 --> 00:27:31,109
And if we do that,
all we want to do
627
00:27:31,109 --> 00:27:33,695
is participate
in some of that upside.
628
00:27:33,695 --> 00:27:36,448
Stacy and Hamet
did a fantastic job
629
00:27:36,448 --> 00:27:39,284
of teeing up a relationship
with AMC.
630
00:27:39,284 --> 00:27:40,285
They were visionaries,
631
00:27:40,285 --> 00:27:42,370
and they wanted to be
visionaries in the space.
632
00:27:42,370 --> 00:27:44,956
They knew that the historical
use of movie theaters
633
00:27:44,956 --> 00:27:46,958
was going to change
in radical ways.
634
00:27:46,958 --> 00:27:48,835
Their thinking was clear.
635
00:27:48,835 --> 00:27:51,588
It complemented all
of our strategic direction.
636
00:27:51,588 --> 00:27:53,798
Frankly, a no-brainer,
because if it works,
637
00:27:53,798 --> 00:27:56,551
we're going to want
to go national with it.
638
00:27:56,551 --> 00:27:59,095
So, we ran
a double-blind survey
639
00:27:59,095 --> 00:28:02,807
over a two-year period
at AMC exclusively.
640
00:28:02,807 --> 00:28:07,479
And we confirmed
there was 112% increase--
641
00:28:07,479 --> 00:28:08,813
I can still see that number--
642
00:28:08,813 --> 00:28:12,359
112% increase
in moviegoing behavior
643
00:28:12,359 --> 00:28:15,487
after people joined MoviePass,
644
00:28:15,487 --> 00:28:18,156
more than we had estimated.
645
00:28:18,156 --> 00:28:19,282
It could work.
646
00:28:19,282 --> 00:28:21,242
The attendance curve
could be bent in such a way
647
00:28:21,242 --> 00:28:23,203
that you could get
incremental moviegoing.
648
00:28:23,203 --> 00:28:25,163
This thing is a win-win-win
for the studios,
649
00:28:25,163 --> 00:28:27,248
the theater owners,
and the consumer.
650
00:28:28,750 --> 00:28:32,003
And Gerry agreed
to roll MoviePass out
651
00:28:32,003 --> 00:28:34,839
in partnership
with AMC nationwide.
652
00:28:34,839 --> 00:28:36,841
We were thrilled.
653
00:28:36,841 --> 00:28:38,802
The future was finally
going to happen.
654
00:28:38,802 --> 00:28:41,971
[dramatic music]
655
00:28:41,971 --> 00:28:44,599
♪ ♪
656
00:28:44,599 --> 00:28:47,852
But Gerry made a decision
to move on
657
00:28:47,852 --> 00:28:49,813
to another company.
658
00:28:49,813 --> 00:28:51,856
The new CEO was a guy
named Adam Aron,
659
00:28:51,856 --> 00:28:55,568
who was just
far less receptive.
660
00:28:55,568 --> 00:28:57,195
He gave us a hard no
661
00:28:57,195 --> 00:29:00,699
that he liked the idea
and believed in subscription,
662
00:29:00,699 --> 00:29:03,034
but said,
we'd rather do it ourselves.
663
00:29:03,034 --> 00:29:05,453
I didn't know
what we were going to do.
664
00:29:05,453 --> 00:29:08,123
I honestly was like,
we're done.
665
00:29:08,123 --> 00:29:11,918
♪ ♪
666
00:29:11,918 --> 00:29:14,212
All of these investors
that were kind of looking
667
00:29:14,212 --> 00:29:16,047
like they were
about to come in,
668
00:29:16,047 --> 00:29:18,049
everybody started slowing down.
669
00:29:18,049 --> 00:29:22,012
And it was, if theaters
won't invest in this concept
670
00:29:22,012 --> 00:29:24,639
and studios won't invest
in this concept,
671
00:29:24,639 --> 00:29:26,808
why should we?
672
00:29:26,808 --> 00:29:29,269
It wasn't that we
weren't ringing on the doors.
673
00:29:29,269 --> 00:29:32,397
We knew everybody.
We had met with everyone.
674
00:29:32,397 --> 00:29:34,065
Of all of the industries
675
00:29:34,065 --> 00:29:36,109
I've ever spent time in
in my career,
676
00:29:36,109 --> 00:29:38,611
I found moviegoing to be one
of the most insular, right?
677
00:29:38,611 --> 00:29:40,405
If you're not part
of the community,
678
00:29:40,405 --> 00:29:41,448
if you're not an insider,
679
00:29:41,448 --> 00:29:43,074
you're automatically
an outsider.
680
00:29:43,074 --> 00:29:44,826
Well, all industries
have a little bit of that.
681
00:29:44,826 --> 00:29:46,077
But in Hollywood,
682
00:29:46,077 --> 00:29:48,038
I found that that was probably
the worst of all.
683
00:29:48,038 --> 00:29:53,543
♪ ♪
684
00:29:53,543 --> 00:29:55,670
The cash burn
was still significant.
685
00:29:55,670 --> 00:29:57,964
And so I was providing
some more financing
686
00:29:57,964 --> 00:30:00,216
because I didn't want
to see it die.
687
00:30:00,216 --> 00:30:04,554
Somehow, Chris got connected
with Mitch.
688
00:30:04,554 --> 00:30:07,974
Mitch was starting to suggest
689
00:30:07,974 --> 00:30:12,687
that his involvement would help
unlock some more capital.
690
00:30:12,687 --> 00:30:14,814
Chris said,
I can't keep funding
691
00:30:14,814 --> 00:30:16,775
unless we make a change.
692
00:30:16,775 --> 00:30:21,613
And I'd like to bring in
Mitch Lowe as a CEO.
693
00:30:21,613 --> 00:30:22,989
I got on a red-eye,
694
00:30:22,989 --> 00:30:25,116
and I flew out to have
the conversation in person
695
00:30:25,116 --> 00:30:27,952
and to say, look,
this isn't working this way.
696
00:30:27,952 --> 00:30:31,456
We've got to go with Mitch
to kind of amplify
697
00:30:31,456 --> 00:30:34,000
some of the very good stuff
that we're doing.
698
00:30:34,000 --> 00:30:35,919
And I know you're not going
to be happy with that.
699
00:30:35,919 --> 00:30:37,295
But, you know,
700
00:30:37,295 --> 00:30:40,256
I think that you guys
could be good partners,
701
00:30:40,256 --> 00:30:42,717
but we need to put Mitch
in charge at this point
702
00:30:42,717 --> 00:30:46,137
and try to turbocharge
the operations here.
703
00:30:46,137 --> 00:30:50,975
He said, you can either
go with this, or I'm out.
704
00:30:50,975 --> 00:30:54,437
And I just didn't know
where we could find
705
00:30:54,437 --> 00:30:56,815
an ally that we had in Chris.
706
00:30:56,815 --> 00:30:58,692
I rolled with that decision,
707
00:30:58,692 --> 00:31:00,652
and that was a decision
that I made,
708
00:31:00,652 --> 00:31:02,904
to go in that direction.
709
00:31:02,904 --> 00:31:04,739
Stacy still had a role.
710
00:31:04,739 --> 00:31:06,408
I still had a role
on the board.
711
00:31:06,408 --> 00:31:09,494
And Mitch was going to be
some potentially new blood
712
00:31:09,494 --> 00:31:11,955
that might provide
713
00:31:11,955 --> 00:31:14,708
some gray hair and optics.
714
00:31:14,708 --> 00:31:16,167
Stacy and I were brothers
715
00:31:16,167 --> 00:31:17,919
in this journey
from the beginning.
716
00:31:17,919 --> 00:31:19,713
There were some concerns
717
00:31:19,713 --> 00:31:23,216
that both he and I had
around Mitch.
718
00:31:23,216 --> 00:31:25,635
When he joined,
719
00:31:25,635 --> 00:31:28,763
the board structure changed.
720
00:31:28,763 --> 00:31:31,141
Hamet and I were two seats.
721
00:31:31,141 --> 00:31:34,769
Chris was a seat,
then Mitch was a seat,
722
00:31:34,769 --> 00:31:37,981
and then Chris
had another seat.
723
00:31:37,981 --> 00:31:41,067
So you had
this shift of power.
724
00:31:42,444 --> 00:31:44,362
There were many times
that Stacy and I were talking
725
00:31:44,362 --> 00:31:46,781
to each other
about just keeping the faith
726
00:31:46,781 --> 00:31:48,700
and keeping on going.
727
00:31:48,700 --> 00:31:55,749
♪ ♪
728
00:31:55,749 --> 00:31:59,753
If you have a white male
729
00:31:59,753 --> 00:32:02,630
with more gray hair,
730
00:32:02,630 --> 00:32:07,302
that could inspire other
white males with white hair
731
00:32:07,302 --> 00:32:10,722
to be more comfortable
investing.
732
00:32:10,722 --> 00:32:12,766
It's a factor
that we considered
733
00:32:12,766 --> 00:32:15,727
through the entire
entrepreneurial journey.
734
00:32:17,187 --> 00:32:20,106
The stats are pretty clear,
especially back then.
735
00:32:20,106 --> 00:32:22,359
Women and minorities
736
00:32:22,359 --> 00:32:27,155
were only accessing 1% to 3%
of all venture capital.
737
00:32:27,155 --> 00:32:29,532
So that's
a pretty small number.
738
00:32:29,532 --> 00:32:33,244
And Hamet and I were
seasoned entrepreneurs
739
00:32:33,244 --> 00:32:36,331
and had been around and had
very successful track records.
740
00:32:36,331 --> 00:32:39,793
For Black founders,
Black entrepreneurs,
741
00:32:39,793 --> 00:32:42,545
no matter
what your business is,
742
00:32:42,545 --> 00:32:45,382
the access to capital...
743
00:32:45,382 --> 00:32:46,841
there's no equity.
744
00:32:46,841 --> 00:32:48,385
It's a challenge
for every entrepreneur,
745
00:32:48,385 --> 00:32:50,303
but it's much more
of a challenge
746
00:32:50,303 --> 00:32:53,431
for Black entrepreneurs
than it is for anyone else.
747
00:32:53,431 --> 00:32:57,977
There's certain stereotypes
that society has
748
00:32:57,977 --> 00:33:00,689
of what a successful
entrepreneur looks like,
749
00:33:00,689 --> 00:33:02,107
and we didn't look like that.
750
00:33:02,107 --> 00:33:03,983
And it's hard
to tell sometimes
751
00:33:03,983 --> 00:33:06,111
whether that lack
of receptivity
752
00:33:06,111 --> 00:33:08,738
is a function of doing
something disruptive
753
00:33:08,738 --> 00:33:09,948
in an industry
754
00:33:09,948 --> 00:33:12,992
or dealing with two brothers
755
00:33:12,992 --> 00:33:15,620
trying to do something
disruptive in an industry.
756
00:33:15,620 --> 00:33:18,623
A lot of times...
757
00:33:18,623 --> 00:33:20,000
African-American,
758
00:33:20,000 --> 00:33:22,085
because we don't have
all the opportunity,
759
00:33:22,085 --> 00:33:26,089
we're so excited that somebody
is believing in us,
760
00:33:26,089 --> 00:33:28,883
and sometimes
we're on our last breath,
761
00:33:28,883 --> 00:33:30,093
we take the money,
762
00:33:30,093 --> 00:33:32,053
and we don't ask
what you want out of it.
763
00:33:32,053 --> 00:33:35,181
Then whatever you get
is at a predatory level.
764
00:33:35,181 --> 00:33:38,476
So you're set up to fail.
765
00:33:38,476 --> 00:33:42,105
Mitch was brought in
as the CEO.
766
00:33:42,105 --> 00:33:46,151
Mitch came out to New York
to meet with the team.
767
00:33:46,151 --> 00:33:49,988
He said, so you're
on probation for a while,
768
00:33:49,988 --> 00:33:51,698
and I'm going to see
how you are
769
00:33:51,698 --> 00:33:54,993
and determine whether or not
I'm going to keep you.
770
00:33:54,993 --> 00:33:57,620
Oh, God.
These old stories.
771
00:33:59,289 --> 00:34:01,458
[scoffs]
772
00:34:01,458 --> 00:34:04,210
This is a company,
not a family.
773
00:34:04,210 --> 00:34:08,423
And, you know, we're here to
make the company successful,
774
00:34:08,423 --> 00:34:12,844
and everything has got to,
you know, revolve around that.
775
00:34:12,844 --> 00:34:15,013
I thought
that it was arrogant.
776
00:34:15,013 --> 00:34:17,390
I thought
that it was mean-spirited.
777
00:34:17,390 --> 00:34:19,392
I thought it was unnecessary.
778
00:34:19,392 --> 00:34:21,853
While Hamet
was a co-founder,
779
00:34:21,853 --> 00:34:24,356
he really was not active
at all.
780
00:34:24,356 --> 00:34:27,692
With Stacy, I realized,
you know, Stacy knows
781
00:34:27,692 --> 00:34:29,235
the ins and outs.
782
00:34:29,235 --> 00:34:31,029
He knows the software.
783
00:34:31,029 --> 00:34:35,033
And so I moved Stacy
from being CEO
784
00:34:35,033 --> 00:34:37,202
to being
chief operating officer.
785
00:34:38,495 --> 00:34:41,247
I'm just not going to say
786
00:34:41,247 --> 00:34:43,416
what came through my mind
at that moment.
787
00:34:43,416 --> 00:34:46,044
But it's like that sketch
from "Key & Peele"--
788
00:34:46,044 --> 00:34:47,879
"The Anger Translator."
789
00:34:47,879 --> 00:34:49,547
Good evening,
my fellow Americans.
790
00:34:49,547 --> 00:34:53,051
With me as always is
my anger translator, Luther.
791
00:34:53,051 --> 00:34:56,471
I hate you!
792
00:34:56,471 --> 00:34:57,806
86, you [bleep]--
793
00:34:57,806 --> 00:35:00,767
The anger translator saying
what he really wants to say.
794
00:35:00,767 --> 00:35:02,394
I was respectful to him.
795
00:35:02,394 --> 00:35:04,938
I said, I'm grateful
that you're here.
796
00:35:04,938 --> 00:35:06,690
I'm looking forward
to working with you.
797
00:35:06,690 --> 00:35:07,816
And that's what I said.
798
00:35:07,816 --> 00:35:10,235
I hear your voices,
and I'm aware of your concerns.
