This is Part 1 of a two-part article. You can find Part 2 at this link.
MoviePass CEO Mitch Lowe sounds surprisingly chipper for a man who’s been under extreme duress for the past month.
When I spoke with Lowe the other day he confessed to being exhausted because he and his employees have been working around the clock for weeks to catch up with overwhelming — and entirely unexpected — demand for their service.
MoviePass announced in mid-August that it was reducing the fee for its subscription service, which pays for up to a movie ticket per day, to just $9.95 per month. Lowe told me he had hoped the promotion would quickly double the company’s membership base to 40,000. That turned out to be a modest hope.
“We underestimated the response,” says Lowe. “My wildest dream was that we’d reach 150,000 subscribers in 15 months; we hit 150,000 in two days. We had 1.3 million unique visitors to our website in four hours and it crashed our servers. And even though we turned off all our marketing and social media, we’ve continued to acquire more new subscribers than we’ve been able to keep up with.”
The subscriber base zoomed past 400,000 by last week, and it’s still growing fast.
The enthusiastic response has been both a blessing and a curse. “I was happy because it shows how passionate people really are about the service we offer,” he says. “But we weren’t ready to fulfill the demand. Our staff was just nine people, half of them customer service reps, and we got caught unprepared.”
The company fell short in mailing subscribers their membership cards, which had been promised within five to seven days of purchase. MoviePass advised purchasers on September 7 that it would be an additional two to three weeks before many would receive the cards.
Because the membership card is required (in conjunction with the company’s smartphone app) for subscribers to use the service, tens of thousands were left having paid for MoviePass but without the means to use it. That led to confusion and angry responses from many, which were only exacerbated by the tiny customer service staff’s inability to handle the flood of incoming questions and complaints.
As one paying customer who I'll call "Alicia C." put it, “Customer service never responds. No way to speak to a live person. So far not happy.”
Others have complained about the long delays in receiving their cards, like "KK," who sent me a screenshot of his cancellation message to MoviePass, which read "22 days and still no card??? F**king bullshit."
Lowe told me that the cards are essentially MasterCard debit cards that have “all kinds of special security features built in, so there are only a couple of facilities that can handle the manufacturing.”
But he's confident that his staff's hard work will soon put them back on track.
"It's taken us three weeks to get the people and resources in place, but we're catching up to demand," he says. "We had to train a whole new team of people (several dozen staff have been added) which will quadruple capacity, and we're now two weeks away from getting caught up in fulfilling the card orders."
So yes, Lowe is tired, but he's mostly happy and looking forward to a robust future for the company, despite all the doubters. As a former video store chain entrepreneur and founding executive of another web-based movie delivery you may have heard of called Netflix, he has the track record and the hard-earned experience to make MoviePass a success.
"When we started Netflix people told us we were crazy," he notes. "It's never easy getting something this different off the ground. Our lack in fulfilling demand has kept me up at night."
But in the next breath, he tells me about his plans for when MoviePass reaches 10 million subscribers. "I want to make this understandable and valuable to the entire movie ecosystem."
In Part 2 of this article I discuss how Lowe plans to make money, and lots of it, by paying for as many movie tickets as his subscribers want for $9.95 a month.
Read More: CEO Mitch Lowe Pulls Back The Curtain On MoviePass And Explains Its Economics
