Movie theaters have worried about being phased out by home entertainment even before the VCR started dominating living rooms in the 1980s. While Hollywood has largely continued to thrive over the decades despite these fears, today the rise of streaming video presents movie theaters with their greatest challenge yet. The industry is especially afraid of losing touch with young moviegoers who are growing up with on-demand services like Netflix and Spotify. The cracks may already be showing: attendance of movie going Americans age 12 to 24 dropped 15 percent in the first nine months of last year.
In an effort to get people back to the box office, AMC Theaters is taking a page out of their competitors’ playbooks. In partnership with MoviePass, the nation’s second largest theater chain is offering a subscription service that allows customers to see up to one movie a day for a monthly fee. AMC is currently testing the concept in Boston and Denver, where the passes cost $45 and $35 respectively. The company will expand the service to more cities if it’s a success. Their partner firm MoviePass launched in 2011 using a similar idea but couldn’t find the support of the big chains. Now with AMC on their side, the two companies are hoping they can take advantage of today’s “all you can watch” mentality among consumers.
According to data from MoviePass, 75 percent of their subscribers range in age from 18 to 34 and tend to spend significantly more on concessions than regular ticketholders. The latter fact may have been especially appealing to AMC since movie theaters make most of their profits from purposefully overpriced items like popcorn and soda. The chain isn’t relying solely on subscription services to win back customers, though. AMC is also investing a ton of capital updating theaters with refurbished seats, expanded concession offerings and enhanced sound systems. By attempting to recreate the living room experience in the theater, the chain is hoping to keep its nearly 5,000 screens active well into the future.
Questions:
- Why did AMC Theatres agree to starts using MoviePass?
- Will updating theatres with enhanced seating and food offering help increase attendance?
Source: Brooks Barnes, “From AMC and MoviePass, a Film a Day for a Monthly Fee,” The New York Times, December 2014. Photo by: Janne Moren.