AMC Theatres Boasts 500K Members and Raises Rates in 16 Markets

We’ve got good news, and we’ve got bad news. First, the good news. AMC Theatres has had a great response to its movie membership

Subscription News: AMC Theatres Boasts 500K Members and Raises Rates in 16 Markets

Source: AMC Theatres

We’ve got good news, and we’ve got bad news. First, the good news. AMC Theatres has had a great response to its movie membership program. In its first four-and-a-half months, it has enrolled more than 500,000 new members in AMC Stubs A-List, exceeding the company’s first year goal. In addition, its AMC Stubs loyalty program now has more than 17 million subscribers, a huge jump from the 2.5 million mark two-and-a-half years ago.

Now the bad news. Starting January 9, 2019, AMC Theatres is raising rates for AMC Stubs A-List memberships by $2 to $21.95 a month in 10 states and Washington, D.C. The states that will see the price increase include Colorado, Delaware, Florida, Georgia, Illinois, Maryland, Minnesota, Pennsylvania, Virginia, Washington state and the District of Columbia. It will raise membership rates by $4 to $23.95 a month in California, Connecticut, Massachusetts, New Jersey and New York. The remaining 35 states will still be priced at $19.95 a month for 2019.

Members who have already signed up at the $19.95 rate will retain their rate guarantee for 12 months, as will any new members who sign up prior to January 9, 2019.

“With the surging popularity of A-List which is also propelling more and more people to book their tickets online, AMC is taking further steps to make the movie-going experience more convenient than ever before,” said AMC in a November 5 news release. “AMC is making modest pricing adjustments in states where the program is most popular.”

In addition to the rate increases, AMC is making other changes to the program:

  • Households can use one credit card as the payment method for separate, individual A-List accounts.
  • The minimum age for AMC Stubs A-List members has been lowered from 18 to 16 with a valid photo ID.
  • AMC will begin offering reserved seating in AMC-branded and AMC Dine-In theatres by June of next year.
  • By June 2019, members in Boston, Denver, Houston, Los Angeles, New York, San Diego and San Francisco can access mobile ordering to buy food and drinks online when they book their tickets. This option is already available at 52 AMC locations in 24 markets in the U.S.

Contrary to how MoviePass has handled its movie subscription service, AMC Theatres vows transparency and clarity to its members. They offer the following promise in the announcement:

“So that A-List members can always know what they can expect with reliability and predictability, AMC hereby warrants that for all guests who join on or after January 9, 2019, the Company will provide at least 90-days advance notice before making any changes to their A-List program’s pricing or benefits. Additionally, reflecting commitments already made, for those A-List members who have joined or will join before January 9, 2019, they are assured not only of 90-days advance notice of any future change in pricing or benefits, but also that no such change would apply to them until 12 months after their initial enrollment date. As a reputable operator, AMC has no desire to whipsaw its guests with frequent change, nor would it do so without providing guests reasonable advance notice.”

Adam Aron, AMC Theatres CEO and president, commented on the changes:

“In our minds, increasing enrollments to 17 million AMC Stubs member households over the past 2 1/2 years, or achieving initial enrollments of a half million members in AMC Stubs A-List in just 4 1/2 months, are astounding numbers. We have immensely successful programs here, and there should be no doubt, AMC Stubs and AMC Stubs A-List are here to stay with these programs’ structures and valuable benefits remaining fully intact. Our objective for these programs is that they continue to be both popular and profitable,” Aron said.

In the company’s third-quarter earnings report, released on November 8, Aron said that AMC Stubs members comprise more than 40 percent of AMC’s entire U.S. customer base. He estimated that the membership program, which is now above 500,000 members, will generate approximately $120 million in annual recurring revenue.

“…thanks to our intelligent stewardship and management of these programs, we find ourselves in the sweet spot of both offering great value to our guests and running a program that is heavily incremental and which should prove to be intriguingly profitable for AMC,” said Aron.

That may be the company’s sweet spot, but for the quarter ended September 30, 2018, the company reported a net loss of $100.4 million, compared to $42.7 million for the third quarter of 2017.

Subscription News: AMC Theatres Boasts 500K Members and Raises Rates in 16 Markets

Source: AMC Theatres

Insider Take:

AMC Theatres’ financials are not particularly impressive, but the membership program is proving to be a big success for the company. We think this is due, in part, to the utter failure of MoviePass, a rival movie subscription service that has changed benefits and pricing more times than we can count. AMC is getting the membership model right. While we don’t love the price increases, just six months after launch, we appreciate that AMC is sticking to its promise of a 12-month rate guarantee and the two-month advance notice. This could lead to a surge in sign-ups. We’ll be watching this program slowly to see if the company makes any more pricing or plan changes, but we sincerely hope they remain true to their word to be transparent to their customers.

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