DOJ: Former MoviePass Executive Arrested for Allegedly Embezzling $260,000

A former executive at subscription movie theater ticket service MoviePass has been arrested on a federal grand jury indictment alleging he embezzled $260,000 from MoviePass’ parent company, New York-based data analytics firm Helios & Matheson Analytics (HMNY), to repay money he borrowed to produce an event at the Coachella music festival in Indio, Calif.

The Department of Justice reported that Khalid Itum, 42, of Los Angeles, was arrested by the FBI on Feb. 21, charged with two counts of wire fraud and two counts of money laundering.

Khalid Itum

At his arraignment in U.S. District Court in Los Angeles, Itum pleaded not guilty to the charges, and an April 18 trial date has been scheduled. He was released on $75,000 bond.

MoviePass was a New York-based company that charged subscribers a flat monthly fee in exchange for credits they could spend on movie tickets from any theater in MoviePass’s network of participating cinemas. The service and HMNY filed for bankruptcy in 2020 after blowing through hundreds of millions of investor dollars.

If convicted, Itum could face a statutory maximum sentence of 20 years in federal prison for each wire fraud count and up to 10 years in federal prison for each money laundering count.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

According to the indictment, Itum, who was hired in November 2017 to oversee daily operations at MoviePass before departing the company in March 2019, organized a party at the annual music festival, using MoviePass funds to pay for it. Neither MoviePass nor HMNY officially participated in the Coachella event.

According to the indictment, Itum allegedly submitted sham invoices to HMNY for services purportedly rendered by his production company and a third party. Itum allegedly had HMNY employees wire money from MoviePass and HMNY accounts to his production company’s bank account to pay the sham invoices. Itum allegedly concealed his scheme by lying to HMNY’s auditor that his production company had been used to pay legitimate MoviePass expenses from the 2018 Coachella festival.

Itum’s lawyer, in a statement, denied the charges, contending the executive had received clearances from MoviePass and HMNY regarding the funds.

“The prosecutors have got it wrong,” read the statement. “Khalid Itum worked earnestly and honestly for MoviePass. The only money paid to him or his consulting company was for genuine services provided to MoviePass and its corporate parent, and the money was spent in entirely legitimate ways.”

MoviePass, which has been acquired by its original founder, is attempting to relaunch the service.

SEC Files Fraud Lawsuit Against MoviePass Executives Mitch Lowe, Ted Farnsworth

The Securities and Exchange Commission has filed a lawsuit against former MoviePass executives Mitch Lowe and Ted Farnsworth, alleging the two made “false and misleading statements” about the shuttered movie ticket service’s profitability. The suit also names former MoviePass VP Khalid Itum for submitting false invoices.

Lowe, a former Netflix executive and president of Redbox, and Farnsworth, operating under MoviePass’ publicly traded parent Helios and Matheson Analytics, helped re-launch and market MoviePass, which at its peak had more than 3 million subscribers paying $9.99 monthly for unlimited access to a select number theatrical releases every 30 days. The populous concept quickly became financially unsustainable as MoviePass had to pay theatrical operators the face value for each ticket subscribers used.

Helios and Matheson Analytics filed for Chapter 7 bankruptcy protection on Jan. 28, 2020, but not before generating hundreds of millions of dollars in losses.

“Faced with debilitating negative cash flows — rather than tell the public the truth — Farnsworth and Lowe devised fraudulent tactics to prevent MoviePass’s heavy users from using the service, and falsely and misleadingly informed the public that usage had declined naturally or due to measures the company had employed to combat subscribers’ purported violations of MoviePass’s terms and conditions of service,” read the complaint.

Lowe’s lawyer, William McGovern, with the firm Kobre & Kim, disagreed with the suit’s wording and negative tone.

“We disagree with the SEC’s characterization of Mitch’s conduct, including allegations about statements made about the progress in building MoviePass,” McGovern wrote in a statement.

“Bringing new commercial concepts to the market can be disruptive and uneven. Mitch remains proud of what was accomplished at MoviePass and intends to work within the legal process to resolve these allegations.”

A spokesperson for Farnsworth said the complaint concerns issues publicly disclosed almost three years ago.

“Mr. Farnsworth continues to maintain that he has always acted in good faith in the best interests of his companies and shareholders,” spokesperson Chris Bond wrote in an email.

