AMC Theaters Girds Its Loins

Well, it finally happened: A major movie theater chain, in this case AMC Theaters, has introduced its own subscription-like movie ticket service seeking to compete against MoviePass.

[extreme John McClane voice] Welcome to the party, pal!

As I pointed out a couple months ago, this is the kind of innovation entrenched industry players rail against, which AMC has done loudly and often, because it’s something they should have thought of if they weren’t busy enjoying their protected status. Here are the details of how AMC Stubs A-List will work compared to MoviePass:

	AMC Stubs A-List	MoviePass
Monthly Cost	$20	$10
Movies Allowed	Up to 3/week	Unlimited
IMAX/3D Showings	Yes	No
Multiple Movies/Day	Yes	No
Same Movie	Yes	No

On paper that looks like a slightly better deal. If you see two IMAX showings a month, the AMC plan has already paid for itself, and because it’s part of the chain’s Stubs loyalty program you continue to rack up points you can redeem later.

Yes, this validates the theatrical subscription model. But it’s a losing model. MoviePass’ parent company has seen massive stock price drops over the last few months as it hemorrhages cash. That’s part of the reason it introduced, at the same time AMC announced its offering, surge pricing, which would add a premium fee for in-demand movies just like Uber costs more during rush hour. The financials are so bad it’s setting up a bond sale to raise funds and stay afloat.

So why mimic it?

AMC is clearly hoping premium formats, repeated viewings and widespread frustration with MoviePass’ horrific customer service and constant program changes will attract people. It’s also likely hoping audiences don’t use it enough to actually recoup that $20, which is the only way it will remain profitable. Indeed, in that article AMC’s CEO says profitability will depend on low usage, the same thinking Netflix used in the days of mailed DVDs.

Still, the challenges are obvious.

First, previous reports have shown MoviePass users not only saw more movies per month than they otherwise would have but saw a wider array of movies. Both are because there was no incremental cost and so the potential risk of wasting money on a movie that was only alright was low. It will be interesting to see if that remains true when repeated viewings of blockbuster franchise are available as a choice or if people still opt for breadth.

Second, that price point is pretty high. I understand that it comes with a lot of perks, but $20/month is well above what people are paying for Netflix, Amazon Prime or any other subscription service at the moment. Studies have shown most people don’t want to pay more than $20 for streaming subscriptions and average three subscriptions already. They may not see the value here as worth it on an ongoing basis, content to either pay single-ticket prices for occasional theater outings or just skip it altogether.

Third, it’s launching at a time when the studios and media companies AMC and other chains depend on are increasingly going their own way, or making plans to do so. The potential value of that Stubs A-List price will be a lot different when Disney starts withholding theatrical releases in favor of its own streaming service.

Fourth, because it’s only good at AMC theaters locations it may simply not be applicable to vast swaths of people for whom an AMC location isn’t convenient. You can make the case that people might be willing to drive a little farther to take advantage of the price point, but that overlooks trends across consumer product categories, including movies, that “not having to go out” is the increasingly dominant deciding factor in making a purchase.

Finally, it’s yet another move to gentrify the moviegoing experience. Low-income households may be able to splurge on the occasional very expensive movie ticket to see something like Black Panther, but they may not be able to take on an additional $20 monthly expense. That may not sound like much, but it really is, especially if your circumstances mean that simply finding the time to take your kids to a movie is impossible because of your inconsistent work schedule.

It’s good to see innovation in the theatrical exhibition game. What AMC is doing, though, does little to address or account for some underlying and overarching issues with the industry and how it’s simply poorly positioned to survive in a media and retail model that’s vastly different from what it was 30 years ago. AMC continues to believe IMAX and 3D are the answers to every question and that the studios will always want theaters to be around. Neither of those are assumptions that should be made.

Chris Thilk is a freelance writer and content strategist who lives in the Chicago suburbs.