Robert De Niro was almost my 50-50 partner in MoviePass — and he showed me the 'Raging Bull' boxing ring to try to seal the deal
George Kerrigan; Kristine Noble; Dia Dipasupil/Getty Images; Rachel Mendelson/Insider
- Entrepreneur Stacy Spikes chronicles in an excerpt from his book "Black Founder" how he came up with the idea for MoviePass.
- A friend put Spikes in touch with De Niro, they nearly became 50-50 partners on the business.
- Spikes recalls speaking to De Niro in front of the boxing ring from the actor's acclaimed 1980 movie "Raging Bull," which the actor has at his country home.
In the early 2000s, Stacy Spikes, a former music and movie marketing executive who recently had created the Urbanworld Film Festival, was fueled by a new idea: a subscription service for movie theaters. It would be the start of his quest to get what would become known as MoviePass off the ground.
Here in an excerpt from his memoir "Black Founder" (available on Tuesday), Spikes recalls how the idea came to him one night while speaking to his wife Marianne, and how Robert De Niro almost became an early investor.
One night, I said to Marianne, "What if we made a Netflix for the movie theater industry? It's ripe for that kind of disruption." Marianne smiled and humored me. She was used to my crazy ideas. But here was my thinking: On average, the movie industry spent $7 to $10 to acquire a customer to see a movie. And when a ticket is purchased, half of that revenue is split with the theater. Most of the time, the theatrical window was breakeven, and all the profit had to be made downstream. If, however, there was a base audience of subscribers, you could eliminate the heavy, recurring acquisitions costs and pull in a higher profit.
My initial thought was we could use this model to help get some of the films from the festival distributed. We would take the regular attendees of the festival, create a subscriber base, and that would fund at least one release in theaters every month, and ensure more films would get seen. The monthly membership could be equivalent to the cost of three visits to Starbucks: $20-$30.
Courtesy of Kristine Noble
I started to float the idea to some of the industry vets I respected
I put together a deck and called the program Movies Unlimited. One of the first people I approached was Jack Foley. I invited him to lunch and talked over the idea. He loved it and said we should discuss it with Travis Reid. Travis was still CEO of Loews Cinema at the time, and he loved the idea so much that he granted me permission to run a test inside of the Loews ticketing system. He told me that just a year earlier, AMC had tested a similar concept in one market and had gotten great results, but rumor had it that the program was discontinued due to some disagreement with studios about how the money would be counted. (I was later able to speak with one of the people who ran the AMC trial and he confirmed that the financials actually did work.)
With Travis's go-ahead, I needed to figure out how to make it work. Fandango and MovieTickets.com controlled the ticketing landscape, but purchasing tickets on those platforms took about five minutes. Our goal was to streamline the process and make it possible for a subscriber to be able to purchase a ticket on our platform in less than sixty seconds.
The iPhone and mobile apps were still a few years away, so we did the transaction through SMS protocol. This was the user flow for the transaction:
Step 1: Customer types in movie and zip code. Computer generates the four nearest theater locations.
Step 2: Customer picks a theater. Computer lists showtimes.
Step 3: Customer selects showtime. Computer confirms movie time and ticket.
Step 4: Customer confirms transaction. Computer sends confirmation number.
Step 5: Customer puts confirmation number in the kiosk at the theater to get tickets.
The first four steps took forty to sixty seconds and were smooth and easy. I worked with a company out of Australia called Soprano Design to build the backend. This was all coming together rather quickly. After we completed the code, we tested it inside the Loews system at their 34th Street location. I sat at a computer and made the first purchase. The team was able to confirm that the ticket had been removed from the inventory and I was able to walk to the kiosk in the lobby and retrieve the ticket. End-to-end success.
Things were going smoothly until we hit our first bump
Travis called to let me know that Loews and AMC were merging and to continue with the subscription program I would have to take it up with Peter Brown, the CEO of AMC. Travis said he would make an intro.
Peter was based in Kansas City, Missouri, so I flew down and met with him. He had just completed the Loews acquisition and closed a major deal with IMAX, and I got the sense that he was meeting with me more as a favor to Travis than anything else. Peter explained that he believed IMAX was the future of the business and gave the theaters the ability to charge a higher price for a ticket. I tried to push my subscription idea, but it fell flat. He thanked me and wished me luck.
Travis still believed that what I was working on had merit and could help the industry, so he set up meetings for me with Regal and Cinemark, which were the other two top theater chains in the country. They, along with AMC/Loews, made up 50 percent of all ticket sales in the nation. They were kind, but my vision just wasn't resonating with any of them. The industry only seemed interested in the ability to upcharge the customer.
Richard Branson's Virgin Cinemas actually pioneered the all-you-can-eat theatrical subscription model in the UK in 1999, and soon similar programs were popping up across Europe. Yet I couldn't get any investors to back a similar product in the American market. I went to theater chains, studios, and investors all over the world for five years and could not gain interest or funding.