799
00:35:10,235 --> 00:35:12,070
So maybe if you can chill
the hell out
800
00:35:12,070 --> 00:35:13,947
for, like, a second,
then maybe I can focus
801
00:35:13,947 --> 00:35:15,615
on some [bleep], you know?
802
00:35:15,615 --> 00:35:18,368
♪ ♪
803
00:35:18,368 --> 00:35:21,371
I had an expectation that
Mitch was going to provide
804
00:35:21,371 --> 00:35:22,956
more financing to the company
805
00:35:22,956 --> 00:35:25,709
and that that was gonna take
some of the burden off of me.
806
00:35:25,709 --> 00:35:27,961
And that did not happen.
807
00:35:27,961 --> 00:35:31,673
And that's when HMNY
and Ted came in.
808
00:35:31,673 --> 00:35:33,675
Ted was just slick.
809
00:35:33,675 --> 00:35:38,096
That's the best word I could
come up with, very...
810
00:35:38,096 --> 00:35:39,764
just slick.
811
00:35:39,764 --> 00:35:44,185
We had skepticism around
whether or not HMNY had money.
812
00:35:44,185 --> 00:35:47,564
We had skepticisms
around whether or not
813
00:35:47,564 --> 00:35:50,692
they were credible
from a strategic standpoint--
814
00:35:50,692 --> 00:35:52,861
like, would they be
the right investors to have?
815
00:35:52,861 --> 00:35:55,989
But in terms of the capital,
816
00:35:55,989 --> 00:35:57,949
they actually did have
the capital.
817
00:35:57,949 --> 00:36:00,326
[applause]
818
00:36:00,326 --> 00:36:02,620
The pitch that Ted
and his group were making
819
00:36:02,620 --> 00:36:05,290
was that they would be
able to drive growth.
820
00:36:05,290 --> 00:36:07,667
First, I want to welcome
everybody here in...
821
00:36:07,667 --> 00:36:10,128
There was a hedge fund
that turned out
822
00:36:10,128 --> 00:36:12,964
to be the primary backer
823
00:36:12,964 --> 00:36:16,634
of HMNY--Hudson Bay.
824
00:36:16,634 --> 00:36:19,346
And so the first tranche
of the financing
825
00:36:19,346 --> 00:36:22,432
allowed us to start to do
some really interesting things
826
00:36:22,432 --> 00:36:24,142
that we had never
been able to do
827
00:36:24,142 --> 00:36:25,643
because
of the amount of capital.
828
00:36:25,643 --> 00:36:28,355
[cheers and applause]
829
00:36:28,355 --> 00:36:31,983
[all cheering, screaming]
830
00:36:31,983 --> 00:36:34,486
And the stock
is exploding today
831
00:36:34,486 --> 00:36:37,489
after the CNA team called it
a gold mine.
832
00:36:37,489 --> 00:36:41,534
Right now HMNY is up 21% today
833
00:36:41,534 --> 00:36:43,036
at 2,541.
834
00:36:43,036 --> 00:36:46,206
There was this huge run-up
of the stock,
835
00:36:46,206 --> 00:36:48,625
where a lot of people
were really excited about it.
836
00:36:48,625 --> 00:36:51,753
It got crazy
with Wall Street,
837
00:36:51,753 --> 00:36:53,380
particularly millennials.
838
00:36:53,380 --> 00:36:55,924
This was exactly
what they were looking for.
839
00:36:55,924 --> 00:36:57,926
They had missed out on Netflix.
840
00:36:57,926 --> 00:37:00,345
Put my money in this,
I could become a millionaire,
841
00:37:00,345 --> 00:37:02,013
like all those Netflix
millionaires.
842
00:37:02,013 --> 00:37:03,223
It took off.
843
00:37:03,223 --> 00:37:05,934
Really, the whole excitement
and lure for a retail investor
844
00:37:05,934 --> 00:37:09,020
is getting in on the ground
floor of the next billion,
845
00:37:09,020 --> 00:37:10,271
$10 billion business.
846
00:37:10,271 --> 00:37:12,357
I believe I got in around $9,
847
00:37:12,357 --> 00:37:14,150
and, man, I felt
like a genius.
848
00:37:14,150 --> 00:37:18,405
Shares climbed 146%.
849
00:37:18,405 --> 00:37:20,573
So $9.99, you can watch
as many movies you want.
850
00:37:20,573 --> 00:37:22,367
Fuck,
you can't beat that, man.
851
00:37:22,367 --> 00:37:24,577
That's better than Redbox.
Fuck Redbox.
852
00:37:24,577 --> 00:37:27,580
Now is an excellent,
excellent time
853
00:37:27,580 --> 00:37:29,290
to buy into HMNY.
854
00:37:29,290 --> 00:37:31,668
There's no denying
that it was a real rocket ship
855
00:37:31,668 --> 00:37:33,545
when it came
to subscriber growth.
856
00:37:33,545 --> 00:37:35,797
And that was
the number-one metric
857
00:37:35,797 --> 00:37:38,967
that a lot of people
were paying attention to.
858
00:37:38,967 --> 00:37:40,844
And that was just
through the roof.
859
00:37:43,430 --> 00:37:46,474
It was pretty exciting
860
00:37:46,474 --> 00:37:49,811
because the stock
was going through the roof.
861
00:37:49,811 --> 00:37:53,815
Public markets were excited
about the user growth.
862
00:37:53,815 --> 00:37:58,319
The stock price climbed
from $2 a share
863
00:37:58,319 --> 00:37:59,863
up to $38 a share.
864
00:37:59,863 --> 00:38:01,740
So the brand was there.
865
00:38:01,740 --> 00:38:04,117
The acknowledgment
in the marketplace
866
00:38:04,117 --> 00:38:06,578
of the value we had created
was there,
867
00:38:06,578 --> 00:38:09,581
but we were paying
for tickets full price.
868
00:38:09,581 --> 00:38:13,585
The average ticket price
was $11.50,
869
00:38:13,585 --> 00:38:16,421
and we were charging
$10 a month.
870
00:38:16,421 --> 00:38:19,507
But people were going
to four movies a month.
871
00:38:19,507 --> 00:38:22,427
We were losing a lot of money.
872
00:38:22,427 --> 00:38:26,139
And so you took
that $25 million,
873
00:38:26,139 --> 00:38:29,100
and you just said, poof.
874
00:38:29,100 --> 00:38:32,687
We had a million users,
and active users, you know,
875
00:38:32,687 --> 00:38:34,606
not just like,
oh, I have a subscription,
876
00:38:34,606 --> 00:38:36,941
but I don't really use it--
no, they were active.
877
00:38:36,941 --> 00:38:38,985
Or some people
were seeing the same movie
878
00:38:38,985 --> 00:38:40,236
six times in a week.
879
00:38:40,236 --> 00:38:41,404
Okay, I will admit it.
880
00:38:41,404 --> 00:38:43,615
I would go see
881
00:38:43,615 --> 00:38:46,618
about a half hour
of "The Avengers"
882
00:38:46,618 --> 00:38:48,828
and then come back
the next day
883
00:38:48,828 --> 00:38:51,956
to see the next hour
of "The Avengers."
884
00:38:51,956 --> 00:38:53,583
And then if I missed a part,
885
00:38:53,583 --> 00:38:55,835
I would go back the next day
886
00:38:55,835 --> 00:38:58,713
to go see the first half
of "The Avengers" again.
887
00:38:58,713 --> 00:39:00,298
Why?
888
00:39:00,298 --> 00:39:03,051
Because I could.
[laughs]
889
00:39:03,051 --> 00:39:06,304
I said, I'm going to go
to watch "Crazy Rich Asians"
890
00:39:06,304 --> 00:39:10,225
every single day for a week
at the theater.
891
00:39:10,225 --> 00:39:12,477
[laughs] Yeah.
892
00:39:12,477 --> 00:39:15,230
I watched "Crazy Rich Asians"
14 times overall.
893
00:39:15,230 --> 00:39:18,233
[gong sounds,
indistinct chatter]
894
00:39:18,233 --> 00:39:19,818
Because they can.
895
00:39:19,818 --> 00:39:21,945
I liked it a lot--it's
a really good romantic comedy,
896
00:39:21,945 --> 00:39:23,822
and not many good romantic
comedies around anymore.
897
00:39:23,822 --> 00:39:27,158
I went probably close
to 20 movies a month.
898
00:39:27,158 --> 00:39:28,868
I wish I could have seen more.
899
00:39:28,868 --> 00:39:30,161
You know, I was engaged,
900
00:39:30,161 --> 00:39:32,455
so I didn't have
a lot of free time.
901
00:39:32,455 --> 00:39:35,750
In total, I went to
the movie theater 428 times.
902
00:39:35,750 --> 00:39:37,419
[laughs]
903
00:39:37,419 --> 00:39:39,879
Don't hate the player,
hate the game.
904
00:39:39,879 --> 00:39:42,507
Every board meeting
I was vehement
905
00:39:42,507 --> 00:39:44,801
that we needed to increase
the price
906
00:39:44,801 --> 00:39:47,804
because there was no way
for it to be profitable
907
00:39:47,804 --> 00:39:48,972
at this level.
908
00:39:48,972 --> 00:39:51,307
But Mitch and Ted
were doing their own thing
909
00:39:51,307 --> 00:39:53,560
and making those decisions.
910
00:39:53,560 --> 00:39:55,520
Obviously, we couldn't have
a subscription service
911
00:39:55,520 --> 00:39:58,648
where, you know, we're paying
912
00:39:58,648 --> 00:40:01,026
more than we're receiving.
913
00:40:01,026 --> 00:40:05,363
But I think Mitch and Ted
were more focused
914
00:40:05,363 --> 00:40:08,033
on what was making
the stock move,
915
00:40:08,033 --> 00:40:12,037
which I think at that time
was just top-line user growth.
916
00:40:12,037 --> 00:40:14,122
And that was all
that they were fixated on.
917
00:40:14,122 --> 00:40:16,458
And they were confident
that would allow them
918
00:40:16,458 --> 00:40:18,418
to figure the rest out later.
919
00:40:18,418 --> 00:40:21,755
We have figured out a way
to give people a deal
920
00:40:21,755 --> 00:40:24,591
they cannot believe
we can even afford to give.
921
00:40:24,591 --> 00:40:27,260
Mitch was able to get
a lot of deals in place
922
00:40:27,260 --> 00:40:30,138
that Stacy had not managed
to move along.
923
00:40:30,138 --> 00:40:33,141
We're on the way
to over 5 million subscribers
924
00:40:33,141 --> 00:40:34,517
by the end of the year.
925
00:40:34,517 --> 00:40:38,229
And that's when the cash flow
starts to become positive.
926
00:40:38,229 --> 00:40:41,232
We knew 5 million subscribers
927
00:40:41,232 --> 00:40:43,401
would get us to somewhere
928
00:40:43,401 --> 00:40:45,904
between 12% to 15%
929
00:40:45,904 --> 00:40:48,573
of all the box office
in the country,
930
00:40:48,573 --> 00:40:51,701
which I believed
was enough clout
931
00:40:51,701 --> 00:40:56,664
to convince AMC
to discount us,
932
00:40:56,664 --> 00:41:00,001
the studios to pay us millions
of dollars a month
933
00:41:00,001 --> 00:41:01,086
to advertise.
934
00:41:01,086 --> 00:41:03,922
Then selling the data
935
00:41:03,922 --> 00:41:06,299
was going to be
extremely valuable.
936
00:41:06,299 --> 00:41:08,259
How much of this
is about the data,
937
00:41:08,259 --> 00:41:09,844
about knowing
Tyler and Melissa and me?
938
00:41:09,844 --> 00:41:12,097
Yeah, a huge amount of it
is the data.
939
00:41:12,097 --> 00:41:15,600
Because, you know,
this whole system is broken
940
00:41:15,600 --> 00:41:16,976
in the movie-theater business.
941
00:41:16,976 --> 00:41:20,146
Imagine, Warner Brothers
does not know
942
00:41:20,146 --> 00:41:22,440
who saw
all the previous Batman.
943
00:41:22,440 --> 00:41:25,443
They have to spend
$50 million, $100 million
944
00:41:25,443 --> 00:41:27,612
marketing every time
a film comes out.
945
00:41:27,612 --> 00:41:29,656
And that's why
Helios and Matheson,
946
00:41:29,656 --> 00:41:32,492
a data analytics firm,
actually just made a--
947
00:41:32,492 --> 00:41:34,035
they took a stake
in your company.
948
00:41:34,035 --> 00:41:35,161
That's right.
949
00:41:35,161 --> 00:41:37,330
There was a ton
of enthusiasm,
950
00:41:37,330 --> 00:41:41,876
but we were, like,
severely understaffed.
951
00:41:41,876 --> 00:41:44,796
A big moment for us
was the first time
952
00:41:44,796 --> 00:41:47,382
that the, like, app went down.
953
00:41:47,382 --> 00:41:49,884
The entire platform
was virtually unusable.
954
00:41:54,681 --> 00:41:57,308
Thursday night
to Sunday night,
955
00:41:57,308 --> 00:41:59,436
we were being hit hard.
956
00:41:59,436 --> 00:42:00,979
It was one hit
after another.
957
00:42:00,979 --> 00:42:03,481
Our servers
were getting annihilated...
958
00:42:03,481 --> 00:42:06,067
[chuckles]
All the time getting emails,
959
00:42:06,067 --> 00:42:07,777
errors, errors, errors.
960
00:42:07,777 --> 00:42:11,322
I worried about the brand,
961
00:42:11,322 --> 00:42:13,533
our reputation
in the industry.
962
00:42:13,533 --> 00:42:15,452
Mitch and Ted
would push back and say,
963
00:42:15,452 --> 00:42:17,328
we know what we're doing.
964
00:42:17,328 --> 00:42:18,997
We bought you.
965
00:42:18,997 --> 00:42:20,206
Thank you for sharing.
966
00:42:20,206 --> 00:42:22,125
[train horn blaring]
967
00:42:22,125 --> 00:42:24,753
♪ ♪
968
00:42:26,963 --> 00:42:30,508
At the monthly board meeting,
Hamet and I were told
969
00:42:30,508 --> 00:42:33,178
we were being removed
from the board.
970
00:42:34,846 --> 00:42:37,515
They said, hey,
we're reconstituting the board.
971
00:42:37,515 --> 00:42:41,311
We don't want
the co-founders on it.
972
00:42:41,311 --> 00:42:43,480
I remember Stacy pushing back.
