How MoviePass Bombed at the Box Office with Jamie Loftus and Austin Nasso | 33

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On a lovely, almost spring morning in March of 2018, Ken, a retiree, is hoping to make a little scratch trading stocks.

He isn't sure what to invest in, but he has about $50,000 to play with.

Ken spots something interesting, a business called Helios and Matheson Analytics, the parent company of MoviePass, some hotshot new venture.

Currently, Helios' shares are going for $4.62 each.

But Wall Street analysts, who definitely know what they're talking about, say it's undervalued.

With all the attention this new Movie Pass thing is getting, they think it's worth $15 a share, at least.

It does seem like a good deal.

Maybe too good.

But, Ken thinks, you only live once and purchases 10,000 shares in Helios.

Now it's time to watch that $46,000 triple in value.

Maybe he can go to Fiji for his next vacation.

St.

Bart's?

But Ken notices that the price of his shares aren't tripling, but dropping.

In the blink of an eye, his shares are worth less than a dollar each.

But the analysts still say Movie Pass is a hot commodity and Helios is due for an upswing.

So Ken buys some again, and suddenly the price falls to just a quarter.

So he buys again.

But the next time he looks, it's worth just 8 cents a share.

Desperately trying to make his money back, Ken ends up losing $190,000

in just three months.

On the bright side, Ken has a really funny story to tell at parties,

right?

It's a question many moviegoers have been asking themselves: Should I get Movie Pass?

But when the company dropped prices to $10 last August, the price to see one movie evened out to be about the same price as the pass itself.

And you get to see an unlimited number of movies each month.

How is that a business model?

How didn't they realize they would be paying more out of pocket than the subscribers were paying to them?

Movie Pass announcing it will shut down tomorrow and that it's not sure if or when it'll launch again.

We

are on

a single ship.

From Wondering and At Will Media, this is The Big Flop, where we chronicle the greatest flubs, fails, and blunders of all time.

I'm your host, Misha Brown, social media's superstar and box office bombshell at Don't Cross a Gay Man.

And today, we're talking about Movie Pass, the unlimited movie ticket service that bombed at the box office.

On our show today, we have a writer, comedian, and podcast queen.

Her shows, Lolita, My Year in Mensa, and the Bechdel cast are absolute must-listens.

It's Jamie Loftus.

Welcome to the show.

Oh, thanks for having me.

As a former Movie Pass subscriber, I feel like my voice needs to be heard on this issue.

It does need to be heard.

I'm so excited.

I love anytime I get to do one of these podcast shows and we have like first-hand experience.

So I'm excited to get into that.

Well, also on the show today, we have a comedian and improviser who is known for his sick tech roasts.

It's Austin Nasso.

Welcome.

Hello.

Thanks for having me.

I have not used Movie Pass, but I am super excited to talk about his downfall.

Yeah, same.

I guess before we get into the story of Movie Pass, how much of a moviegoer are you?

Are you an opening weekend person, a matinee three weeks later?

What's your vibe?

I might be the worst movie person ever.

I will probably go a year after its release and like pending the reviews.

Like, I'm like truly so behind on films, to be honest.

What about you, Jamie?

I'm like very, I'll either go the first week it comes out or five years later.

I feel like I have the sort of remaining like what Movie Pass once was.

I'm an AMC Stubbs member.

Shout out to the AMC Stubbs gang.

So that enables me to go to the mall and watch some of the dumbest shit possible.

So I'll either see something, yeah, like in the first two weeks it comes out or it will be a mystery to me for all time.

Well, in Hollywood, a town known for gatekeeping, Stacey Spikes has worked his way up from video store clerk to VP of marketing at Miramax.

By the time he's 27, Stacey is one of the lucky few who actually break in.

But he takes a look around and becomes frustrated by the lack of representation.

In 1997, using his connections, Stacey founds the Urban World Film Festival, which highlights the work of BIPOC filmmakers.

By 2004, the festival is such a big deal, it hosts the premiere of Collateral, a thriller starring Jamie Fox, Jada Pinkett-Smith, and Tom Cruise.

My mom loved that movie.

Yeah, when I saw that, I was like, oh, that's right.

I remember that movie.

My mom saw that opening weekend and talked about how Jamie Fox was dreamy for six weeks afterwards.