Adam Fee, a partner with the law firm Milbank, which is representing Itum, said the former VP has been unfairly targeted by the government in the complaint.

“Khalid is proud of the character and integrity he displayed throughout his time at MoviePass, and we look forward to challenging the SEC’s meritless allegations against him in court,” Fee wrote in an email.

Meanwhile, Farnsworth and Lowe reportedly settled a separate litigation complaint with the Federal Trade Commission and paid another $400,000 settlement with four California District Attorneys offices.

Q&A: Mitch Lowe on His New Book and Turning Hollywood ‘Upside Down’

Mitch Lowe is a veteran business and entertainment executive whose impressive track record includes stints as a video rental store owner, president of Redbox and founding executive of both Netflix and MoviePass. Today, Lowe gives inspirational speeches around the world to corporations, conferences and students, sharing stories of innovation, disruption and facing the challenges of building new products and services.

Lowe has just written a book, Watch and Learn: How I Turned Hollywood Upside Down With Netflix, Redbox, and MoviePass — Lessons in Disruption, which is being published this month by Hachette Go, an imprint of New York book publisher Hachette Books.

Lowe was one of the early pioneers in the movie rental industry, opening video rental stores in the early 1980s and building a chain of stores in Northern California called Video Droid. He was active in the trade association representing that nascent industry and served on its national board and as president. In the early 1980s, Lowe tried to launch VHS video rental kiosks as well as a subscription-based website provider. In the late 1990s Lowe joined Marc Randolph and Reed Hastings at Netflix as the video industry expert. As VP of business development and strategic alliances for Netflix’s first five years, and as a member of its core executive team, Lowe led many of the partnerships that drove new subscribers to join Netflix, such as its partnership with Best Buy and DVD manufacturers.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

Lowe left Netflix in 2003 after a successful IPO and joined the business development team at McDonald’s Ventures to build a DVD vending machine business called Redbox. He served as its COO and president for eight years, growing the company from $36,000 in first-year revenue to more than $1.5 billion in revenue. He left in late 2011 and began investing in startups in various spaces, eventually joining MoviePass as its president in 2016. Most recently, Lowe received the “Distinguished Mentor Award 2021” from The Abrahamic Business Circle.

Over the past few years, Lowe has also produced several movies, including Gotti, American Traitor: The Trial of Axis Sally and 10 Minutes Gone, and the documentary Shirin Ebadi Until We Are Free (which premiered at the Venice Film Festival Sept 5.)

Media Play News recently spoke with Lowe about his new book.

MPN: Mitch, over the last 30-some years you’ve touched down in virtually every aspect of the home entertainment business. Now you’ve added “author” to your credits. What prompted you to write a book?

Lowe: For the last six years, I have traveled all over the world giving speeches at company meetings, conferences and universities. At every event I am asked a series of questions, such as “How did Netflix change the way we enjoy entertainment?”; “Why did Netflix succeed and not Blockbuster?”; “What is it I need to learn to start my own company that can be successful?”; and more. I have learned that there is no such thing as “always true” answers to these questions. I believe the best way is to answer them yourselves — and hearing the stories behind how I and the amazing people I had the opportunity to work with solved these challenges is a great way to figure it out on your own. So I decided to use the time in the pandemic to share some of these stories in a book.

MPN: How did you go about securing the book contract?

Lowe: I asked friends I knew who had written books for their advice and they introduced me to advisors who help first-time authors navigate the world of publishing. After several interviews I contracted with a former editor at the Harvard Business Review to teach me how to find an agent and then a publisher. She brought in another advisor, who taught me how to write, and after putting together a book proposal which included a draft chapter, story outline and a competitive book description, I found an agent. The agent shopped my book to a half dozen publishers. Several were interested and we settled on the one that agreed to make the most effort in promoting the release.

MPN: How is distribution being handled, and what kind of promotional activities are you doing? 

Lowe: Hachette has been promoting the book to retail for some months now and their fantastic PR team has had me do a dozen or more podcasts that have relevant listeners and well-known podcasters along with many interviews in both the business and entertainment fields. Lastly, I am doing book signings and bringing books to sign at the speeches I give.

MPN: Give us the three most important takeaways from the book. 

Lowe: Don’t take too long to decide what you are going to do. Become an expert in your field. Remember that nothing stays the same and success is fleeting.

MPN: From video retailer to Netflix, Redbox and MoviePass pioneer, if you could go back in time, is there anything you would’ve done differently?