973
00:42:43,480 --> 00:42:46,900
It broke my heart to see
two Black founders
974
00:42:46,900 --> 00:42:49,027
create a company
the way we did,
975
00:42:49,027 --> 00:42:52,197
and then all of a sudden,
there was an all-white board.
976
00:42:52,197 --> 00:42:55,075
I didn't want to be
in a place where I was, like,
977
00:42:55,075 --> 00:42:57,786
really feeling like
in the back of the bus.
978
00:42:57,786 --> 00:42:59,829
I'd say to myself,
the value is high.
979
00:42:59,829 --> 00:43:02,290
I can only hope
that these guys
980
00:43:02,290 --> 00:43:05,794
are going to be aligned
with us and be good stewards
981
00:43:05,794 --> 00:43:08,296
of the capital
to continue to make sure
982
00:43:08,296 --> 00:43:10,382
that the business is valuable.
983
00:43:10,382 --> 00:43:12,425
Stacy was...
984
00:43:12,425 --> 00:43:14,886
because he had been more
truly day to day,
985
00:43:14,886 --> 00:43:16,680
fought that a little bit more.
986
00:43:16,680 --> 00:43:18,765
Unfortunately,
there are people
987
00:43:18,765 --> 00:43:23,353
who are not cut out
for the stress and anxiety
988
00:43:23,353 --> 00:43:25,021
caused in a start-up.
989
00:43:25,021 --> 00:43:27,232
Ultimately, that was
a decision that Mitch made,
990
00:43:27,232 --> 00:43:29,150
and it was one
that we needed to back him on--
991
00:43:29,150 --> 00:43:31,528
or we felt we needed
to back him on at the time.
992
00:43:31,528 --> 00:43:34,572
I reached out to Chris
when they told me
993
00:43:34,572 --> 00:43:37,283
they were kicking me
off the board.
994
00:43:37,283 --> 00:43:38,868
He didn't respond.
995
00:43:38,868 --> 00:43:41,579
Chris is such a sweet guy.
996
00:43:41,579 --> 00:43:44,416
The last thing he would ever do
is fire anybody.
997
00:43:44,416 --> 00:43:46,251
So he said, you deal with it.
998
00:43:46,251 --> 00:43:48,378
And so that's what I did.
999
00:43:49,879 --> 00:43:53,591
A few weeks later,
there was an email from Mitch.
1000
00:43:53,591 --> 00:43:55,510
"We want to thank you
for your services,
1001
00:43:55,510 --> 00:43:58,138
"but you're no longer needed
at the company,
1002
00:43:58,138 --> 00:44:00,223
"and...
1003
00:44:00,223 --> 00:44:04,102
there will be someone moving
into your office next week."
1004
00:44:04,102 --> 00:44:06,563
We were all
just pretty upset.
1005
00:44:06,563 --> 00:44:09,774
How do you fire Stacy Spikes
from MoviePass?
1006
00:44:09,774 --> 00:44:11,568
The founder of the company
is leaving.
1007
00:44:11,568 --> 00:44:12,902
That's not a good sign.
1008
00:44:12,902 --> 00:44:14,946
He's, like, the heart
of MoviePass.
1009
00:44:14,946 --> 00:44:17,782
I think I did a very fair--
1010
00:44:17,782 --> 00:44:19,743
You know, he still owned
all his stock.
1011
00:44:19,743 --> 00:44:21,703
He still owned
all his options.
1012
00:44:21,703 --> 00:44:23,955
I just thought
that it would be better
1013
00:44:23,955 --> 00:44:26,041
if he wasn't a part
of the team.
1014
00:44:26,041 --> 00:44:28,251
Some people
were really upset.
1015
00:44:28,251 --> 00:44:31,296
A few people started crying.
1016
00:44:31,296 --> 00:44:33,089
A lot of hugs.
1017
00:44:33,089 --> 00:44:36,009
And I said, you know I live
right around the corner.
1018
00:44:36,009 --> 00:44:38,928
I'll be there
if you need anything.
1019
00:44:38,928 --> 00:44:41,097
I packed my stuff up,
1020
00:44:41,097 --> 00:44:44,517
and I left the key
on the desk,
1021
00:44:44,517 --> 00:44:46,686
and I walked out of my office.
1022
00:44:48,271 --> 00:44:50,357
I called my wife before.
1023
00:44:50,357 --> 00:44:53,693
So I think she had gotten
all of her crying and stuff
1024
00:44:53,693 --> 00:44:55,862
completely out
before I got there.
1025
00:44:55,862 --> 00:44:58,823
But I got home,
and she gave me a big hug,
1026
00:44:58,823 --> 00:45:00,909
and she says,
honey, I'm so sorry.
1027
00:45:02,160 --> 00:45:04,829
And then it just
kind of settled in.
1028
00:45:04,829 --> 00:45:07,499
It was like, wow,
this is a trip.
1029
00:45:07,499 --> 00:45:13,797
♪ ♪
1030
00:45:13,797 --> 00:45:16,091
[fireworks popping]
1031
00:45:16,091 --> 00:45:18,593
[upbeat music]
1032
00:45:18,593 --> 00:45:25,350
♪ ♪
1033
00:45:31,356 --> 00:45:34,526
No one knew anything about
the founder of the company
1034
00:45:34,526 --> 00:45:36,027
being ousted,
1035
00:45:36,027 --> 00:45:38,196
but at this point,
that's when the company
1036
00:45:38,196 --> 00:45:39,406
drastically changed.
1037
00:45:41,199 --> 00:45:43,785
There was definitely
an atmosphere of partying.
1038
00:45:43,785 --> 00:45:45,704
You know, every single month,
1039
00:45:45,704 --> 00:45:47,872
there was
a MoviePass-hosted event.
1040
00:45:47,872 --> 00:45:50,500
That was really part
of the excitement
1041
00:45:50,500 --> 00:45:53,044
of our operations,
1042
00:45:53,044 --> 00:45:56,881
trying to develop PR
and marketing...
1043
00:45:58,174 --> 00:46:00,677
Making contacts.
1044
00:46:00,677 --> 00:46:02,387
Ted's the best at that.
1045
00:46:04,431 --> 00:46:06,933
He is someone who understands
1046
00:46:06,933 --> 00:46:10,270
what convinces people
to buy a product.
1047
00:46:11,730 --> 00:46:13,898
He is exuberant.
1048
00:46:13,898 --> 00:46:17,068
Ted portrayed
a kind of visionary status
1049
00:46:17,068 --> 00:46:20,113
that you see
with business leaders like him.
1050
00:46:20,113 --> 00:46:23,992
I asked him one time,
why are you giving a $100 tip
1051
00:46:23,992 --> 00:46:26,911
you know, for a sandwich?
1052
00:46:26,911 --> 00:46:30,040
And he said, my mom put me
through school.
1053
00:46:30,040 --> 00:46:32,417
She raised us all on tips.
1054
00:46:32,417 --> 00:46:36,796
♪ ♪
1055
00:46:36,796 --> 00:46:39,382
Our first
company holiday party,
1056
00:46:39,382 --> 00:46:41,968
everyone's just--you know,
wine everywhere, right?
1057
00:46:41,968 --> 00:46:44,387
Just wine, wine, wine--free.
Like, here take it.
1058
00:46:44,387 --> 00:46:46,139
Mitch was making a toast,
1059
00:46:46,139 --> 00:46:48,350
and he said, all your
stock options, you know--
1060
00:46:48,350 --> 00:46:50,268
You're gonna be good.
We're gonna be making money.
1061
00:46:50,268 --> 00:46:52,520
He said, mark my words.
Everyone's going to be rich.
1062
00:46:52,520 --> 00:46:55,273
Everyone's gonna make it.
1063
00:46:55,273 --> 00:46:58,735
We all went back
to Ted's house, his apartment.
1064
00:46:58,735 --> 00:47:00,570
It was very nice.
[laughs] It was very nice.
1065
00:47:01,821 --> 00:47:04,824
[elevator bell dings]
1066
00:47:04,824 --> 00:47:06,618
That was always
something that was--
1067
00:47:06,618 --> 00:47:08,495
especially seeing
his apartment building--
1068
00:47:08,495 --> 00:47:13,375
was, like, living in this,
you know, lavish penthouse.
1069
00:47:13,375 --> 00:47:16,920
Ted is a wealthy guy
who has a lot of connections
1070
00:47:16,920 --> 00:47:19,297
who were changing the culture.
1071
00:47:19,297 --> 00:47:22,801
[dramatic music]
1072
00:47:22,801 --> 00:47:25,261
His nephew worked there,
1073
00:47:25,261 --> 00:47:28,264
you know, some other
family members, close friends.
1074
00:47:28,264 --> 00:47:30,433
My friend of this
and my friend of that.
1075
00:47:31,768 --> 00:47:35,939
Ted's official photographer
is his executive assistant.
1076
00:47:35,939 --> 00:47:38,983
Bob Ellis was a close friend
of Ted Farnsworth--
1077
00:47:38,983 --> 00:47:42,153
is the ex-husband
of Diana Ross.
1078
00:47:42,153 --> 00:47:46,324
He has been in and out
of the Hollywood social scene
1079
00:47:46,324 --> 00:47:48,159
for decades,
1080
00:47:48,159 --> 00:47:50,537
was basically hired
to be in charge
1081
00:47:50,537 --> 00:47:53,248
of marketing as a consultant.
1082
00:47:53,248 --> 00:47:55,000
I'm going to talk
a little bit
1083
00:47:55,000 --> 00:47:57,919
about relationships
and connecting, and...
1084
00:47:57,919 --> 00:48:00,672
One of the major figures
that Mitch Lowe hired
1085
00:48:00,672 --> 00:48:02,173
was Khalid Itum.
1086
00:48:02,173 --> 00:48:05,719
He was someone
who was selling furniture
1087
00:48:05,719 --> 00:48:08,555
at one point in his life and
decided to change things up.
1088
00:48:08,555 --> 00:48:12,934
And he happened to meet Mitch
at a conference.
1089
00:48:12,934 --> 00:48:14,352
Basically pitched him.
1090
00:48:14,352 --> 00:48:18,356
Said, hey, I think I could be
a good fit for your team.
1091
00:48:18,356 --> 00:48:21,067
He just got to the point
of saying the right things,
1092
00:48:21,067 --> 00:48:23,653
that he just kept going up
and up, up the ladder.
1093
00:48:26,156 --> 00:48:30,076
We needed to think
about having an office in LA.
1094
00:48:30,076 --> 00:48:32,078
I thought of Khalid--
1095
00:48:32,078 --> 00:48:34,748
someone who could connect
with the studios
1096
00:48:34,748 --> 00:48:38,043
to sell advertising
and work out data.
1097
00:48:38,043 --> 00:48:41,713
I made him VP
of business development.
1098
00:48:41,713 --> 00:48:43,965
Khalid, the connector
that he is,
1099
00:48:43,965 --> 00:48:46,718
knows everybody and brought on
a number of people
1100
00:48:46,718 --> 00:48:48,511
in Los Angeles.
1101
00:48:50,263 --> 00:48:53,016
We have this entity
called MoviePass Ventures
1102
00:48:53,016 --> 00:48:55,560
that's going to make movies.
1103
00:48:55,560 --> 00:48:58,396
[upbeat music]
1104
00:48:58,396 --> 00:49:02,025
MoviePass had the ability
to make a small film--
1105
00:49:02,025 --> 00:49:04,527
you know, $1 million,
$2 million films.
1106
00:49:04,527 --> 00:49:07,906
MoviePass could ensure
their success
1107
00:49:07,906 --> 00:49:11,659
by promoting them
to our 3 million subscribers,
1108
00:49:11,659 --> 00:49:13,661
buying a ton of tickets.
1109
00:49:13,661 --> 00:49:15,747
♪ ♪
1110
00:49:15,747 --> 00:49:18,166
A million here and there
1111
00:49:18,166 --> 00:49:21,628
seemed like small change,
1112
00:49:21,628 --> 00:49:25,715
especially relative
to what I saw as the benefit
1113
00:49:25,715 --> 00:49:28,426
that it could be.
1114
00:49:28,426 --> 00:49:32,138
They were
on a spending spree.
1115
00:49:32,138 --> 00:49:34,391
It was very nerve-racking
1116
00:49:34,391 --> 00:49:37,102
because we owned
a decent chunk of the business
1117
00:49:37,102 --> 00:49:39,938
and the value of the business
had gone up so much.
1118
00:49:39,938 --> 00:49:43,775
We put our everything into it
1119
00:49:43,775 --> 00:49:45,735
and left at a high point,
1120
00:49:45,735 --> 00:49:48,279
although we had an asterisk
next to that high point.
1121
00:49:48,279 --> 00:49:51,157
When I was fired
from MoviePass,
1122
00:49:51,157 --> 00:49:53,451
my ownership was valued
1123
00:49:53,451 --> 00:49:55,995
at around approximately
$80 million.
1124
00:49:55,995 --> 00:49:59,290
But there's, like,
a 12-month lock-up period
1125
00:49:59,290 --> 00:50:01,459
that you're not able
to sell your shares.
1126
00:50:01,459 --> 00:50:05,797
If you can't sell it,
it's hard to really count it.
1127
00:50:05,797 --> 00:50:09,676
And so we are hoping
and dependent
1128
00:50:09,676 --> 00:50:13,930
on that business maintaining
and growing its value
1129
00:50:13,930 --> 00:50:16,808
but not in a position
to control that.
1130
00:50:20,895 --> 00:50:22,188
That's why I don't count that.
1131
00:50:22,188 --> 00:50:24,649
I don't count that shit
until it's in my account.
1132
00:50:24,649 --> 00:50:28,528
It's dangerous to do that math
before you can spend it.
1133
00:50:28,528 --> 00:50:31,656
And so it's an incredible
amount of anxiety.
1134
00:50:31,656 --> 00:50:32,991
You're not behind the wheel.
1135
00:50:32,991 --> 00:50:34,617
You're not even
close to the wheel.
1136
00:50:34,617 --> 00:50:37,495
Oh, my God, are they really
spending that much money now?
1137
00:50:37,495 --> 00:50:39,456
Like, that's not going
to sustain, right?
1138
00:50:39,456 --> 00:50:41,332
I'm worried that
that's not going to sustain.
1139
00:50:41,332 --> 00:50:46,254
But maybe they had
a rabbit in the hat.