But that's not enough for Stacey.

He wants to expand the festival into a year-round platform.

And here's the twist.

He wants to offer subscription passes to it.

Now, do you remember what the movie industry was like in 2005?

The movies were good, I think.

Is that right?

They were better.

I feel like I thought all movies were great in 2005, but it was also because I was in middle school.

That's before you go to Rotten tomatoes

i just would go watch movies and think they were all great and now all those movies that i liked i'll look them up and see that they had like a 20 or 30 percent

it's so humbling yeah like thinking back to like the first dates i ever went on in high school and being like wow the child abuff indiana jones was not in fact the masterpiece i thought it was

see i'm aging myself here but in 2005 I was in college.

So

what I remembered was back then Netflix was still only sending DVDs in the mail and folks were pirating movies on the internet rather than paying full price.

Stacey, who's always thinking one step ahead, thinks that movie subscriptions could get people back into theaters.

So in 2005, Stacey takes his idea to Travis Reed, the CEO of Lowe's Theaters.

How does he go to the CEO of Lowe's Theaters?

How does one do that?

I mean, maybe because he was already doing movies with Jamie Foxx and Jada Pinkett Smith.

Oh, yeah.

Right.

Well, Travis Reed, he thinks a quote, movie pass is a good idea, good enough to expand it beyond Urban World to cover the whole movie industry.

Travis is the guy in the movie about movie pass who thinks big.

Who do you think for casting?

I'm thinking Justin Timberlake with some maybe aging prosthetics in the movie.

Guy who thinks big.

Yeah.

I feel like this is like the same, like I've like Justin Long with aging prosthetics.

Maybe like Ashton Kutcher, like Steve Jobs, kind of a.

We're all thinking of basically the same guy.

Yeah.

The same person.

Yeah.

Yeah.

So how does this movie pass thing actually work?

Well, the pricing structure is pretty straightforward.

The subscription starts at $50 per month for unlimited movies.

If you want to see a 3D or IMAX movie, it's an extra $3.

You're creating so much demand.

I can imagine that it is very disruptive to the profit margins of these theaters.

Yeah, that was like always one of my main questions about Movie Pass was like, how do they get away with this?

Like, I was never able to figure out the math, but I was happy to benefit from it.

Right.

So, the question is, how can an unlimited subscription possibly make money?

Well, get out your number two pencils or whatever kids use these days because it's time to learn about the idea of breakage.

So, breakage is the profit machine behind cheap gym memberships, credit card reward points, hotel loyalty programs.

These are businesses that revolve around services people pay for but rarely use.

They assume that many folks will just keep paying their small subscription fees regardless of whether they actually use the company's service.

So is this when I get a flight refund and Chase makes it impossible to find my flight credits?

Is that part of their business model?

Probably.

Okay, just checking.

Also like the same logic where no shade, but I try to unsubscribe from Paramount Plus at least once a month, and I can never figure out how.

And in fact, the last time I tried, I ended up adding showtime and now I can't figure out how to do that either.

I'm just like, oh my God, like I'm giving him $12 now.

I don't know how it happened.

Well, breakage would have been the quickest route to profit.

from Movie Pass.

Unfortunately, the math will never math because people love the movies just as much as Stacey does and way more than they love sweating in poorly lit gyms on broken exercise equipment.

But I get ahead of myself.

Back in 2006, Stacy and Travis worked together on a ticketing system for their movie ticket subscription service.

They find a way to send tickets to people via the most modern technology available in 2006.

That's right, text messages.

Hell yeah.

The system they build works, but Travis's employer, Lowe's, has just merged with AMC and they're not interested in working with Movie Pass.

They're going to do their own thing.

So after getting turned down by AMC, Stacey spends five years trying to pitch his idea to Regal, Cinemark, and other theater conglomerates.

Nobody wants it.

They're all investing in experiential entertainment like IMAX and 3D.

Sidebar, are we happy the 3D movie craze is basically over?

They were very painful to watch.

Yeah.

It would always be the most random things that became 3D.

Like, someone would like cough, and the droplets were like 3D.

Like, I feel like they didn't even know how to prioritize the 3D elements, and the glasses really hurt.

I think, like, I don't know, for kids' movies, and also like for horror movies, I feel like it hits.

