Here is a thumbnail of the AMC-MoviePass tussle. AMC is the nation’s largest movie chain, and has up to now been forced, more or less, to accept MoviePass tickets into their theaters. MoviePass recently changed their terms of service to potentially limit members from overusing their passes because the company could potentially lose money. AMC, for its part, has done its level best to avoid accepting MoviePass pickets and a number of AMC moviegoers have decided to take their business elsewhere.
MoviePass had to change their Terms of Service because, practically speaking, they have a questionable business model. Analysts wondered how the company could sustain itself over the long term, and the change in terms may be a yellow flag for the viability of the business. Meanwhile, members love the idea of a lower price movie ticket, and it is fair to say that many of the them will take full advantage of the opportunity.
As for AMC, they have a proven business model, so it makes sense to wonder what their objection is. Some AMC attendees say that the theater experience is lacking or downright awful. There will always be movie theaters that will not be up to par, so the complaints shouldn’t have that major of an impact for most AMC moviegoers. Even if AMC begrudgingly lets the MoviePass members in, that fact shouldn’t make much of a difference.
Movie theater owners, not just AMC, have to compete with the future of NetFlix, which is sinking a ton of money to get people to stay at home and watch instead of paying theater prices for movies they can watch by only going through a short delay on to see on NetFlix. There are people who prefer sitting in a movie theater, but those numbers are likely to continue to wane if NetFlix gains serious marketing share.
A second reason is that Hollywood is not turning out many blockbusters the way they used. Take Justice League as a recent example. People are not going to spend money going to a meh movie when they can wait for it to come out on a streaming service and view it at their convenience. Save for the IMAX experience, people can opt to stay home, especially in the winter months, rather than trek out for a mediocre movie.
Another thought is that because the MoviePass business model is not all that stable, AMC might risk losing customers or money should the MoviePass model fail. Members have every reason to love MoviePass, mainly because they can save a ton of money from the regular ticket price. What is great for the consumer is not always great for the business. Today’s customers only know what they want — the cheaper, the better — while businesses have to find ways to stay competitive — and in business.
The willingness of MoviePass members to abandon AMC in favor of a competitor says everything you need to know about this tenuous relationship between AMC, MoviePass, and the customer. The choice of moviegoers to abandon ship because they can save a few bucks can easily apply to their flavor of the month in movie theaters. It seems it is not a question of if, but when.
Silently lurking in the shadows is Netflix, who knows that the current mentality of people in general is the business that offers the cheapest price wins. Home theater technology will improve to the point where movie theaters will be as passé as mom and pop grocery stores.
AMC is making a mistake in their handling of MoviePass, and it will cost them in the long run. MoviePass has already made some adjustments to keep from going broke. Maybe AMC has their own adjustments to make with MoviePass not going anywhere anytime soon. But something has to give if AMC wants to remain the nation’s largest movie chain — at least for as long as movie theaters remain a choice for devoted movie goers.
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