HBO’s ‘MoviePass’ Doc Alleges CEO Blocked Frequent Users From Accessing App

Movie lovers who participated in the fever dream that was MoviePass likely remember that, during the summer 2018, the app was all but impossible to use. Popular blockbusters like Mission: Impossible – Fallout were missing from the app. Check-ins weren’t loading. Cards weren’t working. The customer service chat function msyteriously disappeared.

According to HBO’s new documentary, MoviePass, MovieCrash—premiering tonight on HBO at 9 p.m. ET/PT, when it will also stream on Max—those technical difficulties weren’t just because the company was understaffed and overwhelmed. It was because, allegedly, MoviePass CEO Mitch Lowe instructed his team to purposefully block frequent moviegoers from using the app, in attempt to stop losing so much money.

Directed by Muta’Ali, this documentary walks viewers through the history of MoviePass. That history does not, in fact, begin with the ludicrous 2017 promo that promised users the ability to see one movie a day for the too-good-to-be-true price of $9.95 a month. Instead, it begins in 2011, with co-founders Stacey Spikes and Hamet Watt, two Black entrepreneurs who sought to disrupt the movie-going industry in the same way Netflix disrupted the home video rental industry. Spikes and Watt created the location-based check-in and the preloaded debit system, charging users between $30 to $50 a month—aka, a price that could actually be profitable for the company.

But after five years, MoviePass had still failed to turn a profit—in part because a deal with AMC fell through, after the theater company changed leadership. Spikes, at the urging of one of his biggest investors, agreed to step aside and allow Lowe to take over as CEO in 2016. Soon after, the company was acquired by the analytics firm Helios and Matheson. Lowe, who is featured in the documentary, is quick to claim that the “$10 a month for a movie a day” idea was the brainchild of Helios and Matheson’s CEO, and MoviePass investor, Ted Farnsworth. But Lowe certainly ran with it—and ignored Spikes’ many warnings that it was unsustainable. All Lowe cared about—says Spikes in the documentary—was subscriber growth, which was the major metric for stockholders at the time.

The promotion worked for subscriber growth a bit too well. One former employee says that by 2018, MoviePass had over a million active subscribers going to around four movies a month. (One user interviewed boasts that he used his pass to see Crazy Rich Asians in theaters 14 times.) The average movie ticket cost, at the time, was around $11. Anyone who could do simple math could see that MoviePass was bleeding out money. According to publicly available reports, the company lost over $150 million in 2017 alone.

Spikes was eventually fired from the company he founded. But in 2020, he was drawn back into the MoviePass drama, when the FBI came knocking on his door. The Bureau and the FTC were investigating a case of consumer fraud against Mitch Lowe and Ted Farnsworth. Allegedly, in a desperation to cut costs, Lowe and Farnsworth purposefully blocked frequent users from accessing the app. This included, according the FTC, invalidating users passwords on the false pretense of “suspicious activity or potential fraud” and “trip wires” that blocked certain frequent users from accessing the app.

Lowe claims in the documentary that his team was simply trying to prevent fraud. FTC commissioner Daniel Kaufman, who is also interviewed in the documentary, disagrees.

“A company can certainly implement procedures to make sure there is no fraud going on,” Kaufman said in a talking head interview. “But that’s not what they were doing here. They were hemorrhaging money, and they wanted to stop the frequent users from actually using the product.”

MoviePass programmer Omar Miscara testifies in the movie that his team was “being told to build roadblocks for our users, that to us as engineers was just not OK. For us to do things that were a little dirty… it just didn’t seem right.”

Perhaps most damning is a secret recording of Lowe telling his team that they need to reduce costs, and that one way to do that was by “eliminating the top one or two box office hits each week, for the next three or so weeks. Mission Impossible, this week.”

In other words, MoviePass was promising consumers a product—any movie you want, once a day, for $10 a month—that the company then knowingly did not deliver.

The FTC case was settled in 2021, with neither Lowe and Farnsworth confirming or denying that they blocked users from accessing the app. In a separate Department of Justice case in 2022, Lowe and Farnsworth were both charged with one count of securities fraud and three counts of wire fraud. Both pled not guilty to fraud, and are still awaiting a trial date as of May 2024.