I remember seeing Final Destination 3D in high school, and I was like, this is cinema.

This is good.

Well, undeterred, Stacey keeps pitching and pitching until he gets his big break, Q Angelic Chorus.

A venture capital exec named Hame believes in Movie Pass and helps Stacy raise a million dollars.

Well, in 2011, Movie Pass is ready for a soft launch.

Now, for $50 a month, anytime customers want to go to the movies, Movie Pass will just buy their tickets for them from another website.

Oh, what?

Worse though, the ticketing site they use is partially owned by Stacy's enemy, AMC.

Whoa.

Unfortunately, Stacy doesn't know that yet.

This is wild.

So they're paying $50.

Movie Pass will go and buy all of the tickets for you from other retailers.

This reminds me of...

There was one time I went to like a themed sushi restaurant, but they like for sure were not cooking the sushi there.

They were ordering sushi from another restaurant, having it delivered to this Titanic themed sushi restaurant, and being like, here it is, the Rose DeWitt Bicator roll.

And you're like, how is this financially worth it?

That's wild.

It feels like that at the largest possible scale.

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Sign-ups start on July 4th of 2011, and 19,000 people sign up to become Movie Pass members, or at least they attempt to.

19,000 is way too much all at once, and Movie Pass's servers crash.

Now, Jamie, you are a Movie Pass subscriber.

Were you in that first wave?

Oh no, I was a late bloomer.

I got Movie Pass so I could see Itanya 14 times in theaters and then I unsubscribed.

I loved that movie so much.

Me too.

It was my whole personality for a while.

So the launch causes quite the media stir and almost immediately, Stacy gets a call.

It's AMC and they want to know who gave Movie Pass approval to sell subscriptions to movie tickets at their theaters.

The next day, AMC releases a statement.

To protect their newly launched stubs rewards program AMC will not be participating in movie pass drama even worse AMC forces the ticketing site to back out of movie pass our hero he's unfazed In just three months, Stacey and his ragtag team of five coders finally finds a modern way to do movie tickets.

Subscribers get a fancy Movie Pass card that is essentially an unlimited gift card for movies, except that it only works at the theater and the show time a subscriber selects in the Movie Pass app.

So no more need for a ticket broker or vouchers for cinemas to balk at.

But it's like a credit card.

Yeah.

Oh my god.

So this card only works at the theater and time you select it on the app.

How do you think this magic card works?

Like, how do they know that?

They don't.

They do.

They do.

And it's creepy.

They partnered with credit card companies and made use of their geo-tracking technology.

That's like my 7-Eleven app being like, hey, noticed you're near your 7-Eleven.

And you're like, yeah, I'm always near a 7-Eleven.

You don't need to contact me.

Yeah, this is not innovative.

I would be turning those notifications off real quick.

Ugh.

Well, the convenient card allows MoviePass to expand across the country.

From 2012 to 2015, MoviePass runs on this model and expands to more U.S.

markets.

And all the while, Stacey carefully tracks their data.

He clocks that cinemas that use MoviePass double their profits.

But again, MoviePass and Stacey aren't getting any of that ticket sales profit.

To make money, they'll need to partner with a big player like AMC.

So Stacey convinces AMC's CEO to run a year-long study comparing their Stubbs rewards program to MoviePass.

And it turns out, MoviePass can make them more money.

So AMC is all in.

Things are looking up.

That is, until AMC gets a new CEO who decides that, oh, wait, we can just make the stubs more like Movie Pass.

A week later, after their initial agreement, AMC cuts Stacy loose.

One week?

Yeah.

They're really screwing with this poor man.

I know that Stacey is like tracking us, but I am rooting for him.

Yeah.

It's complicated.

Well, in 2016, things look grim for Movie Pass.

Stacy and the board decide that the best thing is for Stacy to focus on improving the app while someone else handles securing more money.

So they hire a new CEO, Mitch Lowe.

Mitch Lowe co-founded Netflix and was president at Redbox.

And around this time, Movie Pass starts doing something they'll become infamous for, tinkering with their pricing structure.

Now, it's $50 for six movies per month or $99 for unlimited movies per month.

But they're still burning money and need an investor to step up.

In the summer of 2017, a cash-strapped Movie Pass goes looking for more investors and finds Ted Farnsworth, the CEO of a company called Helios and Matheson Analytics.

