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> I appreciate the fact that it did end up disrupting the market as it died. It might be too early to say that for sure. The AMC service was created when Movi

• blackflame7000 7y ago
  I'm not sure AMC would want to kill off this service. First, having subscribed customers is a much more reliable source of revenue than depending on the next big blockbuster so you can profit off the popcorn. Second, AMC doesn't lose nearly as much money per movie because they make money back on refreshments and there are almost always extra seats in the theaters. Furthermore, what's to stop AMC from saying a person who saw Avengers 3 times from really reporting that they only saw it once? I'm not sure how that whole process works but in theory, AMC could hide how many movies are actually seen in order to limit payment to studios for tickets purchased.
  • the_watcher 7y ago
    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.
    • ProAm 7y ago
      > 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
      • jannotti 7y ago
        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.
        • alexeichemenda 7y ago
          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.
          • kyshoc 7y ago
            For the Americans: AFAIK, "menu" is what we call a combo.
            • LeoPanthera 7y ago
              This has just explained a line in "The Fifth Element" for me.
          • rurp 7y ago
            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_watcher 7y ago
              The difference is that in this case it's $12 for a month subscription, not a year.
          • repsilat 7y ago
            > $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.
    • dreamcompiler 7y ago
      Bad analogy. Going to movies is actually fun and people don't make up excuses not to do it.
  • gwbas1c 7y ago
    AMC has the before and after data to know which model is more profitable. There's no point in speculating when AMC can just decide what's in its best interests based on the facts that it has.
    • blackflame7000 7y ago
      AMC could also try fine-tuning the price point to extract maximum value.
    • listenallyall 7y ago
      AMC stock has declined by about 1/3 since starting A-List, recently hitting an all-time low. The market would seem to disagree that AMC is making smart decisions. Sometimes a company and its CEO makes decisions in spite of the data, due to pride, momentum, false beliefs, inability to use the data correctly, dozens of other reasons. Further, the actual "after" data is pretty thin, given the program's limited history.
      • scarface74 7y ago
        The stock market is also rewarding Uber and it doesn’t have a clear road to profitability at all. The market is a horrible proxy for the soundness of a business plan.
        • listenallyall 7y ago
          For new, speculative, disrupters, perhaps. For old, mature, well-understood industries? Your statement is false. The market had every right to punish AMC (a real company BTW, not a "business plan"), which earned just $1 for every $54 in revenue in 2018, and which also nearly doubled revenue over 2015, with less than a 10% increase in net income to show for it.
          • scarface74 7y ago
            Yes you’re right the market is totally rational..
  • deleted 7y ago
    [deleted]
• gamblor956 7y ago
  Competing movie chains have also introduced monthly plans. MoviePass proved the demand. They simply lacked the data or leverage to make their business model work. AMC and Regal have both. Crucially, they can negotiate with the movie studios re the payouts for ticket purchases; MoviePass could not. This is probably the biggest and most important factor behind why AMC/Regal can make these plans work but MoviePass never could.
  • stordoff 7y ago
    It's also existed in the UK[1] (and France and other EU countries IIRC) since the 90s, which I suspect also proves the business model is viable (at least in some territories, and I don't see why in principle it couldn't transfer to the US). [1] https://www.cineworld.co.uk/static/en/uk/unlimited https://www.cineworld.co.uk/static/en/uk/unlimited (unlimited 2D movies for ~£20/month)
  • slg 7y ago
    >MoviePass proved the demand. MoviePass proved there is demand for free money. They didn't prove that this model could be profitable and therefore sustainable at this price.
    • gamblor956 7y ago
      AMC's been at it for a year and is still committed to it. Regal's corporate parent has been at it for decades and just expanded it to the US (via Regal), so I assume they have the data to make the numbers work. Also important to note is that both AMC and Regal subscriptions are twice as much or more per month as MoviePass was...closer to the original/sustainable MoviePass pricing (when it was a lot smaller and not very popular).