Lowe:  I would have paid more attention to building allies.

MPN: What is the best piece of advice you ever received? 

Lowe: Slow down and focus on one thing. (I did not follow that advice.)

Mitch Lowe’s book may be purchased here at

MoviePass Subscription Theatrical Ticket Service Claims to Be Relaunching Aug. 25

MoviePass, the shuttered online subscription theatrical ticket service, is planning to re-emerge Aug. 25 from the ashes of failed entertainment disruptors — for a limited time.

On the service’s beta website, interested parties are greeted with a a countdown clock and a cautionary message that the MoviePass Beta App will be accessible by invite only. When the timer reaches zero the waitlist will be open for five days. All who join the waitlist will receive priority access to the service and 10 friend invites.

Once the waitlist is closed the only way to join service apparently will be through an invite from a friend.

Stacy Spikes, who was an original co-founder of MoviePass before selling the company to defunct Wall Street firm Helios and Matheson Analytics in 2017, repurchased the assets out of bankruptcy with plans to relaunch the service.

At its peak, MoviePass had more than 3 million subscribers paying $9.99 monthly for unlimited access to a select number theatrical releases every 30 days. The populous concept quickly became financially unsustainable as MoviePass had to pay theatrical operators for each ticket subscribers used.

Helios and Matheson Analytics filed Chapter 7 bankruptcy on Jan. 28, 2020.

The concept did spawn AMC Theatres Stubs A-List, a $19.95 monthly service that allows AMC Stubs loyalty members to see up to three movies per week.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

Ex-MoviePass Chairman Ted Farnsworth Joins Digital Media Company Vinco Ventures as Co-CEO

Vinco Ventures, a digital media and content technologies holding company, July 14 announced the appointment of Ted Farnsworth as co-chief executive officer alongside Lisa King, current CEO of Vinco Ventures. Farnsworth and King will lead the company as co-CEOs.

Farnsworth, who infamously attempted to bring the subscription revenue business model to theatrical movie industry through the short-lived MoviePass, resurfaced via his ZASH Global Media and Entertainment Company. ZASH recently merged with Vinco, and together with ZVV Media Partners, acquiring AdRizer and Lomotif — the latter helping users create social media videos.

The Vinco press release claims Farnsworth has “built many successful companies and is considered an expert in strategic development, marketing, public relations, consumer behavior and direct response marketing.”

Farnsworth exited MoviePass when the platform’s parent company, Helios and Matheson Analytics, declared bankruptcy in 2020 after blowing hundreds of millions of dollars of investor money, which led to litigation and a FTC complaint.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

“I speak for myself and the entire Vinco team when I say how thrilled we are to welcome Ted to management in an official capacity as co-CEO,” King said in a statement. “Vinco and ZASH have begun to streamline our businesses. With Ted as co-CEO, together, we can more efficiently execute on our strategic growth plans with a clear understanding of our Company’s combined vision and plan.”

A component to Vinco’s growth strategy is Lomotif in combination with AdRizer and Mind Tank, a short-form video platform Vinco claims drives user experiences with its interface and patented editing tools. By utilizing Lomotif’s mobile or web-based platform, Vinco says the platform’s ad and marketing tools can help drive engagement and grow revenue with premium content across its ecosystem.

Farnsworth and King face a challenging corporate relationship. Vinco ended its most-recent three-month fiscal period with a net loss of $379.1 million on revenue of $11.5 million. The company’s stock is trading around the SEC minimum $1 per share threshold.

MoviePass Founder Seeks to Create a ‘Virtual Hollywood’ With New Media Company

If Hollywood loves a comeback, Ted Farnsworth, former chairman of the corporate parent of the shuttered MoviePass theater subscription service, would appear to be first in line for the latest sequel.

Farnsworth’s Zash Global Media and Entertainment Corp., a content distribution company, Jan. 21 announced the signing of a merger agreement with Vinco Ventures to create “exciting acceleration” and growth in live-streaming content, video-sharing, distribution and production.

Ted Farnsworth

Farnsworth, together with media investor Jaeson Ma, an early investor in TikTok and the Triller video-sharing social platform, and social monetization executive Vincent Butta, aim to build a “virtual Hollywood,” providing content partners and producers with “state-of-the art” analytics and distribution technology.