Based on that name, what do you think Helios and Matheson does?

Seal user data.

Tracks you, keeps track of how many useful organs you have, waits to harvest them later.

Well, Helios and Matheson is actually a data analytics company.

But what would they want to do with MoviePass?

Well, Ted Farnsworth's history in the business world is pretty wacky.

In the 90s, he co-founded the Psychic Discovery Network, a 1-900 hotline that was promoted by Latoya Jackson and was eventually cited in a consumer warning notice from the Federal Trade Commission, though the company never admitted any wrongdoing.

Yeah.

Very good.

By 2017, Ted Farnsworth had gotten in trouble multiple times for failing to pay his federal income tax, and he's worked with not one, not two, but three companies that went public and had their values fall by 99%.

Oh my God.

And this profit-making wizard has been described by former staffers as, quote, a bumbling, lovable, optimistic sort of guy.

Men are so amazing.

Yeah, that's the kind of dude who would apply to a job and have none of the qualifications would be like,

I believe in myself.

A lot of confidence.

Yeah.

But Stacey and Movie Pass, they're in a pinch.

And after hearing Mitch Lowe's pitch, Ted Farnsworth is interested.

So Farnsworth's company takes over and lowers the price from $50 a month to $9.95.

Business genius.

50 was already losing money, and the goal is to get 100,000 subscribers.

So losing more money with more customers faster.

The $10 pricing structure, that's where I came in.

I was not the $100 haver.

Jamie, how many movies would you go to a month?

So I only, I truly only did it for like the last two or three months before they crashed.

And I basically only saw Itanya.

But, you know, 14 times.

Oh, so you're actually like really helping them in a way.

I don't know.

I feel like I did kind of, I racked up more than $30 in Itanya tickets, certainly.

All right.

So the goal is to get 100,000 subscribers.

How long do you think that takes once the new price is announced?

Really fast, right?

I mean, it's, I had not even heard of Movie Pass before the $10 thing.

And then all of a sudden, everyone I knew had it.

My guess is like a week or two, something crazy.

48 hours.

Yeah, that makes sense.

Real quick.

So, how are you supposed to make money when the movie subscription you sell is cheaper than a single ticket?

That makes no sense at all.

Wait, there's like not even a chance it makes money.

Yeah.

Right?

Like, do you have to only make money when people don't go at all?

Well, as Movie Pass's subscriber base grows, so do the problems.

AMC, who owns over 4,000 screens at this point, continues to block them out.

Also, because of the surge in subscribers, MoviePass can't get those fancy cards printed and shipped to their new members fast enough.

And this creates a customer service nightmare.

And actually, Austin, could you please help me read a typical customer service complaint from the at Movie Passes Instagram?

Okay, getting to character here.

I sent you 12 website messages, a couple of public messages, two private messages, and still I haven't received a password reset help from any of your team members.

What other kind of messages do I have to send?

Smoke signals.

I love the use of like the all cap letters to really emphasize the frustration.

That's insane.

So despite the haters, on January 9th of 2018, about half a year after Farnsworth's takeover, MoviePass hits a million subscribers.

That same day, co-founder Stacey, who keeps reminding Farnsworth that they can't make a profit pricing subscriptions at just $10 a month, is fired from the company he started.

No!

Via email.

Wow.

Stacy, no!

Although, do we feel bad for him or are we just glad he got off the train before it crashed into the ravine?

That's true, because now he has like, I told you so leverage for later on.

So in early 2018, things really start to go off the rails for Movie Pass.

With Stacey out, Movie Pass is under the chaotic control of Mitch Lowe and Ted Farnsworth.

And by June of 2018, there are somehow 3 million subscribers.

No.

Meanwhile, AMC finally launches their subscription program, which I personally think looks a lot like Movie Pass.

It costs $20 a month and gets you three AMC movies a week.

And importantly, AMC doesn't incessantly tinker with its pricing.

So Lowe and Farnsworth respond as any of us might when a competitor moves in on our idea by doing something completely unexpected.

Instead of just buying tickets for movies, they're going to make movies.

They made movies.

That guy, Farnsworth, made movies.

I didn't know that.

Yeah.

In 2018, Mitch Lowe and Ted Farnsworth form Movie Pass Ventures to help finance films.