  • penagwin 7y ago
    > MoviePass proved the demand. Well yea, they lowered the price of the supply - OF COURSE there's more demand. But they lowered the price of the supply at cost to themselves. I believe the idea was that once they had enough market share they're be able to negotiate ticket prices and actually turn a profit. --- But yeah, there's a demand for unlimited movies @10$/mo when single movie tickets cost 12$+ :P
• bduerst 7y ago
  Movie theaters do not make money off of ticket sales, but concessions. I imagine that AMC worked out a subscription-sharing model with the studios, where the subscription fee is split across the movies attended. As long as people show up to movies, a percentage are buying concessions and AMC is making money.
  • scarface74 7y ago
    No, they negotiated that every movie seen is priced at $8.99 regardless of the format. Here is a complete write up of the financials. https://www.fool.com/investing/2018/07/10/theres-1-potential-danger-in-amcs-new-subscription.aspx https://www.fool.com/investing/2018/07/10/theres-1-potential...
    • listenallyall 7y ago
      Your own link says AMC chose that price point and asks whether studios will go along. There was no negotiation.
      • scarface74 7y ago
        Are you purposefully being pedantic? What word would you use when two parties make an agreement when either can say no?
  • rahimnathwani 7y ago
    "Movie theaters do not make money off of ticket sales, but concessions." Both ticket sales and concession sales have positive gross margins, and contribute to the bottom line. If you artificially separate a cinema business into two pieces, making the 'ticket sales' business responsible for 90% of the overheads (rent etc.), and the concessions part responsible for 10%, then it would appear that the 'ticket sales' business does not make money. But, in reality, the tickets sales revenue is required in order to run the business, not just to draw in customers for the 'concessions' business, but also to help pay for rent.
  • m463 7y ago
• hyperbovine 7y ago
  > Now that MoviePass is functionally dead, there is little stopping AMC from raising prices to the extent that basically kills this model for the average consumer. At which point, someone "rediscovers" MoviePass 2.0 (probably with some artificial twist to let everyone know that THIS IS NOT MOVIEPASS), an obliging VC materializes to huck a couple more unicorns on the fire, and it's deja vu all over again. I mean, nothing in this article suggested that the practice is going away any time soon...
• m463 7y ago
  It could be like the webvan/peapod era, which pulled in the big players, but then reality caught up.
• michaelbuckbee 7y ago
  There was a previous article going around about how Disney was forcing theaters to keep their movies up for longer theatrical runs. This coupled with the absolute dominance of Disney (aka Marvel, Star Wars, Pixar, Fox and of course Disney) means that the A-List all you can eat might be a smart move as they'll have trouble filling seats late in the run and can still make it up on concessions.
• metafizikal 7y ago
  For my local movie theater, AMC's subscription is $24/month. Doesn't seem bad if you see three movies per month (it says three per week with no blackouts). Considering that I see maybe 5-6 movies/year in the theater, it's not actually worth it at all.
• kbenson 7y ago
  My understanding, from asking my manager when I worked at a movie theater in high school well over twenty years ago, is that the vast majority of profits on movies that have recently come out are from concession (snack bar) sales. Something like 85-90% of the ticket price goes to the distributor in the first few weeks, and that percentage drops over time (until you have the rare movies that last much longer than others in the theater and are almost all profit for the theater by that point). The thing is, while I'm sure that calculation for how much is owed per ticket is not entirely simple, I'm not sure it's necessarily set as a specific dollar amount. I suspect it's a minimum but also a percentage of ticket price, so they can capitalize on theaters in more expensive locations (or that provide premium experiences). So, even if AMC assumes 3 movies are seen a month on average across those card holders, it might be that they can conceivably break even with the distributors at that price. If that's the case, it's a major net win as those people are not only likely to spend money at the concession stand, they are probably going to spend more, since they don't feel like it's already been an expensive endeavor to go to the movies (not only is it much cheaper, it's also time shifted away from the time you might want to get snacks for the movie, so you feel like you're there for free basically). In the end, there's a lot of interesting ways movie theaters might be able to leverage these memberships to their advantage. That said, I imagine the distributors will probably push for slightly different payment contracts if that becomes the norm.