Customized analytics is what Farnsworth and former MoviePass CEO Mitch Lowe sought to sell movie exhibitors when launching the $9.99 monthly all-you-can-watch theatrical pass. The too-good-to-be-true concept quickly gained 3 million subscribers and Wall Street backers before the reality of reimbursing theaters face value for tickets used by subscribers was a fiscal black hole. The service shuttered in 2019 after running out of money in 2018.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

But that was so yesterday. Brian McFadden, chief strategy officer, said Triller generated more than two billion views over a 30-day period on Facebook, adding the network has more than 350 million followers. The Triller app enables users to edit and synchronize videos to background tracks using artificial intelligence. TikTok recently sued Triller in a patent dispute.

“We are poised to revolutionize the next generation of video distribution,” McFadden said in a statement without elaborating.

Farnsworth said Zash was formed to “drastically reimagine” today’s global entertainment marketplace by combining “first-class talent,” resources and technology in this “dramatically changing” environment.

“We utilize data, meta data and the IoT [Internet of Things] to meet the ever-changing engagement and content demands of content developers, consumers and creators,” added Butta.

Ma said social interactive video platforms are taking over the minds of Gen Z and Y consumers. Live events are being transformed into virtual and augmented realities. Building direct-to-consumer brands through the influencer economy is the future of the e-commerce-driven marketplace, according to Ma.

“We now live in a digital world and there has yet to be a media and entertainment force to capture this disruption on all levels,” he said, apparently unaware of a company called Netflix, which ended 2020 with $30 billion in revenue, 203 million subscribers worldwide and a content production pipeline that is re-defining Hollywood.

Regardless, McFadden believes the combined companies and management will expedite scale of production and creative services to meet “growing content creation and distribution needs.”

“We are excited to merge with Zash in our ever-evolving pursuit to ‘be big,’” he said.

The news sent Vinco Ventures skyrocketing nearly 200% ($3) to close at $4.56 per share.

Netflix, Redbox Veteran Mitch Lowe Says Discovery Is Biggest Challenge in New Entertainment Landscape

Discovery is the biggest challenge facing the new entertainment landscape of endless choice, said Netflix co-founding executive and former Redbox president Mitch Lowe.

“I think if anybody can figure out how to solve this problem for big segments of the population, it’s a real big opportunity in the business, and no one’s doing it,” he said during a keynote presentation for the OTT.X@Pipeline 2020 online conference Dec. 9.

“On one side, people say they want all the choices in the world, but on the other they go, ‘But I don’t want to spend time wading through them,’” he noted. “[At kiosk rental company Redbox] we found that when we created that light box, that has I think 66 box arts on it, that was the maximum people could go through. Anything more and anything less was counterproductive and in fact constrained consumption.”

Subscribe HERE to the FREE Media Play News Daily Newsletter!

He also pointed out limitations of computer algorithms in helping consumers find what they want to watch, noting one algorithm he remembered that recommended that folks who watched Willy Wonka would like to watch The Shining.

Discovery is key because “people don’t want to work hard to find something good, but they also don’t want to spend their time watching something that they end up turning off,” he said.

Recalling his early days as a video store chain owner and president of OTT.X’s predecessor the Video Software Dealers Association, Lowe said his experience talking with customers informed his later, groundbreaking career path.

Follow us on Instagram

“What I learned one on one with customers was how they think about entertainment,” he said.

In fact, he noted, he met Netflix founder Marc Randolph at a video convention.

“If you look at my career at Netflix, I was really the video guy,” he said. “I was the guy who knew the entertainment industry.”

In a callout to the video store industry veterans at the online conference, he said, “It’s really wonderful to be back with so many familiar people. I think this is kind of a little bit of a homecoming.”

Asked about Warner’s recent decision to send new releases to its streaming service HBO Max concurrent with theatrical release, Lowe bemoaned the potential damage to the theater business.

“I absolutely love the experience in movie theaters,” said Lowe, who was also at one time CEO of MoviePass, a now-defunct theater ticket subscription service.

He noted the importance of a shared experience in theaters, where the audience can jump in tandem at a horror film or laugh together at a comedy.

He touted the subscription model for theaters, which some chains such as AMC have instituted.

“In the end, the entity or the business that has that one to one relationship with the consumer is the real winner,” he said, and that’s “why companies like AMC did not like companies like MoviePass getting between them and their customer.”

