Tuesday, November 21, 2017

What the Hell is Wrong With AMC Theaters?


I am really getting a headache trying to understand this.

As I have detailed previously (see: Praise Janet Yellen!: I Get to See All the Movies I Want in a Month for Just One Payment of $10.00), MoviePass is providing the opportunity for moviegoers to go to as many movies as they want for one flat monthly fee.

I described it this way:

 MoviePass doesn't have any special deals with theatres. It pays full price for every ticket you buy.

Let me go over this so it is clear. You pay $10.00 per month, and if you go to the movies once a week at a theatre at a cost of $60 for the month, MoviePass absorbs a $50.00 per month loss for your viewing pleasure.
(MoviePass has since changed its formula and lowered its price to $8.04 per month but you have to purchase a full year membership.)

But here is the thing. AMC Theatres is unhappy with this. Slash Film reports:
AMC Theatres adamantly came out against the subscription service as soon as it was announced. The theater chain issued a press release indicating that MoviePass was not welcome at their establishments, albeit without legally being able to stop any customers from using MoviePass at any of their locations. The chain said their legal team was “consulting with its attorneys to determine if or how AMC can prevent a subscription program offered by MoviePass from being used at AMC Theatres in the United States.”
Let's take this apart. Movie theatre attendance is down, along comes a very odd company that wants to pay for millions of tickets which will encourage more moviegoers---and it won't cost AMC one dollar in lost ticket revenue, lost popcorn revenue, lost soda revenue, whatever. It will just encourage more movie going. And it will increase revenue for AMC, probably by a lot (supply and demand).

And AMC is upset about this and wants to shut it down? Please hand me some aspirin.

MoviePass hopes to benefit from its generosity be selling access to its database of users. Should AMC be upset about this when MoviePass is paying full price for tickets? It is hard to see why.

It's not as if AMC couldn't figure out a hundred different ways to capture the name and email address of people who are inside their theatres for their own database.

It really boggles the mind that AMC would be against a rich crazy uncle who is going to encourage more movie going and pick up the tab! To the tune of millions of dollars!

  -RW

7 comments:

  1. I refer to such seeming economically irrational behavior as "being allergic to money."

    This sounds like a pretty egregious case of AMC being allergic to money. I wonder what other angle there might be here that maybe AMC can see but us casual observers can't.

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  2. They must believe that the subscription will drive down their prices. Say 90% of movie goers start using the subscription at $8 a month. Movie pass at some point could refuse to pay the full ticket price. If AMC refuses, customers (who've become accustomed to $8 month unlimited movies) will get the sticker shock of $15 single movies and probably refuse to go at that point.

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    1. I suspect you're right about the sticker shock effect. People will get used to the idea that going to the movies costs $8 (per month) and then when, for some reason, they "have" to pay the full price of a ticket, they will balk.
      After many months of not having been in a movie theater, we went to the movies this weekend (it happened to be AMC) to see Murder on the Orient Express (not bad, but you can wait until it's on netflix) and I was shocked when the guy asked for $28 for 2 tickets. It'll be a long time before I go again.

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  3. It sounds like AMC is falling prey to the common fallacy that a business has some property right in its customers.

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  4. AMC probably makes more money selling consumer data to hollywood than they do from tickets. If moviepass has that data, it undercuts their price for selling data to hollywood. Pretty straightforward. Moviepass business model makes perfect sense if they can drive enough revenue from selling data to cover the ticket costs.

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    1. Precisely. And think 3 years down the line when MoviePass "owns" 20% of their audience and can begin to make exhibitor demands.

      I understand both sides, but theaters likely will loose audience to competitors with whom MoviePass who can sweeten attendance with other competitors should they not want to play ball.

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