Their first movie is Gotti.

I saw that.

No.

To see how much you remember about that bona fide blockbuster, let's play a game.

Yay!

This game is called You Gotti Be Kidding Me.

It is a multiple choice quiz.

Each answer has one correct choice.

The guest with the most most correct answers wins.

The first question.

The movie's title refers to John Gotti.

What famous Italian-American did Movie Pass's studio cast to play the convicted murderer and mob boss?

Was it A, Al Pacino?

B.

Nicholas Cage.

C.

Joe Pesci.

Or D.

John Dravolta?

It was John Dravolta.

Ding, ding, ding, it was John Dravolta.

Yes, the man from hits like Saturday Night Fever, Hairspray, and Wild Hogs was cast to play the gritty title character who narrates from Beyond the Grave.

The movie spans Gotti's entire life, which means a makeup director had to make the 60-plus-year-old Travolta look half his age.

Although, apparently, they forgot to do the same for the guy playing Gotti's son.

All right, number two, Gotti's director is none other than Kevin Connolly, the guy who played E on Entourage.

No.

Who had directed just two films before this one, plus the music video for the song Cameraphone by the game featuring Neo.

Speaking of music, what famous artist helped compose Gotti's score?

Was it A, Billy Joel?

B, John Legend, C.

Pitbull, or D, Elton John.

Ah,

oh man.

I'm going to have to go with Pitbull.

I was going to go with Pitbull as well.

Ding, ding, ding.

No.

Pitbull.

Wow.

Who is famous for Latin hip-hop and reggaeton, used some of his better-known music in the soundtrack, which is a little weird given that one, the movie is about a famous Italian-American mobster, and two, it takes place way before Pitbull came onto the music scene.

Well, he's Mr.

Worldwide, so maybe that also applies to time.

Yeah.

Yeah.

All right.

Number three, John Gotti was a New York City mobster.

So where do you think they filmed the movie?

A, nowhere.

Gotti is actually animated.

B, Cincinnati, whose tallest building would rank at about number 100 in NYC's list.

C, Hollywood, entirely within a soundstage.

Or D, New York City.

Duh, they're not cheap.

Obviously, Cincinnati.

I'll mix it up.

I'll say Hollywood, but I think Austin's right.

It was Cincinnati.

One reviewer called out the movie's rotating backdrop of anonymous suburban blocks and brownback alleys for evoking Gotti's beloved city about as authentically as Taylor Swift's Welcome to New York.

Wow.

Very dated, very 2018 criticism.

Yeah, I love the drive-by.

I'm the queen of music.

But you get the point, you know?

All right, number four.

what is Gotti's rating on Rotten Tomatoes?

Closest without going over wins.

I'm going to have to say 1%.

I'm going to go flat zero.

Jamie, ding, ding, ding.

It is 0%.

Wow.

Brutal.

Some outlets call Gotti the worst movie of the year, and the New York Post says it, quote, belongs in a cement bucket at the bottom of the river.

Wow.

Oh, no.

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Gotti was made on a shoestring budget of $10 million,

plus $5 million for marketing, marketing but it still managed to lose movie pass a lot of money more than eight million dollars so not great meanwhile subscribers are still waiting months for their special red geolocation activated credit cards to arrive one day 75 000 of the heaviest users find that their passwords are inactivated and many are unable to reset them wow it turns out that this last bug was maybe a little intentional.

Ted Farnsworth and Mitch Lowe came up with an idea to make some breakage happen for them by suspending the accounts of people who are seeing the most movies and costing movie pass the most money.

As someone who observed this happening in real time, you are inciting some of the world's most annoying people when you do that.

You're inciting people who have time to see 4,000 movies a week.

Some people with time on their hands.

Why would you do that?

Oh, yeah, that is so true.

That is the worst type of person to get on the bad side of.

They've got time to make calls, to tweet.

They will ruin your life because they, all of a sudden, 40 hours of their week have opened up.

That's like a, that's a dangerous Reddit army.

Yeah.

They suspended these accounts under the pretense of suspicious activity or potential fraud.

And they suspended the accounts of 2% of users seeing the most movies and thus costing movie pass the most money.

Then they'd run into technical problems and unresponsive customer service whenever they tried to reset their password, leaving them locked out of the app.

