AMC's MoviePass Killer Does Seem to Be Helping Kill MoviePass
(Bloomberg) -- When the AMC movie chain unveiled a subscription service last June, it was seen as a defensive move.
MoviePass Inc. had upended the movie-theater industry by letting subscribers see a film every day for $9.95 a month. That service quickly attracted more than 3 million customers, and the traditional chains felt like they needed to respond.
But there were doubts about AMC’s alternative. Its price tag was $19.95 a month -- twice as much -- and customers could only see three movies a week. Subscribers also were limited to watching films at AMC’s theaters.
Now, eight months later, it’s hard to see AMC’s subscription service as anything but a winner. The program, called Stubs A-List, attracted nearly twice as many customers as anticipated by the end of last year. A surge in attendance helped fuel food and beverage sales last quarter, sending the stock on its biggest rally since AMC Entertainment Holdings Inc.’s initial public offering in 2013.
The A-List plan has added more than 700,000 subscribers and could reach 1 million this year. And that’s despite AMC hiking the price to $21.95 in many areas.
“Prior to joining A-List, A-List members on average were seeing only about a half a dozen or so movies per year,” AMC Chief Executive Officer Adam Aron said on a conference call. “They are now coming to our theaters with much greater frequency, and they’re bringing friends with them at full price and buying high-margin food and drink.”
MoviePass, meanwhile, is languishing. The money-losing service was retooled a number of times, prompting users to cancel subscriptions. And its parent company, Helios & Matheson Analytics, was delisted from the Nasdaq last month.
MoviePass is reportedly considering bringing back its unlimited plan -- letting customers see a movie every day -- but it still lacks the clout of a chain like AMC. Movie-theater companies can offer discounts on concessions and free ticket upgrades to premium-screen formats, said Amine Bensaid, an analyst at Bloomberg Intelligence.
“It’s unlikely that most users lost would come back, as theater plans offer perks that MoviePass doesn’t have,” he said.
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