1140
00:50:46,254 --> 00:50:49,132
Joining us now,
MoviePass 's CEO Mitch Lowe
1141
00:50:49,132 --> 00:50:50,425
and Ted Farnsworth.
1142
00:50:50,425 --> 00:50:52,010
Welcome, gentlemen.
- Thank you for having us.
1143
00:50:52,010 --> 00:50:54,179
- So another milestone today.
- Yeah.
1144
00:50:54,179 --> 00:50:58,850
There was a certain point
in late January of 2018
1145
00:50:58,850 --> 00:51:01,853
where a lot of decisions
1146
00:51:01,853 --> 00:51:05,482
started to get made by Ted.
1147
00:51:05,482 --> 00:51:09,486
And I could see these
components coming together.
1148
00:51:09,486 --> 00:51:11,154
MoviePass,
within the next 60 days,
1149
00:51:11,154 --> 00:51:13,156
should be self-sufficient
on its own.
1150
00:51:13,156 --> 00:51:15,283
- Wait. 60 days...
- Yes.
1151
00:51:15,283 --> 00:51:17,369
It's going
to be cash-flow neutral?
1152
00:51:17,369 --> 00:51:19,079
Yeah, like, self-sufficient,
1153
00:51:19,079 --> 00:51:20,830
where they're not going
through cash burn.
1154
00:51:20,830 --> 00:51:23,792
[upbeat rock music]
1155
00:51:23,792 --> 00:51:27,379
♪ ♪
1156
00:51:34,094 --> 00:51:35,720
We understood
the business strategy.
1157
00:51:35,720 --> 00:51:37,681
We're going to be able
to set up technologies.
1158
00:51:37,681 --> 00:51:39,808
We're going to be able to do
all these other things.
1159
00:51:39,808 --> 00:51:42,394
We have all of this data from
the consumers that we can use.
1160
00:51:42,394 --> 00:51:43,895
All we had to do was sit back
1161
00:51:43,895 --> 00:51:45,563
and explain the story
to the media.
1162
00:51:45,563 --> 00:51:47,399
And that was
a really great place to be.
1163
00:51:47,399 --> 00:51:50,235
- The idea of selling data--
- We're the only ones--
1164
00:51:50,235 --> 00:51:52,195
Have you been able to sell
any of the data yet?
1165
00:51:52,195 --> 00:51:53,238
- Oh, yes.
- You have?
1166
00:51:53,238 --> 00:51:57,409
Yeah, we've already signed
agreements with studios.
1167
00:51:57,409 --> 00:52:00,036
♪ ♪
1168
00:52:00,036 --> 00:52:02,163
We're investing in building
1169
00:52:02,163 --> 00:52:04,874
a huge subscriber base.
1170
00:52:04,874 --> 00:52:07,252
People are seeing films
they never would have seen...
1171
00:52:07,252 --> 00:52:09,337
- Right.
- Without a MoviePass card.
1172
00:52:09,337 --> 00:52:12,757
We're buying sometimes
20% of all the movie tickets
1173
00:52:12,757 --> 00:52:14,759
in the United States.
1174
00:52:14,759 --> 00:52:19,431
The media was trying to grok
the economics of this.
1175
00:52:19,431 --> 00:52:21,933
All they could see
was an inherent loss
1176
00:52:21,933 --> 00:52:23,476
with every transaction.
1177
00:52:23,476 --> 00:52:25,603
You have everybody
all over the industry saying,
1178
00:52:25,603 --> 00:52:27,439
your business model
doesn't work.
1179
00:52:27,439 --> 00:52:28,356
Correct.
1180
00:52:28,356 --> 00:52:31,234
So why does it work?
1181
00:52:31,234 --> 00:52:32,902
Oh, you want me to explain?
1182
00:52:32,902 --> 00:52:34,571
Why the business model
does work, yeah.
1183
00:52:34,571 --> 00:52:36,781
It had a disconnect
on how that data
1184
00:52:36,781 --> 00:52:39,993
would be used downstream
to really bring in the revenue.
1185
00:52:39,993 --> 00:52:42,495
We have figured out a way
to give people
1186
00:52:42,495 --> 00:52:45,999
a deal they cannot believe
we can even afford to give.
1187
00:52:45,999 --> 00:52:49,753
- Yeah, 'cause you lose money.
- Yeah--No, we actually don't.
1188
00:52:49,753 --> 00:52:51,463
How do you not lose money?
1189
00:52:53,715 --> 00:52:57,218
I was really--I was
a believer in the mission.
1190
00:52:57,218 --> 00:52:59,888
I believed in the vision.
1191
00:52:59,888 --> 00:53:01,431
You know,
you invented this...
1192
00:53:01,431 --> 00:53:06,227
Mitch and Ted were doing
a lot of TV-show interviews.
1193
00:53:06,227 --> 00:53:07,645
And I felt like--
1194
00:53:07,645 --> 00:53:11,775
you know how sometimes
somebody is trying to...
1195
00:53:11,775 --> 00:53:14,778
prove that they're confident?
1196
00:53:14,778 --> 00:53:17,572
I almost kind of was like,
okay, go ahead.
1197
00:53:17,572 --> 00:53:18,656
Feel yourself.
1198
00:53:18,656 --> 00:53:20,408
You're the chairman
of MoviePass.
1199
00:53:20,408 --> 00:53:21,701
It's an enormously huge idea.
1200
00:53:21,701 --> 00:53:24,162
Any movie, any theater,
any day--that was me.
1201
00:53:24,162 --> 00:53:26,247
That's what I created.
- [chuckles]
1202
00:53:26,247 --> 00:53:29,459
[upbeat music]
1203
00:53:29,459 --> 00:53:31,628
♪ ♪
1204
00:53:31,628 --> 00:53:34,506
We were
at Sundance Film Festival.
1205
00:53:35,757 --> 00:53:37,342
Ted became enamored
1206
00:53:37,342 --> 00:53:40,595
by this whole business
of entertainment.
1207
00:53:40,595 --> 00:53:44,849
Khalid introduced him
to a number of people
1208
00:53:44,849 --> 00:53:47,018
and the potential
1209
00:53:47,018 --> 00:53:50,730
between MoviePass
and filmmaking.
1210
00:53:50,730 --> 00:53:52,649
They rented probably--
1211
00:53:52,649 --> 00:53:55,902
it had to be
a $50 million mansion.
1212
00:53:57,320 --> 00:54:00,573
Everybody was wilin' out,
dancin', celebratin',
1213
00:54:00,573 --> 00:54:03,410
and just really kissing
the ass of everybody
1214
00:54:03,410 --> 00:54:05,370
that worked at MoviePass,
1215
00:54:05,370 --> 00:54:08,081
because they all assumed,
like I did,
1216
00:54:08,081 --> 00:54:09,708
that they were just
the next big thing.
1217
00:54:09,708 --> 00:54:12,085
Like, they were the ones
to get involved with.
1218
00:54:12,085 --> 00:54:14,713
After they made such
a name for themself,
1219
00:54:14,713 --> 00:54:18,008
everything was possible
at that point--everything.
1220
00:54:18,008 --> 00:54:24,723
♪ ♪
1221
00:54:28,184 --> 00:54:30,270
I had heard a little bit
about MoviePass
1222
00:54:30,270 --> 00:54:31,938
within the past couple months
just on media,
1223
00:54:31,938 --> 00:54:34,024
whatever it may have been.
[camera shutter clicking]
1224
00:54:34,024 --> 00:54:38,361
I was fully engulfed in
my social-media influencing.
1225
00:54:38,361 --> 00:54:42,532
And Bob Ellis had called me
basically out of the blue.
1226
00:54:42,532 --> 00:54:44,743
I'm doing this event
with MoviePass.
1227
00:54:44,743 --> 00:54:47,746
We need you.
We want you to do merchandise.
1228
00:54:47,746 --> 00:54:50,290
You're going to fly in.
We have VIP tickets for you.
1229
00:54:50,290 --> 00:54:51,624
You're going to go
to this party,
1230
00:54:51,624 --> 00:54:53,460
and then you're also going
to go to Coachella.
1231
00:54:53,460 --> 00:54:55,962
It was three days
prior to the event.
1232
00:54:55,962 --> 00:54:58,923
[electronic music]
1233
00:54:58,923 --> 00:55:01,092
♪ ♪
1234
00:55:01,092 --> 00:55:02,802
And Dennis Rodman showed up.
1235
00:55:02,802 --> 00:55:05,430
I didn't know
who Dennis Rodman was.
1236
00:55:05,430 --> 00:55:08,600
He's tall. I'm short.
This is hilarious.
1237
00:55:08,600 --> 00:55:11,853
♪ ♪
1238
00:55:11,853 --> 00:55:14,522
I saw Dennis Rodman
1239
00:55:14,522 --> 00:55:17,859
getting out of the MoviePass
helicopter on Instagram.
1240
00:55:17,859 --> 00:55:18,818
[chuckles]
1241
00:55:18,818 --> 00:55:21,196
It is dry
as a motherfucker, all right?
1242
00:55:21,196 --> 00:55:23,114
And he was walking
all around,
1243
00:55:23,114 --> 00:55:25,575
telling people
about MoviePass.
1244
00:55:25,575 --> 00:55:27,911
We were just all like, what?
1245
00:55:27,911 --> 00:55:29,621
$20 million,
what they're spending here.
1246
00:55:29,621 --> 00:55:31,289
I don't even know
what they were doing,
1247
00:55:31,289 --> 00:55:32,707
but what I was told was,
1248
00:55:32,707 --> 00:55:34,626
make Dennis Rodman
wear this merchandise.
1249
00:55:34,626 --> 00:55:36,795
Got to thank these guys
here, MoviePass.
1250
00:55:36,795 --> 00:55:40,465
For Coachella,
it was Khalid thinking,
1251
00:55:40,465 --> 00:55:42,592
this is a great way
to get our name out there.
1252
00:55:42,592 --> 00:55:44,969
The entire Coachella thing
was just weird.
1253
00:55:44,969 --> 00:55:48,390
I mean, what's going on?
Why is this happening?
1254
00:55:48,390 --> 00:55:50,308
It was just kind of
like, what the fuck?
1255
00:55:50,308 --> 00:55:52,477
Where did we get money
for that?
1256
00:55:52,477 --> 00:55:57,148
Ted and his crew did like
to post pictures
1257
00:55:57,148 --> 00:55:58,733
of them having a good time.
1258
00:55:58,733 --> 00:56:02,028
♪ ♪
1259
00:56:02,028 --> 00:56:05,115
I don't understand
why we were even at Coachella
1260
00:56:05,115 --> 00:56:07,826
as a movie company.
1261
00:56:09,077 --> 00:56:11,788
Staff on Ted's side--
1262
00:56:11,788 --> 00:56:14,457
they're really enjoying
the ride.
1263
00:56:14,457 --> 00:56:18,003
And people
were back at the office
1264
00:56:18,003 --> 00:56:20,547
trying to figure out
customer-service issues
1265
00:56:20,547 --> 00:56:22,799
or why somebody
wouldn't get their card.
1266
00:56:24,342 --> 00:56:26,219
At the time,
it was super backed up.
1267
00:56:26,219 --> 00:56:28,179
There were hundreds
of thousands
1268
00:56:28,179 --> 00:56:29,514
of customer-service tickets
1269
00:56:29,514 --> 00:56:31,516
and, like, seven people
answering them.
1270
00:56:31,516 --> 00:56:34,394
You remember that?
The Coachella party?
1271
00:56:36,771 --> 00:56:39,482
Do you think they invited us,
the customer support,
1272
00:56:39,482 --> 00:56:41,943
or just anyone who wasn't
upper management to Coachella?
1273
00:56:41,943 --> 00:56:43,445
No, they didn't.
1274
00:56:43,445 --> 00:56:46,364
I sensed a resentment
1275
00:56:46,364 --> 00:56:49,325
by the MoviePass employees.
1276
00:56:49,325 --> 00:56:52,203
Each individual
has their various roles,
1277
00:56:52,203 --> 00:56:54,998
and not all roles get to party.
1278
00:56:57,375 --> 00:57:00,420
They had spent
over a million dollars.
1279
00:57:00,420 --> 00:57:03,340
Meanwhile,
there weren't extension cords
1280
00:57:03,340 --> 00:57:05,383
to plug our computers into.
1281
00:57:05,383 --> 00:57:07,385
I still have to go next door
to the bank
1282
00:57:07,385 --> 00:57:09,137
to borrow pens
or whatever, you know?
1283
00:57:09,137 --> 00:57:10,889
Like, it was insane.
1284
00:57:10,889 --> 00:57:14,559
Mitch and Ted started
to develop plans.
1285
00:57:14,559 --> 00:57:17,937
Some of them were logical,
1286
00:57:17,937 --> 00:57:21,608
in that they wanted to promote
the service,
1287
00:57:21,608 --> 00:57:24,861
but they became illogical
and irrational
1288
00:57:24,861 --> 00:57:27,405
as it relates
to the way the business
1289
00:57:27,405 --> 00:57:29,366
was going to finance itself.
1290
00:57:29,366 --> 00:57:32,577
And that's the thing
that became very tricky.
1291
00:57:32,577 --> 00:57:35,580
Ted became all excited,
telling me,
1292
00:57:35,580 --> 00:57:37,290
hey, we're going
to do this film.
1293
00:57:37,290 --> 00:57:39,292
John Travolta
is attached to it.
1294
00:57:39,292 --> 00:57:41,378
And Ted said, yeah,
and I'm going to put
1295
00:57:41,378 --> 00:57:43,213
your name on as a producer.
1296
00:57:43,213 --> 00:57:45,590
And, okay.
1297
00:57:45,590 --> 00:57:49,636
For me, it was just a film
that made sense
1298
00:57:49,636 --> 00:57:52,514
that we could promote
and earn money from.
1299
00:57:54,641 --> 00:57:56,142
Let me tell you something.
1300
00:57:56,142 --> 00:57:57,894
"Gotti" opening weekend--
1301
00:57:57,894 --> 00:58:01,356
it's got the dreaded
0% Rotten Tomatoes score.
1302
00:58:01,356 --> 00:58:03,274
Not a single person
who reviewed it
1303
00:58:03,274 --> 00:58:04,901
gave it a positive score.
1304
00:58:04,901 --> 00:58:07,278
- That's a goddamn lie!
- Order!
1305
00:58:07,278 --> 00:58:10,615
Gotti, they're lying!
She's lying!
