Ted Farnsworth is the former CEO of MoviePass and had the clever idea to charge $9.95 a month for unlimited movie screenings. Admitted to defrauding investors in a subscription company. According to the Justice Department, Farnsworth pleaded guilty. Charged with one count of securities fraud and one count of conspiracy to commit securities fraud. There is a maximum prison sentence of 25 years.
If you're unfamiliar with the MoviePass story, Farnsworth wasn't the company's founder. Founded by Urbanworld Film Festival founder Stacy Spikes as a relatively simple subscription service designed to entice people to go to the movies a little more often, Farnsworth is the head of analytics firm Helios and Matheson, which Buy a majority stake in MoviePass in 2017, and the company is finally pushing the envelope to allow viewers to watch one movie per day for just $9.95 per month.
Farnsworth's plan succeeded in attracting many members—More than three million people Apply for service And that's where the problem begins, as Farnsworth goes on a media trail touting the business's prosperity and claiming that the company will profit from selling customer data. Behind the scenes at MoviePass Hemorrhaging cash– It didn't take long before MoviePass started backtracking on its promise of unlimited movies as it began. Popular Movies Power Outage Institute– Experiencing a service interruption problemand Prices and plans change with little warning.–
It was clear that MoviePass was doomed to fail once the unlimited plan launched, but Farnsworth claimed to investors that the price was sustainable and that it would make a profit from subscription fees alone. Turns out it wasn't, as the DOJ found that MoviePass lost money on the plan. As for Farnsworth's customer data play, that too is smoke and mirrors. The Justice Department said his analysis firm Ultimately, MoviePass never had a revenue source outside of subscriptions—and that cost the company so much money that Farnsworth recommended that employees take control. users to prevent them from using the plan they paid for
After Farnsworth Cause MoviePass to go bankruptHe apparently ran the playbook again with another company called Vinco Ventures, according to the DOJ. Farnsworth and his co-conspirators extracted cash from investors by lying about the business's position. At the same time, they transfer cash directly to their wallets.
Farnsworth's sentencing will take place later this year. Meanwhile, MoviePass is back under the ownership of founder Stacy Spikes, and so it is. Reported to be profitable (Although service users Complain regularly about various defects and problems)