Moviefone Sold in MoviePass Bankruptcy Proceedings

Moviefone, the iconic voice of the now-discontinued telephone service marketing theatrical releases and ticket sales, has been sold for $1 million in bankruptcy proceedings involving Helios and Matheson Analytics, which also owned the defunct MoviePass subscription ticket service.

Founded in 1989, Moviefone offered callers movie, ticket and screening information nationwide. The service was acquired for $388 million in 1999 by AOL, which in 2017 merged with Yahoo to become Oath. Helios and Matheson bought the brand in 2018 for $8 million from Oath in a largely stock-based transaction. (Oath in 2019 was renamed Verizon Media.)

Follow us on Instagram

In the Internet era, Moviefone morphed into an online service through an agreement in 2001 with The service in 2012 partnered with Fandango, which is owned by NBCUniversal.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

RIP: MoviePass Owner Files for Bankruptcy

Helios and Matheson Analytics, owner of the shuttered Movie Pass theatrical ticket subscription service, among other businesses, has filed for Chapter 7 bankruptcy protection.

Under a Chapter 7 bankruptcy filing, the debtor’s assets are sold off to pay the lenders (creditors) whereas in Chapter 11, the debtor negotiates with creditors to alter the terms of the loan without having to liquidate assets.

Per a regulatory filing, New York-based HMNY said that after “considering” strategic alternatives, the company and its subsidiaries MoviePass and Zone Technologies, each filed a voluntary petition for relief under the provisions of Chapter 7 of Title 11 of the United States Code in the United States Bankruptcy Court for the Southern District of New York on Jan. 28, 2020.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

HMNY said its remaining board members — Prathap Singh, Gavriel Ralbag, Muralikrishna Gadiyaram and Joseph Fried — had tendered their resignations, leaving the former high-flying entertainment disruptor without a board.

In addition, Parthasarathy Krishnan, interim CEO, and interim CFO Robert Damon resigned their positions.

The bankruptcy court will assign a trustee to HMNY to determine distribution of the company’s assets, including MoviePass Ventures, a subsidiary founded to co-acquire films with film distributors.

Titles included American Animals, John Travolta’s Gotti and The Row with Lionsgate. The company also co-produced a series of low-budget direct-to-videos with Bruce Willis, including 10 Minutes Gone.

HMNY acquired upstart MoviePass in 2016, and together with former Netflix/Redbox executive Mitch Lowe, set about upending the theatrical business with a $10 monthly, daily access to any exhibitor’s screening.

The venture proved a hit with consumers as more than 3 million joined MoviePass, but a fiscal failure as the platform was on the hook paying theaters face value for every ticket used by subscribers.

The service lost hundreds of millions of dollars, and despite venturing into movie productions, distribution and a reverse stock transaction, could not elevate HMNY’s stock value above a penny.

MoviePass shut down four months ago with both Lowe and HMNY boss Ted Farnsworth exiting the company.


Ex-Helios and Matheson Analytics CEO Looking to Buy MoviePass Assets

Former Helios and Matheson Analytics CEO Ted Farnsworth just doesn’t know when to quit.

A day after stepping down as CEO of the parent to shuttered MoviePass ticket subscription service and related businesses (MoviePass Films, Moviefone), Farnsworth reportedly is cobbling together a group of investors to buy select MoviePass assets.

According to The Wall Street Journal, which cited HMNY internal documents, including Farnsworth’s resignation letter, the executive eyes continuing MoviePass Films, which generated several original releases starring Bruce Willis.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

Whether Farnsworth — a longtime MoviePass cheerleader along with the service’s CEO Mitch Lowe — would bring back MoviePass is unclear.

Launched in 2017, the $9.95 monthly ticket service offered subscribers daily access to a non-3D theatrical screening. At its peak, MoviePass had more than 3 million subscribers eager to take advantage of a business model that hemorrhaged money.

The service sought to make deals with exhibitors who were paid face value by MoviePass for every ticket used by subscribers in exchange for user data.

Chains such as AMC Theatres, Regal Cinemas and others wouldn’t bite, opting instead to launch competing ticket services.

Despite several attempts to re-invent the MoviePass business model, investors pulled the plug on HMNY shares — especially after two reverse-stock option split attempts.

Whether investors would line up behind Farnsworth for another edition of MoviePass remains to be seen. HMNY could also sell the assets to a third party.