1306
00:58:10,615 --> 00:58:12,450
There were, like,
these weird, little, like,
1307
00:58:12,450 --> 00:58:13,785
cockamamie schemes,
1308
00:58:13,785 --> 00:58:16,329
where they thought,
oh, we can generate money.
1309
00:58:16,329 --> 00:58:18,081
And I don't think
anybody could figure out
1310
00:58:18,081 --> 00:58:21,668
how this was supposed to work,
this $9 a month.
1311
00:58:21,668 --> 00:58:23,628
People were asking me,
how do you think it worked?
1312
00:58:23,628 --> 00:58:27,048
Like, you know, what's
the Coke secret formula?
1313
00:58:27,048 --> 00:58:30,677
And I was like, I don't know--
something with concessions?
1314
00:58:30,677 --> 00:58:33,805
That's the only thing
that I could think of.
1315
00:58:36,558 --> 00:58:38,435
The first MoviePass story
I wrote
1316
00:58:38,435 --> 00:58:39,936
that was of major significance
1317
00:58:39,936 --> 00:58:42,272
was when they had
their 10-K filing.
1318
00:58:42,272 --> 00:58:45,108
[applause]
1319
00:58:45,108 --> 00:58:48,445
Because MoviePass's parent
company, Helios and Matheson,
1320
00:58:48,445 --> 00:58:50,780
was a publicly traded company,
1321
00:58:50,780 --> 00:58:55,160
they have to file things
that you can see publicly.
1322
00:58:55,160 --> 00:58:57,203
They had their 10-K filing--
1323
00:58:57,203 --> 00:58:59,622
when a company needs
to kind of, like, assess
1324
00:58:59,622 --> 00:59:01,499
where they're going.
1325
00:59:01,499 --> 00:59:04,377
It revealed that in 2017,
1326
00:59:04,377 --> 00:59:09,174
they lost, like,
over $150 million.
1327
00:59:09,174 --> 00:59:11,259
When I was CEO,
1328
00:59:11,259 --> 00:59:14,262
we lost around $200,000
a month.
1329
00:59:14,262 --> 00:59:15,847
When they were running
the company,
1330
00:59:15,847 --> 00:59:17,766
they lost $30 million a month.
1331
00:59:17,766 --> 00:59:20,143
I wish we had access
to those reports
1332
00:59:20,143 --> 00:59:21,728
before they went out--
1333
00:59:21,728 --> 00:59:24,522
when the 10-K was released
1334
00:59:24,522 --> 00:59:26,107
and they were seeing
1335
00:59:26,107 --> 00:59:27,525
this hemorrhage.
1336
00:59:27,525 --> 00:59:29,527
I primarily invest
in small companies
1337
00:59:29,527 --> 00:59:31,529
and help build businesses
as a venture capitalist.
1338
00:59:31,529 --> 00:59:35,367
If you read the 10-K
of this company...
1339
00:59:35,367 --> 00:59:37,410
which I did,
1340
00:59:37,410 --> 00:59:40,622
it is an endless list of...
1341
00:59:40,622 --> 00:59:43,416
oh, my God,
what is happening here?
1342
00:59:43,416 --> 00:59:44,709
There wasn't any sense
1343
00:59:44,709 --> 00:59:46,753
that the financial situation
would improve.
1344
00:59:46,753 --> 00:59:48,838
And that would mean
they would just keep having
1345
00:59:48,838 --> 00:59:50,757
to go out and find hundreds
and hundreds
1346
00:59:50,757 --> 00:59:52,550
of millions of dollars
1347
00:59:52,550 --> 00:59:56,054
to continue to float
their company.
1348
00:59:56,054 --> 00:59:58,556
The investors started
getting nervous.
1349
00:59:58,556 --> 01:00:02,102
All they saw was money
going out the door--
1350
01:00:02,102 --> 01:00:03,395
millions every month.
1351
01:00:03,395 --> 01:00:05,814
Their stock plummeted.
1352
01:00:07,607 --> 01:00:11,361
Me writing about that
really set things going
1353
01:00:11,361 --> 01:00:14,739
of people realizing
that maybe things aren't going
1354
01:00:14,739 --> 01:00:17,659
as well at MoviePass
as many of us thought.
1355
01:00:17,659 --> 01:00:20,245
[ominous music]
1356
01:00:20,245 --> 01:00:24,499
One day, I was just googling
Ted Farnsworth.
1357
01:00:24,499 --> 01:00:26,084
What you're about
to learn today
1358
01:00:26,084 --> 01:00:27,877
is how you can travel
around the world
1359
01:00:27,877 --> 01:00:29,421
for pennies on the dollar...
1360
01:00:29,421 --> 01:00:31,339
I was really down
a rabbit hole,
1361
01:00:31,339 --> 01:00:33,758
looking at videos I've seen of
him from a lot of companies.
1362
01:00:33,758 --> 01:00:36,386
Ready to go, lock in
your freedom, lock in...
1363
01:00:36,386 --> 01:00:38,847
And I kept seeing
these articles
1364
01:00:38,847 --> 01:00:41,266
all built
around a defense of Ted.
1365
01:00:41,266 --> 01:00:43,435
"Ted Farnsworth may seem
like a scam artist,
1366
01:00:43,435 --> 01:00:44,644
but he's actually not."
1367
01:00:44,644 --> 01:00:46,104
"Anyone can say
he's a scam artist,
1368
01:00:46,104 --> 01:00:48,773
but he's really, like,
a great businessman."
1369
01:00:48,773 --> 01:00:51,234
They were all using
similar language.
1370
01:00:51,234 --> 01:00:53,111
And I was just struck by,
1371
01:00:53,111 --> 01:00:55,488
God, like, someone's
got to be paying for these.
1372
01:00:55,488 --> 01:00:58,950
Like, this is
such a ham-fisted strategy
1373
01:00:58,950 --> 01:01:02,954
to try to improve
your public image.
1374
01:01:02,954 --> 01:01:05,373
I mean, he doesn't
necessarily come across
1375
01:01:05,373 --> 01:01:08,001
as a very...
1376
01:01:08,001 --> 01:01:11,129
I should say, traditionally
sophisticated businessperson.
1377
01:01:11,129 --> 01:01:12,964
You're making money
while you're sleeping.
1378
01:01:12,964 --> 01:01:14,632
I always tell people
when they sit there
1379
01:01:14,632 --> 01:01:16,092
and they're having lunch
with somebody,
1380
01:01:16,092 --> 01:01:17,886
they could be saying,
I'm making money right now.
1381
01:01:17,886 --> 01:01:21,598
He's gotten
into the energy-drink game,
1382
01:01:21,598 --> 01:01:22,974
the farming game.
1383
01:01:22,974 --> 01:01:25,518
Hello, I'm Latoya Jackson.
1384
01:01:25,518 --> 01:01:27,812
If you have any questions
about your future,
1385
01:01:27,812 --> 01:01:30,857
now you can call your own
personal psychic anytime.
1386
01:01:30,857 --> 01:01:35,236
Starting a psychic hotline
with Latoya Jackson.
1387
01:01:35,236 --> 01:01:36,696
He's a chameleon.
1388
01:01:36,696 --> 01:01:39,532
I do want to ask about
how your biometrics works.
1389
01:01:39,532 --> 01:01:41,242
So it's three points
of the face
1390
01:01:41,242 --> 01:01:42,619
and a mathematical formula.
1391
01:01:42,619 --> 01:01:44,704
That's really
the big differentiation
1392
01:01:44,704 --> 01:01:47,082
between us and any other
facial-recognition company
1393
01:01:47,082 --> 01:01:48,124
out there.
1394
01:01:48,124 --> 01:01:51,753
Suddenly,
he was a movie exec.
1395
01:01:51,753 --> 01:01:54,756
I just was baffled.
1396
01:01:54,756 --> 01:01:57,634
Who is Ted Farnsworth?
1397
01:01:57,634 --> 01:02:00,762
Ted never shared
his master plan with me,
1398
01:02:00,762 --> 01:02:02,889
but every single Monday,
1399
01:02:02,889 --> 01:02:06,267
we needed more money
than the previous week.
1400
01:02:06,267 --> 01:02:09,437
And I had no idea
how we were going to get it.
1401
01:02:09,437 --> 01:02:13,191
I would go to Ted and said,
How long can this go on?
1402
01:02:13,191 --> 01:02:17,445
And he said, just keep going,
and the money will come.
1403
01:02:17,445 --> 01:02:20,865
♪ ♪
1404
01:02:20,865 --> 01:02:23,034
When they were losing
all this money,
1405
01:02:23,034 --> 01:02:26,246
Ted was also trying to start
a plane company.
1406
01:02:26,246 --> 01:02:29,082
♪ ♪
1407
01:02:29,082 --> 01:02:31,543
We have a hemorrhage going
on in your business model.
1408
01:02:31,543 --> 01:02:34,963
And now John Travolta's plane
has a MoviePass logo on it?
1409
01:02:34,963 --> 01:02:38,091
And he calls
it MoviePass Air.
1410
01:02:38,091 --> 01:02:41,386
Yes, it's called
MoviePass Air.
1411
01:02:41,386 --> 01:02:44,597
I saw that crazy spending,
1412
01:02:44,597 --> 01:02:46,975
and I was just shaking
my head.
1413
01:02:46,975 --> 01:02:49,310
I was just like, oh, gosh.
1414
01:02:49,310 --> 01:02:51,521
Please, like...
1415
01:02:51,521 --> 01:02:54,733
let them know something
I don't know.
1416
01:02:54,733 --> 01:02:56,568
All right, MoviePass
is fucking awesome.
1417
01:02:56,568 --> 01:02:58,570
And welcome 50 fucking Cent!
1418
01:02:58,570 --> 01:03:00,030
[cheers and applause]
1419
01:03:00,030 --> 01:03:01,990
Ted just wanted
to go to parties
1420
01:03:01,990 --> 01:03:03,116
and hang out
with Hollywood stars.
1421
01:03:03,116 --> 01:03:05,326
Make some noise for 50 Cent!
1422
01:03:05,326 --> 01:03:08,747
Go! Go! Go! Go! Go! Go!
1423
01:03:08,747 --> 01:03:10,123
There was
no branding strategy
1424
01:03:10,123 --> 01:03:14,169
for Ted to be involved
in hobnobbing with Hollywood.
1425
01:03:18,506 --> 01:03:21,092
I started getting
reached out from people
1426
01:03:21,092 --> 01:03:23,595
who actually work
at MoviePass.
1427
01:03:23,595 --> 01:03:24,929
There were some people
1428
01:03:24,929 --> 01:03:27,098
that would send me recordings
of meetings.
1429
01:03:41,154 --> 01:03:43,198
We would have big meetings.
1430
01:03:43,198 --> 01:03:45,700
I remember Mitch telling us,
everything's great.
1431
01:03:45,700 --> 01:03:46,993
Everything's great.
1432
01:03:46,993 --> 01:03:49,245
You know,
everything's going to plan.
1433
01:03:54,668 --> 01:03:57,921
I was focused
on trying to save it,
1434
01:03:57,921 --> 01:04:02,133
trying to find some solution,
a different model.
1435
01:04:02,133 --> 01:04:04,177
In an attempt
to stop the money loss,
1436
01:04:04,177 --> 01:04:07,347
MoviePass was changing
their terms of service daily.
1437
01:04:07,347 --> 01:04:08,723
Changes continue
1438
01:04:08,723 --> 01:04:10,308
for the troubled
film-subscription service.
1439
01:04:10,308 --> 01:04:11,643
MoviePass announcing
more changes.
1440
01:04:11,643 --> 01:04:14,646
The subscription-based company
will now only allow users
1441
01:04:14,646 --> 01:04:16,773
to choose
from six movies a day
1442
01:04:16,773 --> 01:04:18,858
and see a total
of three movies per month.
1443
01:04:18,858 --> 01:04:20,819
You can't use it
on Memorial Day Weekend,
1444
01:04:20,819 --> 01:04:22,904
but you can use it
during these windows here.
1445
01:04:22,904 --> 01:04:24,322
A little shady.
1446
01:04:24,322 --> 01:04:26,991
A lot of people are probably
not happy about this.
1447
01:04:26,991 --> 01:04:29,994
We implemented
a ticket-verification thing.
1448
01:04:29,994 --> 01:04:31,287
Next time you go into the app,
1449
01:04:31,287 --> 01:04:33,164
if you want to see
another one,
1450
01:04:33,164 --> 01:04:35,083
you have to upload the stub,
take a picture of it.
1451
01:04:35,083 --> 01:04:38,294
We were trying to find out
ways to not bleed out cash.
1452
01:04:38,294 --> 01:04:40,463
The type of images people
were supposed to send
1453
01:04:40,463 --> 01:04:44,175
were their actual
ticket stubs, but...
1454
01:04:44,175 --> 01:04:46,469
I've definitely sent
MoviePass a picture
1455
01:04:46,469 --> 01:04:48,430
of my middle finger before.
1456
01:04:48,430 --> 01:04:51,975
It became clear
that we were not able
1457
01:04:51,975 --> 01:04:54,310
to provide any solutions
to people
1458
01:04:54,310 --> 01:04:57,731
with the state of the app
as it was.
1459
01:04:57,731 --> 01:05:00,191
It simply was not working.
1460
01:05:00,191 --> 01:05:02,902
So there was very little that
we could do to help people,
1461
01:05:02,902 --> 01:05:05,405
which is really frustrating
when that's your job.
1462
01:05:05,405 --> 01:05:08,575
It just felt like chaos.
1463
01:05:08,575 --> 01:05:11,077
Summer of 2018
was when MoviePass
1464
01:05:11,077 --> 01:05:12,954
started to really hit
a fever pitch
1465
01:05:12,954 --> 01:05:14,956
in terms of popularity.
1466
01:05:14,956 --> 01:05:18,126
[suspenseful music]
1467
01:05:18,126 --> 01:05:21,921
♪ ♪
1468
01:05:21,921 --> 01:05:23,798
That "Mission: Impossible"
film--
1469
01:05:23,798 --> 01:05:26,009
I remember it being promoted,
1470
01:05:26,009 --> 01:05:29,387
or they had emails actually
encouraging members to go.
1471
01:05:29,387 --> 01:05:31,306
When "Mission: Impossible--
Fallout" came out,
1472
01:05:31,306 --> 01:05:33,433
we started hearing
from customers
1473
01:05:33,433 --> 01:05:36,728
that the service
was not working at all.
1474
01:05:36,728 --> 01:05:38,688
I've ruined your day,
haven't I?