George Kerrigan
I was sinking all of our extra money into this new company and not getting any traction. I just couldn't bring this idea to life
There was a joyous event in my life however. In 2006 Marianne and I were blessed with the birth of our daughter, Ellery. I had heard it said that you don't realize you can love something so much until you become a parent. I am here to confirm that it's true. Your life forever changes in ways you can't imagine. My life took on a different purpose and meaning. Business was important as a way of giving my family a quality life, but it was no longer the sole purpose of my existence. Marianne and Ellery were the center of all things. This was a shift from when the world was just about my mission around a product. I used to live to work, but now with this family, I worked to live. Family gave my life a different purpose and meaning. I started to think about my legacy. Am I making the world a better place? Am I leaving it better than I found it? I don't think I would have been capable of seeing my work in that perspective before I had a family.
I continued to tread water on my subscription idea, but things were slow going. One Saturday, a dear friend of ours named Peter called and asked how the movie subscription idea was coming. He told me he had a conversation with his new employers, and they were interested in hearing more about it.
He was very cryptic about who his new employers were, but it was the first good news on this front that I had in a long time, and I agreed to meet with these mysterious potential investors. The very next day, I took a taxi to the Central Park West address Peter had given me. I gave my name to the doorman, and he seemed to be expecting me. He directed me to the elevator, and as I rode up to the apartment, I questioned if I was crazy and if this was another wild-goose chase.
When the elevator doors opened, Peter was there to meet me. He wore a Cheshire cat grin and leaned in to whisper in my ear, "I'm working for Robert De Niro and his wife, Grace, and I told them about your project and they want to meet you."
Now I really thought this was all just a joke. De Niro? Sure.
Before I could respond, in walked a tall, beautiful woman who introduced herself as Grace Hightower. She was toweling off from a workout and apologized for her appearance. Her handshake was strong and confident. She was gracious and thanked me for coming to meet with them and asked if I needed anything. She said Bob would be down shortly. Moments later, Robert De Niro entered the room. He was very complimentary and anxious to hear more about my subscription concept.
I laid out my grand vision of the future and how I believed subscription could radically change our industry. They were an audience as engaged as any I had met with, and they deeply understood the business implications. Bob's questions showed his experience and depth of knowledge of the inner workings of the ticketing and advertising side of the business.
Leaving the meeting I didn't know what to think. The whole situation was surreal in every sense of the word. What shocked me more was a few days later, Grace asked if my family and I would be willing to come and spend the day at their country house that coming weekend. Naturally, we accepted.
Their home was unpretentious and charming, and both Grace and Bob were gracious hosts. Grace swept Ellery up in her arms and introduced us to some family members. Bob was sitting alone by the pool when we arrived, and Grace escorted me over and left the two of us alone to talk. We talked very little about business; mostly we discussed life and family. Then Bob stood and said he had something he wanted to show me. He led me into the house and to a large room dominated by a full-size boxing ring. I thought Bob was going to tell me about his workout routine with his trainer but instead, he told me it was the original boxing ring from the movie "Raging Bull." Bob told me how he saved up his money to buy it. I let my hand glide across the ropes and felt the smooth floor. As we leaned against the ropes, Bob talked about fighting for your dreams, believing in yourself, and how you must never give up.
United Artists/Getty
He reinforced the work ethic that I had heard from so many others. His words truly inspired me and have stayed with me to this day
The following week, Grace asked me to lunch, where she let me know that she and Bob were interested in investing and becoming partners in the company. She personally wanted to be a fifty-fifty partner. We began the process of lawyers and paperwork. Over the next few months, there was a long slow volley back and forth. There were many different gatekeepers working on the De Niro/Hightower team. I had a meeting with one such gatekeeper who called me to the Tribeca offices for a meeting. We sat in his small, cramped office where he said the Tribeca organization wanted to make me an offer. They're interested in buying both the Urbanworld Film Festival and the movie subscription company for one million dollars. I didn't have to think long about it. I politely said no, thank you. He said they had looked into my company and thought it was a fair offer. He also added that I could be employed and continue working for Urbanworld for at least the first six months of the new ownership. I thanked him again and left.
I immediately called Grace and said, "What was that?" She said she and Bob had no idea about such an offer being made. Bob asked me to personally come to his office, where he apologized to me and said he had no idea and he hoped it did not offend me. He and Grace still wished to do business with me. I let him know I was not offended and really appreciated his calling and meeting with me personally. I have to tell you, no matter what happened, the way Bob handled the situation spoke volumes to me and made me even more eager to partner with him. Since then, I have always tried to conduct myself with that level of direct personal accountability.
We got things back on track, but the paperwork was being held up for various reasons and after a lot of back-and-forth, I just wasn't able to get the deal across the line.
I had run up a legal tab too deep for me to chase any further. I sent Grace a heartfelt email letting her know that I needed to bow out and move on. I told her perhaps now was not the best time and thanked her and Bob.
I don't believe any encounters on your journey of building a business are ever wasted
Perhaps the entire reason for that part of the journey was the time spent with Bob and the "Raging Bull" ring. His words echoed and have stuck with me. He gave me a gift that could not be bought. He gave me an unforgettable reminder of the importance of perseverance. I think the biggest thing that Robert De Niro taught me on that day is the importance of taking time and encouraging others. Pay your blessings forward. Sometimes a few kind words can keep a person going. It's important to know that although the path may be dark and lonely at times, if you just keep going, you will make it.
From Black Founder: The Hidden Power of Being an Outsider by Stacy Spikes. Copyright © 2023 by the author and reprinted by permission of Dafina Books, an imprint of Kensington Publishing Corp.
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