MoviePass relaunch crashes servers as CEO plots comeback amid 'overwhelming demand'
MoviePass is officially set to relaunch and contrary to some online commentary, co-founder and CEO Stacy Spikes says the timing couldn't be better.
"Now is a more exciting time where you want to get in the water," Spikes told Yahoo Finance Live in a new interview, saying he'd rather relaunch now than prior to the pandemic.
The executive cited positive summer momentum, referencing the record-breaking success of films like "Top Gun: Maverick," "Minions," and "Thor: Love and Thunder."
"Maverick" in particular has been a beacon of hope for exhibitors. The Tom Cruise-led sequel has amassed more than $1.4 billion in worldwide ticket sales, topping "Titanic" to become Paramount's highest-grossing domestic film of all time.
MoviePass, which skyrocketed to popularity in 2017, fell into bankruptcy just two years later.
Spikes regained ownership after buying it back from parent company Helios and Matheson Analytics in November of last year.
The service will begin to launch in select markets over Labor Day Weekend, but a waitlist for the app's beta version, which opened on Thursday, saw "overwhelming demand" — so much so that it caused the site servers to crash, the company said in a tweet.
Spikes revealed 30,000 people signed up in the first five minutes prior to the server crashing for two-and-a-half hours. It is now back up and running.
"We're really happy with people's excitement about MoviePass coming back. That shows the retention that the brand has and consumer excitement," Spikes said.
The new MoviePass model
Unlike the company's previous model — which failed to sustain a monthly, unlimited plan of just $10 a month — the resurrected version will allow users to select monthly prices between $10, $20, or $30.
Each tier will offer a set amount of credits that users can then "cash in" to see movies. There will be no unlimited viewing option.
"What we've done is set up a marketplace that allows the studios and the theaters to do peak and off-peak pricing," Spikes said, explaining that more popular movies shown at more popular times will cost more credits, allowing greater flexibility for theater operators.
"The previous MoviePass was one thing for the consumer, and one thing for the theaters," Spikes said. "Now, there's the variable pricing that will be able to happen between the two of them."
Theater chains have experimented with variable pricing in the past. In March, AMC (AMC) made waves when it raised ticket prices for "The Batman."
Although novel to the U.S., AMC's experiment wasn't necessarily new, as the theater chain had already been implementing price variations across Europe; however, it did prove to be a success with consumers still frequenting AMC locations despite increased ticket prices.
Still, theater chains have struggled to climb back from pandemic lows with the domestic box office down about 31% compared to 2019, according to Box Office Mojo.
Additionally, most major theatrical chains like AMC, Cinemark, and Regal Cinemas remain unprofitable — despite soaring revenues in the second-quarter. Britain's Cineworld Group (CINE.L), the parent company of Regal, is reportedly preparing to file for bankruptcy as a result
Despite these secular concerns for the business, Spikes remains steadfast in his belief in theaters.
"Sometimes when the market is tougher, that's when people become more open to new revolutionary ideas," Spikes said.
Alexandra is a Senior Entertainment and Food Reporter at Yahoo Finance. Follow her on Twitter @alliecanal8193 and email her at alexandra.canal@yahoofinance.com
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