1475
01:05:38,688 --> 01:05:41,024
When I check
the MoviePass today,
1476
01:05:41,024 --> 01:05:43,318
let me show you guys
what I see.
1477
01:05:43,318 --> 01:05:45,445
"Mission: Impossible--
Fallout,"
1478
01:05:45,445 --> 01:05:46,738
I haven't seen that.
1479
01:05:46,738 --> 01:05:48,782
There were already signs
1480
01:05:48,782 --> 01:05:51,242
that there were
some technical issues
1481
01:05:51,242 --> 01:05:54,120
with being able to fulfill
the promise
1482
01:05:54,120 --> 01:05:55,914
that MoviePass had.
1483
01:05:55,914 --> 01:05:59,209
But I noticed
with "Mission: Impossible,"
1484
01:05:59,209 --> 01:06:01,252
it felt like a national issue.
1485
01:06:01,252 --> 01:06:04,422
It's just the discussion
surrounding that movie,
1486
01:06:04,422 --> 01:06:06,800
I recall, was vitriolic.
1487
01:06:06,800 --> 01:06:08,593
[chuckles]
1488
01:06:08,593 --> 01:06:10,679
We're right here
at this theater, right here,
1489
01:06:10,679 --> 01:06:13,473
and they just opened--
no screenings at this theater.
1490
01:06:13,473 --> 01:06:15,767
I might as well start a fire
and try and send
1491
01:06:15,767 --> 01:06:17,143
customer service
smoke signals.
1492
01:06:17,143 --> 01:06:19,521
They're more likely to answer
that than their phone
1493
01:06:19,521 --> 01:06:21,564
or the email that I sent.
1494
01:06:21,564 --> 01:06:23,274
We did get a lot
of hate mail, I remember.
1495
01:06:23,274 --> 01:06:24,943
We had stacks of hate mail.
1496
01:06:24,943 --> 01:06:26,986
It got so bad
that, apparently,
1497
01:06:26,986 --> 01:06:31,366
a customer literally sent
a box of shit to the office.
1498
01:06:31,366 --> 01:06:32,450
I get it.
1499
01:06:32,450 --> 01:06:34,786
Like, I mean, I wouldn't send
no shit to a company
1500
01:06:34,786 --> 01:06:36,579
if they were doing
me wrong, but...
1501
01:06:36,579 --> 01:06:37,664
wow.
1502
01:06:37,664 --> 01:06:40,792
A lot of these things
were during a period of time
1503
01:06:40,792 --> 01:06:42,293
that I was--
1504
01:06:42,293 --> 01:06:44,629
You know, I was
in the middle of a divorce
1505
01:06:44,629 --> 01:06:48,800
after 40 years of being
with my former wife.
1506
01:06:48,800 --> 01:06:50,802
I was totally distracted.
1507
01:06:50,802 --> 01:06:55,265
So, without a specific amount
of time,
1508
01:06:55,265 --> 01:06:58,393
I just thought, you know,
this would be a good time
1509
01:06:58,393 --> 01:07:03,356
for me to take off
and let Khalid take over.
1510
01:07:03,356 --> 01:07:05,984
Mitch was still CEO,
but Khalid Itum was running
1511
01:07:05,984 --> 01:07:08,153
the day-to-day operations.
1512
01:07:14,159 --> 01:07:17,078
I'm sure you're aware
of Khalid, right?
1513
01:07:24,836 --> 01:07:26,838
You know, honestly, I don't
even remember his role.
1514
01:07:26,838 --> 01:07:28,340
I just know he went
from one role,
1515
01:07:28,340 --> 01:07:29,549
and then next thing you know,
1516
01:07:29,549 --> 01:07:31,676
he was senior vice president
of that role.
1517
01:07:31,676 --> 01:07:33,053
And then next thing you know,
1518
01:07:33,053 --> 01:07:35,096
he was, like, pretty much
running the show.
1519
01:07:36,431 --> 01:07:38,266
While Mitch took off
to Mexico
1520
01:07:38,266 --> 01:07:39,976
in the wake of his divorce,
1521
01:07:39,976 --> 01:07:41,519
Ted is living his best life.
1522
01:07:41,519 --> 01:07:44,439
[easygoing music]
1523
01:07:44,439 --> 01:07:47,984
♪ ♪
1524
01:07:47,984 --> 01:07:52,030
There was a picture
on my manager's IG
1525
01:07:52,030 --> 01:07:54,574
of them partying it up
on a yacht.
1526
01:07:54,574 --> 01:07:58,036
♪ ♪
1527
01:07:58,036 --> 01:08:00,497
And then he put this picture
on private.
1528
01:08:00,497 --> 01:08:02,624
I'm like, it's too late.
1529
01:08:02,624 --> 01:08:06,336
People within the company
were beginning to realize,
1530
01:08:06,336 --> 01:08:08,046
there was not going to be
a happy ending to this.
1531
01:08:08,046 --> 01:08:10,006
[indistinct shouting]
1532
01:08:10,006 --> 01:08:12,217
It's like that moment
in "Titanic"
1533
01:08:12,217 --> 01:08:15,553
when the band
is still on the boat
1534
01:08:15,553 --> 01:08:19,224
while it's going down,
but they won't leave the ship.
1535
01:08:19,224 --> 01:08:21,017
Shares of Helios and Matheson
1536
01:08:21,017 --> 01:08:24,229
have plunged 90%
so far this year.
1537
01:08:24,229 --> 01:08:26,147
Shares peaked
at the equivalent
1538
01:08:26,147 --> 01:08:29,275
of more than $8,000 a share.
1539
01:08:29,275 --> 01:08:32,320
Right now it's trading
between one and two cents.
1540
01:08:32,320 --> 01:08:34,197
I desperately went to Ted
and said,
1541
01:08:34,197 --> 01:08:37,701
we need a minimum
of $5 million.
1542
01:08:37,701 --> 01:08:40,787
Ted said, I'm sorry, we can't
come up with the money.
1543
01:08:40,787 --> 01:08:43,748
[somber music]
1544
01:08:43,748 --> 01:08:45,250
♪ ♪
1545
01:08:45,250 --> 01:08:47,711
Well, subscription
movie-ticket company MoviePass
1546
01:08:47,711 --> 01:08:50,755
announcing it will shut down.
1547
01:08:50,755 --> 01:08:53,883
It was a bit of a bummer
that this good thing
1548
01:08:53,883 --> 01:08:55,427
had to come to an end
1549
01:08:55,427 --> 01:08:58,722
for everybody
that really saw the vision.
1550
01:08:58,722 --> 01:09:01,099
♪ ♪
1551
01:09:01,099 --> 01:09:03,893
Eventually both HMNY
and MoviePass
1552
01:09:03,893 --> 01:09:06,479
declared bankruptcy.
1553
01:09:06,479 --> 01:09:08,857
It took Stacy over a decade
to create MoviePass
1554
01:09:08,857 --> 01:09:10,233
and less than a year
1555
01:09:10,233 --> 01:09:12,736
for Mitch and Ted
to drive it into the ground.
1556
01:09:15,613 --> 01:09:16,990
Ah...
1557
01:09:16,990 --> 01:09:19,701
♪ ♪
1558
01:09:19,701 --> 01:09:22,370
I think the hardest part--
1559
01:09:22,370 --> 01:09:25,832
I think if we had failed--
1560
01:09:25,832 --> 01:09:29,794
and I use the collective "we"
of the MoviePass team
1561
01:09:29,794 --> 01:09:31,588
We tried a product,
1562
01:09:31,588 --> 01:09:34,257
it didn't succeed
in the market,
1563
01:09:34,257 --> 01:09:36,968
and we just failed.
1564
01:09:36,968 --> 01:09:39,054
I think I could have lived
with that.
1565
01:09:39,054 --> 01:09:42,057
But what was hard
about what had happened was,
1566
01:09:42,057 --> 01:09:44,017
we had succeeded.
1567
01:09:44,017 --> 01:09:46,311
We had built a brand
over years.
1568
01:09:46,311 --> 01:09:49,314
The brand had enormous value
in the marketplace.
1569
01:09:49,314 --> 01:09:51,566
We were disrupting
the movie industry.
1570
01:09:51,566 --> 01:09:55,278
We were changing everything,
and it worked.
1571
01:09:55,278 --> 01:09:58,490
And that made it harder.
1572
01:09:58,490 --> 01:10:01,826
But I think losing
all that money was...
1573
01:10:01,826 --> 01:10:03,119
[groans]
1574
01:10:03,119 --> 01:10:06,331
It's very disappointing.
1575
01:10:06,331 --> 01:10:09,626
You work more than a decade
on something.
1576
01:10:09,626 --> 01:10:13,338
You summit Everest.
You literally make it.
1577
01:10:13,338 --> 01:10:17,342
And then it's gone
within the amount of time
1578
01:10:17,342 --> 01:10:20,595
that you as a founder
can't sell your stock.
1579
01:10:20,595 --> 01:10:22,347
It just vanished.
1580
01:10:22,347 --> 01:10:25,225
By the time MoviePass was
no more,
1581
01:10:25,225 --> 01:10:27,727
the stock value,
around $80 million,
1582
01:10:27,727 --> 01:10:31,356
that Hamet and I had
was worth pennies.
1583
01:10:31,356 --> 01:10:33,108
It's a pain
to have to explain
1584
01:10:33,108 --> 01:10:34,359
the MoviePass situation,
1585
01:10:34,359 --> 01:10:36,194
'cause when it was
in the news, like,
1586
01:10:36,194 --> 01:10:37,696
I had to explain that
to everyone
1587
01:10:37,696 --> 01:10:39,823
that I interacted with
on the business side,
1588
01:10:39,823 --> 01:10:41,783
and that's not fun.
1589
01:10:41,783 --> 01:10:43,868
And the only thing
I could say is, like, look,
1590
01:10:43,868 --> 01:10:45,620
we exited the business,
1591
01:10:45,620 --> 01:10:49,582
and the new team took it
in a direction that--
1592
01:10:49,582 --> 01:10:51,418
took it
in various directions, right?
1593
01:10:51,418 --> 01:10:54,212
I had to be fairly neutral
around that.
1594
01:10:54,212 --> 01:10:56,089
I was not talking
to Ted at all.
1595
01:10:56,089 --> 01:10:58,758
I knew from the beginning
that Ted and I did not have
1596
01:10:58,758 --> 01:11:00,135
the same values,
1597
01:11:00,135 --> 01:11:02,220
but Mitch did say,
I apologize.
1598
01:11:02,220 --> 01:11:05,932
Like, I remember him
apologizing...
1599
01:11:05,932 --> 01:11:08,184
which I was glad he did,
1600
01:11:08,184 --> 01:11:11,438
but it didn't solve the pain.
1601
01:11:11,438 --> 01:11:14,315
It was 10 years
after we launched Netflix
1602
01:11:14,315 --> 01:11:16,151
that streaming first began.
1603
01:11:16,151 --> 01:11:18,528
Mitch loves
to pump up himself
1604
01:11:18,528 --> 01:11:20,572
as this great disruptor,
1605
01:11:20,572 --> 01:11:23,283
but it was clear for people
who worked at MoviePass
1606
01:11:23,283 --> 01:11:25,201
that this guy
was not the answer.
1607
01:11:25,201 --> 01:11:27,162
Mitch's history,
as I found out more,
1608
01:11:27,162 --> 01:11:29,289
was spottier than
he would have represented.
1609
01:11:29,289 --> 01:11:31,291
He would tell us
how he was one of the founders
1610
01:11:31,291 --> 01:11:32,500
of Netflix.
1611
01:11:32,500 --> 01:11:35,170
Mitch was not
a co-founder of Netflix.
1612
01:11:35,170 --> 01:11:38,048
Mitch Lowe,
in the early days of Netflix,
1613
01:11:38,048 --> 01:11:40,759
was someone who was able
to provide them
1614
01:11:40,759 --> 01:11:45,263
with loads and loads of disks,
of DVDs.
1615
01:11:45,263 --> 01:11:47,265
When Mitch came on board,
1616
01:11:47,265 --> 01:11:50,060
he had
some very strong opinions
1617
01:11:50,060 --> 01:11:53,938
and had a very...
1618
01:11:53,938 --> 01:11:57,400
non-Netflix, non-Netflix-y way
of approaching it.
1619
01:11:57,400 --> 01:12:00,111
Mitch and I got to a point
where he told me
1620
01:12:00,111 --> 01:12:01,446
that he was going to quit
1621
01:12:01,446 --> 01:12:03,782
if I didn't take
Ted's financing deal.
1622
01:12:03,782 --> 01:12:04,949
And I ultimately said,
1623
01:12:04,949 --> 01:12:06,743
well, I don't want to run
the company, I can't.
1624
01:12:06,743 --> 01:12:08,328
I've got other things
to do right now.
1625
01:12:08,328 --> 01:12:09,954
So I guess
we're going to do this.
1626
01:12:09,954 --> 01:12:12,374
You know, and that was
the beginning of the end
1627
01:12:12,374 --> 01:12:13,917
in some ways.
1628
01:12:23,301 --> 01:12:27,097
[train screeching]
1629
01:12:27,097 --> 01:12:28,848
I got a voice mail
1630
01:12:28,848 --> 01:12:32,811
from someone who said
they were from the FBI.
1631
01:12:32,811 --> 01:12:35,480
And I ended up
doing an interview with them
1632
01:12:35,480 --> 01:12:38,400
regarding investigations
that they were doing
1633
01:12:38,400 --> 01:12:41,736
on MoviePass and HMNY.
1634
01:12:43,071 --> 01:12:46,324
I was talking to
the Attorney General's Office,
1635
01:12:46,324 --> 01:12:48,993
the FBI, and the FTC.
1636
01:12:48,993 --> 01:12:51,329
It was quite nerve-racking.
1637
01:12:51,329 --> 01:12:54,833
I've never seen or done
anything like that.
1638
01:12:54,833 --> 01:12:58,169
The FTC was investigating
allegations of fraud
1639
01:12:58,169 --> 01:12:59,838
by MoviePass
against customers.
1640
01:12:59,838 --> 01:13:02,507
The deeper you got in,
the more you realized
1641
01:13:02,507 --> 01:13:05,301
all the shady dealings
that were going on.
1642
01:13:05,301 --> 01:13:07,512
Mr. Farnsworth and Mr. Lowe
1643
01:13:07,512 --> 01:13:09,472
got themselves
into a real predicament.