I mean, how messed up is that?

That is fucked up.

That's wild.

And so weirdly short-sighted.

Like, I just don't, I don't understand.

Well, that wasn't their only seemingly shady way of forcing some breakage.

They randomly selected 20% of their most active users to upload photos of their ticket stubs or have their account suspended.

Of course, when the users tried to upload their photos, the app wouldn't work.

And Movie Pass's customer service did what it does, which is be unhelpful.

Wait, can I really quickly?

I just looked up in my email Movie Pass to see what my correspondence was with them.

So I apparently also, on January 13th, 2018, was like, I've been waiting for my Movie Pass card for five weeks.

No way.

Yeah.

And then I got

the customer service email replied, this email address isn't monitored.

Thanks, the Movie Pass team.

That's so funny.

I did not remember that.

I love you for looking that up.

That's so good.

Well.

According to an FTC complaint, they allege that Lowe hand selected that random group of users.

They also allege that a quote tripwire was set, shutting off service for users who saw more than three movies a month.

That should stop the bleeding, right?

Wrong.

At the end of June, 2018, Farnsworth's company, Helios and Matheson, reports operating losses of $126 million.

That's about 4,000% worse than the year before.

Well, that's the Farnsworth touch.

Yeah.

I mean, that's what do you expect?

Their response to that, you guessed it.

More tinkering.

The unlimited plan is suspended, returns two weeks later, and then is suspended again, restricting members to only four movies a month.

Not exactly unlimited.

Movie pass subscribers will also now be locked out of seeing select films more than once.

For example, Marvel's Infinity War.

So they try to soften the blow by giving customers three free months of iHeartRadio.

What?

That's just so unrelated.

But on July 26th, 2018, the party is over.

On that day, Mission Impossible Fallout is released and Movie Pass subscribers can't get a ticket.

In fact, they can't get a a ticket to anything.

The bank that handles the ticket transactions has locked down Movie Pass's account.

That same day, Farnsworth's company borrows $5 million in emergency funding from an investor to cover their bills.

After the fallout from Mission Impossible fallout, Farnsworth and company keep doing what they do best,

implementing random changes.

Shareholders in Helios and Matheson form a class action lawsuit.

The Attorney General of New York announces a probe into Movie Pass's business practices.

So you might be asking, how does Movie Pass counter all of this bad press and reassure their customers?

Well, let me introduce you to the director of barketing.

No.

Jamie, can you describe Chloe, Movie Pass's director of barketing?

A dog who needs to fire her agents, number one.

This dog is a little

brown or black, fluffy little dog.

I don't know dog breeds.

She's small.

She's cute.

She's wearing a Movie Pass bandana and she looks afraid for her life.

It looks like an AI-generated Bijan poodle.

Well, this photo is emailed to Movie Pass users in November of 2018 after months of complaints, along with a message.

So, Austin, could you please read the email that was definitely sent by Chloe the dog in your best Chloe the dog impression?

I'm Chloe, the director of barking at Movie Pass, and I'd like to explain why from time to time you may have had a rough experience with us, but it turns out that I'm a dog and I can't talk.

What I do know is that I see these humans working like crazy to make Movie Pass better and better for you as fast as possible.

They are so grateful for your membership and support while they work it out.

We're listening, we're learning, and we're changing.

What?

I, like,

honestly, I respect the big swing that is trying to get movie, angry Movie Pass subscribers to kill a dog instead of...

That's crazy.

They're doing like

irresponsibly running their business and just like, well, people like, uh, they like dogs, right?

That's exactly it.

It's just like insulting every remaining subscriber's intelligence just to be like, oh, one picture of a dog, that'll solve it.

I mean, you know, Chloe's lucky she's a very good girl and can't be held legally liable for any of this mess because here's where the house of cards comes crashing down.

In February of 2019, Movie Pass customers file a class action lawsuit against the company alleging a bait and switch scheme.

Just a few months later, Movie Pass ceases operations, but they're not quite dead.

Oh, wait, yeah, they're dead.

In 2020, Movie Pass and Farnsworth's company file for bankruptcy.

Do you remember where you were when you heard Movie Pass died?

Probably at an AMC

using my stumps membership,

not giving one shit.

Smug as hell.

