After slashing the price of its subscription movie ticket service, MoviePass has been flooded with new subscribers and has had a tough time meeting demand.
After the company last month cut its prices from as much as $50 a month to a flat $9.95 monthly fee, 150,000 people signed up within two days, a MoviePass representative said. As of Tuesday subscriptions had reached 400,000, according to the company representative.
MoviePass has struggled to absorb all those new customers. In order to use the company's service to purchase movie tickets at their local theater, customers typically need to use a MoviePass-issued debit card. In a blog post published on its site on Wednesday, MoviePass warned customers they should expect to wait two-to-three weeks to get their card.
"Though we increased our staff in anticipation of the new plan, the response has been overwhelming," the company said in its blog post. "In an effort to address all of your questions, we’ve tripled the size of our team, which is working to respond to everyone as quickly as possible."
To better meet the demand, MoviePass has not only hired customer service workers, it's having them work longer hours, the company said in its post. It's also opened an additional fulfillment center to process card orders.
Although MoviePass typically ships cards on a first-come, first-served basis, the company's order queue was "shuffled" recently and some cards were shipped out of order, potentially contributing to the delays, it added.
MoviePass' customer service employees have "received hundreds of thousands of emails and tens of thousands of chats" through it customer service channels, the company said in the post.
CEO Mitch Lowe, a co-founder of Netflix, told Bloomberg he "totally underestimated demand."
MoviePass' service allows customers to see one movie a day at their local theater for just their $9.95 monthly subscription fee. When they go to a theater and choose a movie to see, the company loads their debit cards with enough money to buy a ticket.
The company's struggles to meet demand for its service come amid complaints from movie industry executives that its business model isn't sustainable.
At many theaters, the monthly fee MoviePass earns from customers isn't enough to cover the price of one ticket, much less one for each day of the month. The company has said it plans to make up the difference between the cost of buying tickets and the limited fees it earns by collecting and selling data on customers' movie-watching habits.
Prior to cutting its prices last month, MoviePass offered a range of different subscription tiers that allowed customers to watch anywhere from two movies a month to one every day. It previously charged $50 a month for that latter plan.
After the original price cut announcement, Fox Film CEO Stacy Snider said MoviePass sounded "like a wacky business model."
AMC, the world's largest theater operator also pushed back, stating it would work with attorneys to see about blocking MoviePass use at its theaters.