1644
01:13:09,472 --> 01:13:12,017
What I heard
was that Mitch Lowe
1645
01:13:12,017 --> 01:13:14,310
told his tech team
1646
01:13:14,310 --> 01:13:17,731
to block people
from using the app.
1647
01:13:19,190 --> 01:13:22,861
The subscriber didn't know
the rules had changed,
1648
01:13:22,861 --> 01:13:24,696
and that was unfair.
1649
01:13:24,696 --> 01:13:27,782
I understand needing
to get costs down,
1650
01:13:27,782 --> 01:13:30,326
but that's not
the way to do it.
1651
01:13:30,326 --> 01:13:31,911
I think there was a time
1652
01:13:31,911 --> 01:13:34,956
where MoviePass
was struggling financially,
1653
01:13:34,956 --> 01:13:38,001
where they started to do
some very questionable things
1654
01:13:38,001 --> 01:13:41,379
around...
1655
01:13:41,379 --> 01:13:43,715
turning people's cards off
and things like that.
1656
01:13:43,715 --> 01:13:47,469
No one ever made
the cards not work--
1657
01:13:47,469 --> 01:13:50,555
never, never, ever, ever.
1658
01:13:50,555 --> 01:13:55,435
We did do some things
to attack fraud
1659
01:13:55,435 --> 01:13:58,480
that we believed
was happening.
1660
01:13:58,480 --> 01:14:00,231
Had a lot of people
that were abusing
1661
01:14:00,231 --> 01:14:01,733
the terms and conditions
early on,
1662
01:14:01,733 --> 01:14:04,319
so we slowed down
and slowed down the growth.
1663
01:14:04,319 --> 01:14:06,571
A company can certainly
implement procedures
1664
01:14:06,571 --> 01:14:08,740
to make sure
there's no fraud going on,
1665
01:14:08,740 --> 01:14:10,492
but that's not
what they were doing here.
1666
01:14:10,492 --> 01:14:11,743
They were hemorrhaging money,
1667
01:14:11,743 --> 01:14:13,703
and they wanted to stop
the frequent users
1668
01:14:13,703 --> 01:14:15,747
from actually using
the product.
1669
01:14:15,747 --> 01:14:18,750
We were being told,
you know,
1670
01:14:18,750 --> 01:14:21,086
to build roadblocks
to our users.
1671
01:14:21,086 --> 01:14:24,172
That, to us as engineers,
was just not okay.
1672
01:14:24,172 --> 01:14:26,675
For us to do things that was,
like, a little dirty,
1673
01:14:26,675 --> 01:14:28,760
like, didn't seem right.
1674
01:14:46,653 --> 01:14:48,697
As a guy running a business,
1675
01:14:48,697 --> 01:14:52,492
I feel like Mitch was doing
what he had to do to survive.
1676
01:14:52,492 --> 01:14:55,453
He was trying to lose
less money.
1677
01:14:55,453 --> 01:14:57,455
Comically and ironically,
1678
01:14:57,455 --> 01:14:59,457
that meant selling less
of his product.
1679
01:14:59,457 --> 01:15:01,793
Now you've taken
someone's money
1680
01:15:01,793 --> 01:15:05,672
for a product
that you're not giving them.
1681
01:15:05,672 --> 01:15:07,340
The first thing
that really jumped at me
1682
01:15:07,340 --> 01:15:09,676
was those internal documents
and emails
1683
01:15:09,676 --> 01:15:12,929
that were basically saying,
hey, should we do this?
1684
01:15:12,929 --> 01:15:16,391
The FTC might come after us
if we do it.
1685
01:15:16,391 --> 01:15:18,476
There seemed to be
almost an awareness
1686
01:15:18,476 --> 01:15:20,979
that, like, the FTC is going
to be very upset
1687
01:15:20,979 --> 01:15:23,106
when they hear about this
and might come knocking,
1688
01:15:23,106 --> 01:15:24,941
and they did it anyway.
1689
01:15:24,941 --> 01:15:26,651
There seemed to be
an aspect of that
1690
01:15:26,651 --> 01:15:28,278
that was almost
sort of cavalier.
1691
01:15:36,077 --> 01:15:37,579
Look, Wall Street
loves this story.
1692
01:15:37,579 --> 01:15:38,663
They love a growth story.
1693
01:15:38,663 --> 01:15:40,331
We got
over 3 million subscribers.
1694
01:15:40,331 --> 01:15:41,916
Nobody's even close to us.
1695
01:15:41,916 --> 01:15:43,168
With MoviePass,
1696
01:15:43,168 --> 01:15:46,254
the way they were telling
the story was exciting.
1697
01:15:46,254 --> 01:15:48,506
We're the hottest brand out
there going for the last year.
1698
01:15:48,506 --> 01:15:50,967
And so we're here.
1699
01:15:50,967 --> 01:15:52,635
We're not going to run
out of any cash
1700
01:15:52,635 --> 01:15:54,095
or anything like this.
1701
01:15:54,095 --> 01:15:58,433
I had invested in MoviePass
between $4,000 and $5,000,
1702
01:15:58,433 --> 01:16:01,519
and I chose to invest
1703
01:16:01,519 --> 01:16:03,688
because it felt
very disruptive.
1704
01:16:03,688 --> 01:16:05,523
It was exciting.
I pounced on it.
1705
01:16:05,523 --> 01:16:06,858
Our burn now is, like, down
1706
01:16:06,858 --> 01:16:09,069
to approximately
$12 million a month.
1707
01:16:09,069 --> 01:16:12,322
Ted's sitting on TV,
telling everyone,
1708
01:16:12,322 --> 01:16:14,532
this is going
to be profitable,
1709
01:16:14,532 --> 01:16:17,202
but you
as an outside investor,
1710
01:16:17,202 --> 01:16:18,536
you couldn't disprove it.
1711
01:16:18,536 --> 01:16:19,788
We're the only ones--
1712
01:16:19,788 --> 01:16:21,414
Have you been able to sell
any of the data yet?
1713
01:16:21,414 --> 01:16:23,124
- Oh, yes.
- You have been able--
1714
01:16:23,124 --> 01:16:26,586
Yeah, we've already signed
agreements with studios.
1715
01:16:26,586 --> 01:16:28,254
They were doing
a lot of interviews
1716
01:16:28,254 --> 01:16:32,425
and mentioning the way they
would make up the loss was,
1717
01:16:32,425 --> 01:16:36,221
they were going to sell
people's data.
1718
01:16:36,221 --> 01:16:37,347
That's insane.
1719
01:16:37,347 --> 01:16:38,848
I can sell someone's
1720
01:16:38,848 --> 01:16:41,851
specific data to an advertiser
1721
01:16:41,851 --> 01:16:46,106
for $2 to $4 per 1,000 people.
1722
01:16:46,106 --> 01:16:47,232
I might get 10 bucks.
1723
01:16:47,232 --> 01:16:50,527
And that's per 1,000,
which wasn't going to offset
1724
01:16:50,527 --> 01:16:52,445
the tens of millions of dollars
1725
01:16:52,445 --> 01:16:54,656
that they were losing
on a quarterly basis
1726
01:16:54,656 --> 01:16:55,907
running this business.
1727
01:16:55,907 --> 01:16:57,826
And how much of this
is about the data?
1728
01:16:57,826 --> 01:16:59,577
A huge amount of it
is the data.
1729
01:16:59,577 --> 01:17:01,079
The stock price goes up
1730
01:17:01,079 --> 01:17:04,082
because Mitch and Ted
created some crazy story.
1731
01:17:04,082 --> 01:17:07,752
60 days, it's going
to be cash-flow neutral?
1732
01:17:07,752 --> 01:17:09,087
Yeah, like, self-sufficient,
1733
01:17:09,087 --> 01:17:10,964
where they're not going
through cash burn.
1734
01:17:10,964 --> 01:17:13,341
It is not illegal
to be stupid.
1735
01:17:13,341 --> 01:17:15,093
It is not illegal to be wrong.
1736
01:17:15,093 --> 01:17:18,263
It is illegal to knowingly lie
and mislead
1737
01:17:18,263 --> 01:17:21,307
and then take someone's money.
1738
01:17:21,307 --> 01:17:22,934
It's the small retail investor
1739
01:17:22,934 --> 01:17:25,687
that gets sucked
into these ideas,
1740
01:17:25,687 --> 01:17:28,857
and no one ever sends
the money back to them.
1741
01:17:28,857 --> 01:17:30,608
They don't see it coming.
1742
01:17:30,608 --> 01:17:33,486
I believe I ended up losing
about $200,000,
1743
01:17:33,486 --> 01:17:35,947
which was
a significant amount for me.
1744
01:17:35,947 --> 01:17:38,700
[chuckles]
Looking at a MoviePass card,
1745
01:17:38,700 --> 01:17:40,910
it makes me feel like...
1746
01:17:40,910 --> 01:17:42,245
warm shit.
1747
01:17:42,245 --> 01:17:43,788
[laughs]
1748
01:17:43,788 --> 01:17:46,833
Ted and Mitch
fleeced retail investors
1749
01:17:46,833 --> 01:17:48,793
and the average person,
1750
01:17:48,793 --> 01:17:51,546
either users of the service
or shareholders like myself.
1751
01:17:51,546 --> 01:17:53,590
It's just sad.
1752
01:17:53,590 --> 01:17:56,468
Ted was not selling
a product.
1753
01:17:56,468 --> 01:17:58,928
Ted is a stock promoter.
1754
01:18:00,472 --> 01:18:02,474
You see a repeated pattern.
1755
01:18:02,474 --> 01:18:06,144
[dramatic music]
1756
01:18:06,144 --> 01:18:08,646
I'm so glad to see that
you made the right choice
1757
01:18:08,646 --> 01:18:10,065
to come to the next section.
1758
01:18:10,065 --> 01:18:12,776
So what you have
to wonder is,
1759
01:18:12,776 --> 01:18:16,738
how is HMNY...
1760
01:18:16,738 --> 01:18:19,157
getting the money...
1761
01:18:19,157 --> 01:18:22,452
so that MoviePass can lose it
so quickly?
1762
01:18:24,162 --> 01:18:25,663
And the answer is,
1763
01:18:25,663 --> 01:18:28,667
they're raising it
from Hudson Bay.
1764
01:18:28,667 --> 01:18:30,460
Hudson Bay
was the hedge fund
1765
01:18:30,460 --> 01:18:31,836
that was behind them.
1766
01:18:31,836 --> 01:18:35,173
In total, it was upwards
of $200 million
1767
01:18:35,173 --> 01:18:39,427
that Hudson Bay
invested into HMNY.
1768
01:18:39,427 --> 01:18:41,346
Your next question is,
1769
01:18:41,346 --> 01:18:44,516
why is Hudson Bay buying stock
1770
01:18:44,516 --> 01:18:47,227
or getting debt from HMNY
1771
01:18:47,227 --> 01:18:50,230
for a business
that's losing so much money?
1772
01:18:50,230 --> 01:18:51,272
We were investigating
1773
01:18:51,272 --> 01:18:53,566
these hundreds of millions
of dollars in losses.
1774
01:18:53,566 --> 01:18:55,193
And we kept trying
to figure out,
1775
01:18:55,193 --> 01:18:58,363
what was the plan to actually
make this business work?
1776
01:18:58,363 --> 01:19:02,867
People like Ted are not there
to build a business.
1777
01:19:02,867 --> 01:19:06,204
They're there
to sell you stock.
1778
01:19:06,204 --> 01:19:07,580
That's what they do.
1779
01:19:07,580 --> 01:19:10,750
And the people who were
working at MoviePass told me
1780
01:19:10,750 --> 01:19:13,044
there was never going to be
any big partnership
1781
01:19:13,044 --> 01:19:14,796
with the major movie theaters.
1782
01:19:14,796 --> 01:19:17,924
There was never going to be
any huge marketing dollars
1783
01:19:17,924 --> 01:19:19,926
that were going to somehow
save the company.
1784
01:19:19,926 --> 01:19:22,178
There was never going to be
this big data
1785
01:19:22,178 --> 01:19:25,348
that magically was sold
to a tech company or something
1786
01:19:25,348 --> 01:19:27,308
and made everything work.
1787
01:19:27,308 --> 01:19:32,313
It is no different than
making a play on Broadway.
1788
01:19:32,313 --> 01:19:34,107
You need a star,
1789
01:19:34,107 --> 01:19:37,193
you need a story,
and you need a prop.
1790
01:19:37,193 --> 01:19:38,737
Mitch is perfect.
1791
01:19:38,737 --> 01:19:41,239
Look at his background.
Look at his appearance.
1792
01:19:41,239 --> 01:19:44,117
Mitch is the guy.
He's the guy. He's the CEO.
1793
01:19:44,117 --> 01:19:47,120
We're on the way
to over 5 million subscribers
1794
01:19:47,120 --> 01:19:50,707
by the end of the year,
and that's when the cash flow
1795
01:19:50,707 --> 01:19:52,834
starts to become positive.
1796
01:19:52,834 --> 01:19:54,836
Ted's the visionary.
1797
01:19:54,836 --> 01:19:56,796
MoviePass is our prop.
1798
01:19:56,796 --> 01:19:58,173
Look at the growth.
1799
01:19:58,173 --> 01:20:00,091
And what is
the revenue stream
1800
01:20:00,091 --> 01:20:02,719
that makes that possible?
- Multiple revenue streams.
1801
01:20:02,719 --> 01:20:04,387
They're putting on a play.
1802
01:20:04,387 --> 01:20:06,431
Instead of buying a ticket,
you bought their stock.
1803
01:20:06,431 --> 01:20:09,267
[chuckles] In both cases,
you left with nothing,
1804
01:20:09,267 --> 01:20:10,685
other than memories.
1805
01:20:10,685 --> 01:20:12,270
Some of the instincts we had
1806
01:20:12,270 --> 01:20:16,691
around the way the ship
was being run were correct.
1807
01:20:16,691 --> 01:20:18,902
That behavior
and those decisions
1808
01:20:18,902 --> 01:20:21,279
were destroying value.
1809
01:20:21,279 --> 01:20:24,324
And the brand
that we cared about,
1810
01:20:24,324 --> 01:20:26,701
the subscribers
that we cared about,
1811
01:20:26,701 --> 01:20:29,746
the user experience
that we obsessed over
1812
01:20:29,746 --> 01:20:33,667
all was getting washed away.
1813
01:20:33,667 --> 01:20:35,001
And this just in.