Wasn't it right when COVID came crashing down?

Probably somewhere inside, alone.

Sad.

Wishing I could go to the movies.

Yeah.

But their legal woes aren't over.

The next year, the Federal Trade Commission sues Movie Pass for those alleged deceptive business practices we mentioned before, as well as allegedly leaving customers' passwords and credit card information exposed on unsecured servers.

Yay.

They eventually settle with the FTC without without admitting any wrongdoing.

But since then, Mitch Lowe and Ted Farnsworth have been sued by the Securities and Exchanges Commission for false advertising and charged by the DOJ for securities and wire fraud.

Oh.

Wow.

So in November of 2023, Farnsworth is arrested.

No!

Farnsworth pleads not guilty.

And both of these cases are ongoing.

To date, they've denied wrongdoing.

If only the psychic network could have warned Farnsworth about all of this.

Wow.

Wow.

So let's do a little, where are they now?

Like the most cliched conceit for a sequel, Movie Pass is not dead yet.

Although you might wish it was.

During the bankruptcy fire sale, Stacey Spikes purchased Movie Pass for $140,000, which, by the way, did not include any user data.

Oh.

Because Stacey says people still like the idea of Movie Pass.

I just sort of want Stacy to be able to move on.

Yeah, he'll still learn to let go, I think.

Yeah.

Well, in 2022, Stacy relaunched Movie Pass with a new piece of tech that he'd been developing since he was fired from the company.

It's now based on credits that are redeemable for tickets.

You can either buy credits or earn them by watching ads.

And Movie Pass uses your smartphone facial tracking software to make sure you're actually watching

these ads.

Oh no.

Wait, I hate Stacy.

Yeah.

Wait, hold on.

We don't like it.

Sorry.

Sorry.

What?

Yeah.

Vulture reported the return with the headline, quote, Movie Pass is back.

And this time it's dystopian.

Yeah, let it go, Stacey.

That's so diabolical.

So here on the big flop, we always like to end on an upswing.

So are there any silver linings that you can think of?

The pillows in jail, they're soft.

You know, I saw Tanya 14 times for less than $20,

and that would not have been possible at any other time in history.

So.

Jamie, I love that.

You saw that movie so many times and venture capitalist picked up the tab.

I know.

They never do that for me.

So that's nice.

Also, Stacey Spikes, he did get back control of his company and is trying to help get people back into the movies post-pandemic, which, you know.

It's not worth my face.

Yeah, not worth our face.

Sorry, Stacey.

Well, now that you both know about the rise and fall and rebirth of Movie Pass, would you consider this a baby flop, a big flop, or a mega flop?

You know, 3 million people.

Pretty big flop.

Yeah, I'm going to go big flop too.

Yeah.

I feel like mega flop has to be reserved for when someone gets hurt.

Truly.

I mean, like, not that defrauding your customers is not hurting someone, but defrauding people out of $10

and sending a notorious flop to jail.

You know, it was a moment in time.

Big flop.

Yeah, big flop.

Well, thank you so much to our red carpet worthy guests, Jamie Loftus and Austin Nasso, for joining us here on the big flop.

And thanks to all of you for listening.

If you're enjoying the show, please leave us a rating and review.

We'll be back next week with a flop that went straight to cable and then to prison.

Abby Lee Miller, the dance mom's fraudster.

Bye.

Bye.

Bye.

The Big Flop is a production of Wondery and At Will Media, hosted by me, Misha Brown.

Produced by Sequoia Thomas, Harry Huggins, and Tina Turner.

Written by Anna Rubinova.

Engineered by Andrew Holtzberger.

Our story editor is Drew Beebe.

Our managing producer is Molly Gettman.

Our executive producers are Kate Walsh and Will Malnati for At Will Media.

Legal support by Carolyn Levin of Miller, Korzynik, Summers, and Raymond.

Producers for Wondery are Matt Beagle and Grant Rutter.

Senior story editor is Phyllis Fletcher.

Managing producer is Joe Florentino.

Music supervisor is Scott Velasquez for Freeson Sink.

Our theme song is Sinking Ship by Cake.

And executive producers are Lizzie Bassett, Morgan Jones, and Marshall Louie for Wondery.

We are

on

a sinking ship.

We

are on

a sinkingship.

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