AMC Starts Subscription Service, Challenging MoviePass
Posted June 20, 2018 2:49 p.m. EDT
After bitterly protesting MoviePass’ movie ticket subscription model, AMC has come up with a subscription plan of its own.
The global theater chain will offer a new plan starting June 26 called the AMC Stubs A-List that will allow subscribers to see three movies a week for a monthly fee of $19.95. That’s double the current price of MoviePass, and the movie allowance does not roll over from week to week. But unlike MoviePass, the model will let viewers see films in premium formats like Imax and Dolby Cinema, watch films multiple times, and go to multiple movies in the same day. And the deal will come with the benefits of AMC’s existing rewards program, which includes free refills on popcorn.
“Looking at the economics, it is so crucial that we designed a program that will allow us to be capturing a higher price than what others are charging,” Adam Aron, chief executive and president of AMC Theaters, said in a conference call to investors on Wednesday. “Because that makes possible success for AMC, while other discounters by contrast will continue to be hemorrhaging cash.”
The comment was a thinly veiled reference to MoviePass, which is experiencing both rapid growth and internal turmoil. The company reports that it now has more than 3 million paying subscribers and projects 5 million by the end of the year. And it is hiring additional technicians to improve customer service that has been the subject of many complaints.
But a Securities and Exchange Commission filing in April cited mounting losses, with auditors questioning the company’s ability to remain in business. And MoviePass’ parent company, Helios and Matheson Analytics Inc., is in the midst of trying to restructure its finances as its stock fluctuates wildly. On Wednesday, the company’s shares dropped 29 percent following AMC’s announcement.
MoviePass also raised eyebrows by investing in “Gotti,” a brutally reviewed John Travolta vehicle that achieved the rare zero percent fresh rating on Rotten Tomatoes.
AMC’s stock rose 1.8 percent following its announcement. On the conference call, Aron acknowledged that his company could take a $10 million to $15 million hit over the next six months from marketing and launch costs. But he estimated that the program would break even by 2019 and become profitable in 2020.
There has been bad blood between the two companies ever since MoviePass dramatically dropped its pricing in 2017. The companies’ representatives have traded pointed barbs in the press, and AMC temporarily blocked MoviePass access to big-city movie theaters earlier this year. On Wednesday, MoviePass responded to AMC’s move with some sass on Twitter:
“Heard AMC Theaters jumped on board the movie subscription train. Twice the price for 1/4 the theater network and 60 percent fewer movies. Thanks for making us look good AMC!”