1814
01:20:35,001 --> 01:20:38,129
The former CEOs of MoviePass
and its parent company
1815
01:20:38,129 --> 01:20:40,131
have been charged
with securities fraud.
1816
01:20:40,131 --> 01:20:42,509
Prosecutors say they misled
investors as part of a scheme
1817
01:20:42,509 --> 01:20:45,929
to artificially boost
the company's stock price.
1818
01:20:49,307 --> 01:20:52,102
The problem with
Ted's strategy at MoviePass--
1819
01:20:52,102 --> 01:20:54,813
like, he lost
so much money so quickly.
1820
01:20:54,813 --> 01:20:57,148
It could have lasted
much longer
1821
01:20:57,148 --> 01:21:01,319
had he said, $30 a month,
and sacrificed the growth.
1822
01:21:01,319 --> 01:21:06,157
It seemed like he just had
a "Thelma & Louise" strategy.
1823
01:21:06,157 --> 01:21:08,993
Let's just gun it
and go off the cliff.
1824
01:21:08,993 --> 01:21:12,122
[tires squealing,
engine revving]
1825
01:21:12,122 --> 01:21:14,916
♪ ♪
1826
01:21:14,916 --> 01:21:17,711
People's money
just went up in smoke.
1827
01:21:17,711 --> 01:21:19,504
If I had done
what they had done
1828
01:21:19,504 --> 01:21:23,591
and gone through $250 million,
I would have been in jail.
1829
01:21:23,591 --> 01:21:25,802
It's kind of like they were
the goddamn Mike Tyson
1830
01:21:25,802 --> 01:21:27,178
of fucking movies.
1831
01:21:27,178 --> 01:21:29,305
How do you burn
through $250 million?
1832
01:21:29,305 --> 01:21:30,890
What the fuck
is wrong with you?
1833
01:21:30,890 --> 01:21:31,850
Are you crazy?
1834
01:21:31,850 --> 01:21:35,145
Ted's a con artist
at the end of the day...
1835
01:21:35,145 --> 01:21:37,355
period.
1836
01:21:37,355 --> 01:21:40,025
What was
a fantastic business idea
1837
01:21:40,025 --> 01:21:43,028
got turned into this circus.
1838
01:21:43,028 --> 01:21:45,196
When I look back,
1839
01:21:45,196 --> 01:21:47,866
I can come up
with a dozen things
1840
01:21:47,866 --> 01:21:49,951
we should have done
differently.
1841
01:21:49,951 --> 01:21:52,537
It's true for any failure.
1842
01:21:52,537 --> 01:21:54,873
It's not only embarrassing,
1843
01:21:54,873 --> 01:21:58,209
but it's also
a big learning lesson.
1844
01:21:58,209 --> 01:22:01,254
And for me, it just reminds me
1845
01:22:01,254 --> 01:22:05,508
how many mistakes that I made
in that whole business.
1846
01:22:05,508 --> 01:22:08,011
♪ ♪
1847
01:22:23,360 --> 01:22:26,029
I'm going to talk a little
bit about relationships
1848
01:22:26,029 --> 01:22:27,489
and connecting.
1849
01:22:43,588 --> 01:22:44,673
My name is Ted Farnsworth.
1850
01:22:44,673 --> 01:22:47,384
I'm the co-founder and
chairman of Zash Global Media,
1851
01:22:47,384 --> 01:22:50,595
as well as co-CEO
of Vinco Ventures.
1852
01:23:00,772 --> 01:23:02,399
Let me apologize
to the shareholders
1853
01:23:02,399 --> 01:23:03,441
of Vinco Ventures.
1854
01:23:03,441 --> 01:23:05,735
It looks like
a circus going on here.
1855
01:23:16,454 --> 01:23:17,956
At one time,
1856
01:23:17,956 --> 01:23:20,917
there was this really positive
group of people
1857
01:23:20,917 --> 01:23:24,379
who were just trying
to make moviegoing easier.
1858
01:23:24,379 --> 01:23:26,214
And...
1859
01:23:26,214 --> 01:23:29,467
it's really an example
of, like, corporate greed
1860
01:23:29,467 --> 01:23:31,177
and...
1861
01:23:31,177 --> 01:23:35,306
what that can do to people
and to a company.
1862
01:23:35,306 --> 01:23:39,310
Ted and Mitch are the people
who took MoviePass
1863
01:23:39,310 --> 01:23:41,896
and turned it
into this, like, monster.
1864
01:23:41,896 --> 01:23:44,566
It was
the greatest thing ever.
1865
01:23:44,566 --> 01:23:46,609
I was paying $10 a month,
1866
01:23:46,609 --> 01:23:50,905
and I was able to go see
a movie once a day, every day.
1867
01:23:50,905 --> 01:23:54,159
And I averaged, like, about--
1868
01:23:54,159 --> 01:23:56,995
I'm going to say I averaged
about four movies a month,
1869
01:23:56,995 --> 01:24:00,123
sometimes four movies
a week, for real.
1870
01:24:00,123 --> 01:24:03,376
And I'm realizing, I haven't
been to a movie since.
1871
01:24:03,376 --> 01:24:05,170
[laughs]
1872
01:24:05,170 --> 01:24:07,422
Oh, I miss MoviePass.
Oh, I miss it.
1873
01:24:07,422 --> 01:24:08,923
I wouldn't have had
a problem
1874
01:24:08,923 --> 01:24:11,509
paying a little bit more just
to keep the company around.
1875
01:24:11,509 --> 01:24:13,678
Maybe had they would have
done it from the beginning
1876
01:24:13,678 --> 01:24:15,972
or kept it the way it was
when it first started,
1877
01:24:15,972 --> 01:24:17,766
maybe it would still be
around today.
1878
01:24:17,766 --> 01:24:21,269
The reason why I still
have it, it was just--
1879
01:24:21,269 --> 01:24:24,064
it represented
a great time in my life,
1880
01:24:24,064 --> 01:24:26,191
despite all the hell
and high water
1881
01:24:26,191 --> 01:24:28,026
and just a lot of stuff
that happened
1882
01:24:28,026 --> 01:24:29,736
outside of MoviePass for me.
1883
01:24:29,736 --> 01:24:33,114
Like, you know, I grew a lot,
and I learned a lot,
1884
01:24:33,114 --> 01:24:36,368
and I think, like, you know,
it's wisdom well earned.
1885
01:24:36,368 --> 01:24:38,620
So I think
that's why I hold on to this.
1886
01:24:38,620 --> 01:24:40,705
I heard those are
collector's items now.
1887
01:24:40,705 --> 01:24:42,374
You heard that?
- How much?
1888
01:24:42,374 --> 01:24:45,210
- Was it $1,000 or something?
- $1,500.
1889
01:24:45,210 --> 01:24:47,337
This bitch will be
on eBay tonight...
1890
01:24:47,337 --> 01:24:49,381
[laughter]
Guaranteed.
1891
01:24:51,466 --> 01:24:55,303
When I got fired,
I went to a monastery,
1892
01:24:55,303 --> 01:24:57,681
where I sit with monks
in silence.
1893
01:24:59,182 --> 01:25:00,684
My anger is there,
1894
01:25:00,684 --> 01:25:03,436
but if you don't do something
with that energy,
1895
01:25:03,436 --> 01:25:04,729
it devours you.
1896
01:25:04,729 --> 01:25:08,233
It eats you from the inside.
It debilitates you.
1897
01:25:08,233 --> 01:25:11,319
When Stacy and I exited
MoviePass,
1898
01:25:11,319 --> 01:25:12,946
I gave myself permission
1899
01:25:12,946 --> 01:25:15,448
to not have to think
about it as much anymore
1900
01:25:15,448 --> 01:25:19,160
and to really start thinking
about new businesses to build,
1901
01:25:19,160 --> 01:25:21,454
new problems to solve,
1902
01:25:21,454 --> 01:25:23,164
new...
1903
01:25:23,164 --> 01:25:25,166
people to work with.
1904
01:25:25,166 --> 01:25:28,294
Even to this day,
when people, you know, hear
1905
01:25:28,294 --> 01:25:31,673
that I co-founded MoviePass,
I get a lot of love.
1906
01:25:33,299 --> 01:25:37,053
People kept talking
about MoviePass.
1907
01:25:37,053 --> 01:25:40,390
Like, maybe one day
this thing can come back.
1908
01:25:42,267 --> 01:25:46,271
In the summer of 2021,
1909
01:25:46,271 --> 01:25:50,942
I heard that MoviePass
was put up for auction.
1910
01:25:50,942 --> 01:25:53,695
I contacted the courts,
1911
01:25:53,695 --> 01:25:57,157
and then I made a bid
to purchase MoviePass back.
1912
01:25:57,157 --> 01:26:00,660
Out of the ashes, like
the rising of the phoenix,
1913
01:26:00,660 --> 01:26:03,955
MoviePass has returned under
the ownership and guidance
1914
01:26:03,955 --> 01:26:06,541
of the original owner
of MoviePass,
1915
01:26:06,541 --> 01:26:08,960
you know, back when MoviePass
was a legitimate business.
1916
01:26:08,960 --> 01:26:10,462
MoviePass is back.
1917
01:26:10,462 --> 01:26:12,839
MoviePass and its CEO
are back at it again,
1918
01:26:12,839 --> 01:26:14,215
this time placing all bets
1919
01:26:14,215 --> 01:26:16,718
on believing they now have
the perfect recipe
1920
01:26:16,718 --> 01:26:18,470
to get moviegoers
back into theaters.
1921
01:26:18,470 --> 01:26:20,513
With theaters looking
for a big boost,
1922
01:26:20,513 --> 01:26:22,557
company leaders feel
now is the perfect time
1923
01:26:22,557 --> 01:26:23,600
for a relaunch.
1924
01:26:23,600 --> 01:26:26,686
We've gotten the experience
really down tight.
1925
01:26:26,686 --> 01:26:28,521
And we're already seeing--
1926
01:26:28,521 --> 01:26:29,981
because we've got
lots of people
1927
01:26:29,981 --> 01:26:31,566
that are already
on the platform.
1928
01:26:31,566 --> 01:26:33,109
Joining me now
here at the floor
1929
01:26:33,109 --> 01:26:34,319
of the New York Stock Exchange
1930
01:26:34,319 --> 01:26:36,780
is Stacy Spikes,
the CEO of MoviePass,
1931
01:26:36,780 --> 01:26:37,864
also author of the book
1932
01:26:37,864 --> 01:26:40,784
"Black Founder: The Hidden
Power of Being an Outsider,"
1933
01:26:40,784 --> 01:26:42,160
the man himself joining me.
1934
01:26:42,160 --> 01:26:43,745
Stacy, thanks a lot
for taking the time.
1935
01:26:43,745 --> 01:26:44,788
Thanks, JD.
1936
01:26:44,788 --> 01:26:46,873
It really feels nice
to see the people tell
1937
01:26:46,873 --> 01:26:48,667
how the book has helped them
1938
01:26:48,667 --> 01:26:52,337
and the honesty
of what I went through
1939
01:26:52,337 --> 01:26:54,714
and talking
about the emotional journey,
1940
01:26:54,714 --> 01:26:57,217
that a lot of entrepreneurs
and founders
1941
01:26:57,217 --> 01:26:59,719
have really appreciated
that level of honesty.
1942
01:26:59,719 --> 01:27:01,805
Thank you for being
a Black founder.
1943
01:27:01,805 --> 01:27:05,558
Thank you for being
an inspiration to all of us,
1944
01:27:05,558 --> 01:27:09,813
for being a man of influence,
impact, and integrity
1945
01:27:09,813 --> 01:27:11,981
and character that you are.
1946
01:27:13,525 --> 01:27:17,153
I was always inspired
by stories like Steve Jobs,
1947
01:27:17,153 --> 01:27:19,072
you know, leaving Apple
and coming back.
1948
01:27:19,072 --> 01:27:23,326
I was inspired by Michael Dell
leaving Dell Computers
1949
01:27:23,326 --> 01:27:24,786
and him coming back.
1950
01:27:24,786 --> 01:27:29,541
And there's so many stories
in the entrepreneurial ethos
1951
01:27:29,541 --> 01:27:31,543
where the founders came back.
1952
01:27:31,543 --> 01:27:34,462
I'd never live with myself
if I didn't try.
1953
01:27:34,462 --> 01:27:37,841
♪ ♪
1954
01:27:37,841 --> 01:27:40,635
I hope that
Stacy's next attempt here
1955
01:27:40,635 --> 01:27:44,848
to make MoviePass what we all
hoped it will be will succeed.
1956
01:27:46,349 --> 01:27:49,394
The best way
I can describe Stacy--
1957
01:27:49,394 --> 01:27:53,940
he's, like, very consistent
and persistent.
1958
01:27:53,940 --> 01:27:57,485
He still feels like he has
an itch he wants to scratch
1959
01:27:57,485 --> 01:27:59,320
with this business model.
1960
01:27:59,320 --> 01:28:03,199
MoviePass doubled
the revenue in theaters.
1961
01:28:03,199 --> 01:28:05,160
That's revolutionary.
1962
01:28:05,160 --> 01:28:07,078
IMAX didn't do that.
1963
01:28:07,078 --> 01:28:09,289
Dine-In didn't do that.
1964
01:28:09,289 --> 01:28:11,541
And two brothers built that.
1965
01:28:13,376 --> 01:28:16,046
I'll never forget--
it was a Saturday afternoon,
1966
01:28:16,046 --> 01:28:18,590
and I went
to Regal Union Square.
1967
01:28:18,590 --> 01:28:20,759
And I was sitting in my seat.
1968
01:28:20,759 --> 01:28:24,929
And in between the seats,
this young brother looks at me,
1969
01:28:24,929 --> 01:28:27,265
and he says, yo...
1970
01:28:27,265 --> 01:28:29,225
are you Stacy Spikes?
1971
01:28:29,225 --> 01:28:30,935
And I said, yes.
1972
01:28:30,935 --> 01:28:33,271
He goes, man, thank you.
1973
01:28:33,271 --> 01:28:35,774
Thank you for everything
that you've done, man.
1974
01:28:35,774 --> 01:28:37,108
You make me proud.
1975
01:28:37,108 --> 01:28:39,611
And that moment...
1976
01:28:39,611 --> 01:28:42,947
that encapsulated everything.
1977
01:28:42,947 --> 01:28:47,118
♪ ♪
1978
01:30:18,501 --> 01:30:21,671
[bright tone]