Does it? Were those people going anyway? Would they go if they had to pay one cent more?
They’re just a middleman aren’t they? How are they driving anything or adding any value?
> that's a $20+ ticket that AMC can't sell to a paying customer
But the subscribers are paying customers aren’t they? Do you mean they can’t sell it to another paying customer? So you’re just saying they can’t sell things twice?
I have two friends who I'd describe as average theatre goers. Maybe a movie every 2 - 3 months. Since using MoviePass they both average about two movies a month during 2018. I am not sure how sustained that behavior will be, but at atleast in this early stage it is lasting.
As for the second point, he is arguing they never sell the ticket once. AMC does not get the money if the subscriber does not attend the film. So by fighting with MoviePass (as they have been), they never sell the ticket once.
If you give me free tickets to the cinema I might go. If you say now I’m in the habit can you charge me $1? No thanks not worth it now.
- AMC made a deal with the studios. All movies are accounted for as being purchased for $8.99. AMC then pays the studio 40-60% of that price.
- Thd turnover of AMC movies isn’t that great. I doubt they have more than 8 new movies in a month - even fewer that a person wants to see
- Concessions are a high profit margin product. The average movie goer was already paying around $5.00 in concessions. They will probably pay more now since the movie was “free”.
- the subscription plan is not available for anyone under 18. If you take your kids they pay full price for the movie and concessions.
I can’t find the article now where I saw this. But the $8.9@ per movie price was widely reported.
https://www.bizjournals.com/losangeles/news/2018/06/25/amc-s... https://www.wsj.com/articles/hollywood-studios-fear-amcs-new...
The studios are not going to sit back and accept just $5 per admission to Black Panther on 3-D IMAX on Saturday night of opening weekend, when that ticket retails for $18-25 (depending on location). Studios usually collect 80-90% of ticket revenue for big movies on opening weekend.
https://deadline.com/2018/06/imax-approves-amc-theaters-new-... By “wouldn’t affect the overall economics”, I assume they meant that AMC promised them that the offset in revenue would be made up by the number of people seeing IMAX or they would make up the difference. Not they are paying full cost.
AMC completely flips the script. Its members can see IMAX films without any premium cost, even on opening weekend. Regular screen, or 3D IMAX for the same cost (both for free)? Of course, let's go see IMAX.
The problem for AMC is that it is now on the hook for paying the IMAX premium. Your article says, vaguely: "the theater chain will ensure there is no reduction in Imax’s overall economics." So it's a no-lose proposition for IMAX but AMC now has to cover the cost of tickets sold to A-Listers.
Here is a link to Regal theaters showing Mission Impossible tonight: https://www.regmovies.com/movies/mission-impossible-fallout/... Notice how nearly every showing says "No Passes"? That's because giving away a free seat to a sold-out show reduces ticket revenue. That's been basic policy at movie theaters for decades. AMC has decided to toss that model out the window.
Nash equilibrium here is Moviepass dying off regardless of communication/collaboration. Introducing a competing service will only speed that up.
Instead, theaters, especially AMC, refused to negotiate and in doing so, shot themselves in the foot. AMC's subscription plan is especially attractive to high-volume users on which it will likely lose money, further, it encourages them to use their free tickets at peak times for the most popular movies in the most expensive formats. When an AMC subscriber in NYC reserves a seat for a Marvel film in IMAX on opening weekend, that's a $20+ ticket that AMC can't sell to a paying customer because the theater is sold out. AMC's profit margin is already quite thin, and getting worse, according to its financial filings. Its CEO is very full of himself but doesn't seem like much of a strategist.