You open movies.txt twice and don't close either one. Delete line #5, the first open is not used. It would work better if you open the file in a function.
def view_existing():
all_movies = open("movies.txt", "r").readlines()
## print the all_movies list and allow the user to select one
## something like this, although this is simplified
for ctr, rec in all_movies:
name, genre, desc = rec.strip().split("**")
print "%5d %-20, %-20s %-s" % (name, genre, desc)
def add_new_movie():
fp_out = open("movies.txt", "a")
enter_another = True
while enter_another:
msg='Please enter the name of the movie'
# etc.
myString = "**".join(fieldValues) ## the fields require a delimiter for reading
fp_out.write("%s\n" % (myString))
msg="Enter another movie?"
# etc.
fp_out.close()