Also, like gym memberships, the utilization is almost certainly nowhere near 100%. I bet they make far more money from people who have the pass but average <1 movie per month than they lose from people who maximize the "free" movies.
> the utilization is almost certainly nowhere near 100%
I read a study a few years back and the average American adult sees 1-2 movies per year in a theater. I dont have the info anymore but I agree wholeheartedly
But AMC will be dealing with adverse selection. People who only see a couple movies a year will not subscribe. Only those who spend more (plus a few who miscalculate) will be subscribing.
>People who only see a couple movies a year will not subscribe.
This is what a lot of people leave out when discussing the gym membership analogy. There is a societal and personal pressure to be in shape and have a gym membership. Many people also don't enjoy the actual process of working out. Therefore people feel guilted into purchasing the service but disincentivized from actually using it.
There is no societal pressure to go to the movies regularly (maybe there is a little pressure to see a handful of blockbusters a year, but not enough to justify the service) and people generally enjoy the experience. So the only incentive to purchase the service is to save money and people have a positive incentive to use the service. That is totally different than the gym membership model.
I'm also reminded of the high-pressure, guilt-ridden sales tactics I had to endure when I had to set an appointment just to cancel my recurring 24-Hour Fitness membership in person.
"So, why did you stop taking your health seriously?"
When I stopped teaching fitness classes part time and move to the other side of town (ie metro Atlanta - an hour drive) where the gym wasn’t the meeting spot for my social circle, I started really not like going to the gym and having to squeeze it in with everything else.
I’ve had a treadmill in my house/apartment for years -that I actually used - when we moved I made sure that we had a spare bedroom that I could turn into a gym.
I love working out at home, in front of my TV or listening to a podcast. I can work out anytime, I’m still at home with my family and my wife will work out with me occasionally. She still likes going to the gym and working out with her friends.
We use it as a commitment device. Too often “life happens” and we don’t have date nights or we may just feel like staying at home. But since we pay a combine $46 a month (including tax), we think we might as well go to a movie. We will usually go out to eat and have drinks while we are out.
Not sure that's a bad thing. It probably hinges on the unit economics of their ticket obligation to the studios.
For example, if subscribing induces people who like going to the movies enough to do it at least monthly to go more often--maybe 2 or 5 or 10 or 20 times a month--the main liabilities seem like: subscribers displacing people who buy full-price tickets, turning frequent full-price purchasers into subscribers, and hard-core min/maxers who refuse to buy anything else at the theater.
I'm not sure how the plans work, but the first is probably mostly-fixed by things like not letting pass members reserve seats, and no-pass stipulations for new releases, etc.
There's not much you can do about the third, but I'd guess most people are more likely to get a snack or drink if they aren't explicitly paying for the movie, and even more so if they know they're watching 8 movies a month for $13.
If the profit on those exceeds the studio's cut of ticket sales, and if the majority of subscribers are attending more, they might come out better the higher the average number of subscriber-monthly attendance goes?
Yes, but AMC and Regal can (and did) negotiate ticket revenue shares with the studios. They also have additional revenue streams like advertising, private events, and especially concessions that are independent of or benefit from increased subscription attendance.
Consider that for a regular movie ticket, the movie probably made more from the concessions (which cost the theater pennies and can get marked up by up to 100x) than they do from the ticket.
AMC did not negotiate with the studios, regarding A-List subscription reimbursement. AMC decided on its own to base reimbursements on an average 8.99. Studios haven't fought back or pulled films yet, but there is no guarantee they won't.
You keep taking things way too literally. There is no way that AMC “decided” to give the studios less than they were contractually obligated to and none of the studios sued. That’s not how business works.
Agreed. Disney is notorious for using its leverage to extract high % gross from theaters big and small, owing to its relatively unbroken streak of successful movies the past few years. There's no way they would have agreed to this without some sort of back-end make-good, especially when Disney's Marvel films draw a higher percent of high-value ticket sales (3D/IMAX/PLF, etc.) that are easily 2-3x the price that AMC says it will pay studios for each Stubs viewing.
Disney is, in fact, in a bit of a bind. The Force Awakens has sold over 100M tickets. Endgame about 95M. (source: ultimatemovierankings.com) AMC represents about half of the total, perhaps a bit less. AList has fewer than 1 million subscribers. Therefore, even though it knows AMC is likely to lowball its reimbursements on the AListers, it is not in Disney's best interest to refuse to release its next blockbuster at AMC theaters, and risk losing even a small percentage of the many, many millions of normal, traditional ticket sales.
It doesn’t matter where the power dynamic lies. No corporation would be crazy enough to unilaterally pay another corporation with deep pockets less than they had agreed on. Do you really think that Disney gives AMC a distribution license without an iron clad agreement with lots of lawyers involved?
Please define "contractually obligated" when no contract exists yet to cover the scenario of patron admissions granted via all-you-can-view subscriptions.
So I signed up for Cinemark with 2 email ids. I get 2 tickets per month and 4 people in the household so need to do only a movie every 2 months. I know Cinemark allows me to close my account AND keep the earned tickets, but I did not want to do that ... dont experiment with such things.
As a result, I am trying to consume all the tickets in one account, still not there, and sitting holding double digit tickets in my other account. Oh I will get out of this ... on to my last ticket in account #1, just need to find one more movie to watch, but this is not how I expected life will work when I signed up.
Many people like me in this world.
[ Thanks Disney/Marvel for the burn rate this year]
Debatable. If you go to the movie and the cashier says "it's $11 for the movie, or $12/mo for unlimited movies", i wouldn't be surprised if many people take that deal. That's how restaurants get you with menus & other bundles.
> $11 for the movie, or $12/mo for unlimited movies
I can't decide whether this would be more or less likely to convert (and also, whether it would be more or less profitable) than "$11 for the movie, or $10/mo for unlimited movies."
Obviously you'd think "more likely to convert" because it's cheaper, but maybe actually less likely because the fact that it's cheaper than a movie would give you pause, and make you think "Oh, it's a subscription," and then realise it's $120/year -- probably more than you spend on going to the movies.
It’s 21.95 a month. They also tempt you buy advertising that you can go to customer service after you leave the movie and apply your ticket price to the first month’s subscription price.
We only have to go to three regular movies a month to save money or one IMAX movie and one regular movie a month.
I've encountered the same thing at a theme park. It was something like $70 for a day pass and $75 for a year pass. It was such a tiny difference we sprung for the year pass, even though it was unlikely that we would go back any time soon.
The number of wide release movies shown during a given year is barely enough to make AMC lose money - especially after you consider concession sells. I have an AMC subscription and we might see 5 or 6 movies in a good month. Most of the time it’s 3.
Honestly, I could see "sure I'll subscribe for $20/mo, I would like to see more movies", then never going, and thinking you'll use it next month so why cancel now.
