Image by MoviePass/Drew Osumi
previous movie pass For Mitch Lowe, CEO, and Ted Farnsworth, CEO of parent company Helios & Matheson Analytics (HMNY), what was once the bright future of subscription-based movie-ticketing services. Most recently, he’s been in serious trouble with the SEC over securities fraud and other charges that could land him in prison for 20 years.
When it acquired MoviePass in 2017, it cut the monthly fee from $50 to $9.95, thus kicking out co-founder Stacy Spikes. It was supposed to be an unlimited movie subscription that promised no blackout hours. This was a bold statement that left most moviegoers scratching their heads as to how it was even possible.
Generating a staggering amount of interest, more subscribers began pouring in. That’s when they found their subscriptions to be rife with substandard service. It provided a poor viewing experience and customers left in droves, forcing the company to close in 2019.
what exactly did they do?
SEC investigation Lowe and Farnsworth accused investors of misrepresenting themselves and making them believe that the $9.95 subscription fee was viable. The two CEOs also created false documents about non-existent data analytics capabilities, claiming they could generate additional revenue. A third party was also named in the case because Khalid Itum received his $300,000-plus bonus, which was billed willfully misrepresented as services.
In a very dirty move, Lowe and Farnsworth ordered MoviePass employees to incorporate tactics that deny their loyal subscribers actually enjoy an unlimited movie-watching experience. If all these charges come to a head and the maximum sentence is given, he could face up to 20 years in prison. However, both involve lawyers and most likely become legal rodeos before all is said and done.
what happened now?
in the meantime, Stacey Spikes at the helm With MoviePass, he gets a piece of the first company he co-founded. A three-tiered membership allows subscribers to pay $10, $20, and $30 in markets where Spikes partners with his 25% of nearly 5,000 venues nationwide. now, MoviePass can get you going You have to treat your customers like you did when you first put your trust in the company all those years ago.
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