In what could be the latest instance of too little too late in technology, media and entertainment, AMC Theaters is teaming with MoviePass, to trial a subscription option in a few markets next year that lets consumers watch a movie a day for between $35 and $45 a month.
MoviePass requires an annual commitment and carries termination fees for those who cancel after just a few months. That should be changed as consumers don’t seem to be thrilled by term commitments and early termination charges.
This is but the latest move theater owners have made to stay revenue relevant over the decades in the ever-changing video consumption economy. Recent moves have included dine/drink and view, 3D, 4K ultra HD, renting theaters for company meetings and events, running more ads than previews and beaming in higher-ticket concerts, theater and comedy shows to the facilities.
History or History?
As a career movie viewer, I’ve seen drive-ins go from thousands to an estimated 400 in the U.S., ticket prices (and concessions) skyrocket, cable movie channels like HBO and friends cut into racing to the theater, the rise and fall of Blockbuster ( and the mom and pop DVD renters it killed), movie DVDs, Redbox, Netflix and much more.
AMC testing new business models – subscription – is a solid idea. And as a cinema fan, I hope it proves effective as a means to keep the super monster-movieplexes alive. But subscription models for movies and TV are hardly new and can cost less than what AMC and MoviePass are pricing. Rhapsody and Spotify use them as well. And AMC is partnering with the subscription service provider – MoviePass – that has been around since 2011 and largely shunned by exhibitors.
Running the Numbers
Cinemas, for the most part, have been evolving, but not so much on the technology front. That’s very worrisome. 3D is fun but not worth paying extra for (still), 4K UHD movies like Interstellar should help but these chains are priced higher than tech-driven alternatives to getting the content to the home. Plus, there just don’t seem to be many/any must-see-ASAP films to warrant frequent visit to the cinema.
For roughly the same money as the AMC MoviePass, a couple can go to the cinema (tickets only) once a month, subscribe to Netflix and still rent a handful of fairly new movie DVDs from Redbox. With the list of streaming OTT services out and planned for prices comparable to Netflix, why leave the home more frequently, deal with parking, ticket availability and sky-high concession prices to see movies that are hardly award-worthy?
Now do the math. At the lowest price point mentioned, $30, that’s $360 a year, (no frills or concessions) for one person. I know, that could pay for 365 in-theater movies a year for one person (30 a month), but that seems excessive.
And then you have consumers whom have been turned off in part or completely by high ticket prices, roughly $9 each for and adult ticket (higher if you have to don the glasses and watch the flick in 3D or stop for anything inside to eat and drink). Winning them back now is a truly tall task. The lower-cost alternatives are overwhelming and have been available for years.
“Movie” Channels Going Direct
Thanks to technology (streaming), combined with a need to expand revenue, HBO is going direct (minus the cable distributor) to the consumer next year with its own branded web service next year. Many of its premium cable channels (now better known for original series than movies) likely to follow suit.
Think of the three Cs of movie entertainment: convenience, cost and choice. Going to the movies can be a fun event, especially for those that have to see a new movie when it’s newest. But the cinema loses in all three categories. Limited showing times often make going to the cinema a non-option in the evening. (See convenience).
Culture has also played a big role in the evolution of movie theaters. There was a time when groups of kids, teenagers and adults went to the movies on a regular basis – and could afford it. They walked or rode bikes, and then they went to drive-ins when they got access to cars. It was a staple of dating for many and going with your parents wasn’t always a means to see an age-rated movie. Drive-ins were preferably in good weather. How often does any of this happen now?
Keeping Pace with Change
And then there’s technology. Cinemas began when there was very little and are struggling to stay relevant decades later, having tried so many different approaches as at-home alternatives have risen in popularity with consumers. Blockbuster died largely because of the brick and mortar approach though it tried a streaming offering well after Netflix in an 11th hour gasp.
Cinemas have been consolidated into monsterplexes whose owners have consolidated into just several big chains. I like watching movies anywhere from the drive-in to the cinema to online at home. I’m rooting for AMC, but to answer the question posed in the headline, I have to answer “both.”
Stay tuned. The situation, unlike too many movies, is very much worth watching.
Founder, Fast Forward Thinking LLC
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