Eleven months after launching its AMC Stubs A-List movie subscription service, AMC Theatres reports that it has attracted more than 800,000 subscribers, far exceeding its goal of 500,000 subscribers by June 26. AMC Theatres launched its movie subscription service, expanding its loyalty program, as MoviePass and Sinemia were experiencing difficulties with their own subscription programs. AMC Theatres says this success has made AMC Stubs A-List the number 1 movie-going subscription service in North America.

With AMC Stubs A-List, we believe weve cracked the code to make this concept successful for AMC, our shareholders, our studio partners and most importantly, our guests. While others have tried and failed in this space, A-List is only getting stronger. Members are seeing many more movies than they did before A-List was created, they are seeing movies more than once and theyre bringing their friends and family members along, who are paying for their tickets at full price, said Adam Aron, AMC CEO and president, in a news release.

Our A-List program is already contributing to AMCs profitability. A-List members are bringing friends and family with them to the movies and they are adding to their enjoyment of the show by buying plenty of popcorn and soda and other food and beverages in our theatres, Aron added.

AMC Theatres success can partly be attributed to the failures of other movie subscription services. Sinemia has filed for bankruptcy and ceased operations in the U.S., and MoviePass isnt doing so well either. It has reportedly fewer than 250,000 subscribers in less than a year, according to Variety, and in February, parent company Helios and Matheson Analytics was delisted from NASDAQ. Its stock had been trading below $1 per share since July 2018.

Neither Sinemia nor MoviePass could seem to get the movie subscription model to work, often changing pricing and offerings without being upfront with subscribers. AMC Theatres, on the hand, has been very open with its members, even when increasing its prices. In fact, it vowed transparency and clarity to them. In November 2018, AMC announced it was raising its rates $2 a month in 11 markets and $4 a month in five others. That has not stopped members from subscribing.

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.

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 programs 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, added AMC.

During 2018, AMC saw a dramatic reversal of fortunes, going from a net loss of $487.2 million in 2017 to net earnings of $110.1 million in 2018. Some of that can be attributed to the success of its subscription program. The first quarter of 2019 ended March 31, 2019 wasnt as pretty with revenue of $1.2 billion and a net loss of $130.2 million. In a news release, AMC Theatres attributed this loss in part because Black Panther was released in the first quarter of 2018. That movie made the first quarter of 2018 the second highest grossing first quarter in AMC history. Thats hard to beat.

Regardless, Aron is very optimistic that the year will be a good one for the theatre chain

Even with the anticipated slow start to the year, we have been and continue to be quite bullish about the full year prospects for AMC, currently expecting 2019 Adjusted EBITDA to exceed 2018 results, adjusted for ASC 842. While we have high expectations for 2019, due to an extraordinary slate of movies coming, the timing of releases within the film slate suggests that it will be a back-end loaded year, Aron said. Looking ahead, we remain enthusiastic about our progress against our strategy and medium to long-term financial targets as outlined during our recent Investor Day.

Insider Take:

AMC Theatres success with its movie subscription service can be attributed to a variety of factors:

• Competitors offered an ever-changing and disappointing user experience.
• AMC Theatres had a large base of potential members from its loyalty program to market to.
• The company was transparent. They priced their product appropriately and offered attractive benefits to provide value to members without giving away the store.
• When they needed to adjust pricing, they notified members well in advance and explained why they were making the change. This shows they value their members enough to be up front with them – they learned from the mistakes of their competitors.
• AMC Theatres took every opportunity to share the success of the program as they hit milestones along the way. This additional publicity kept them in the public eye and in front of investors.
• They followed subscription best practices for transparency, pricing, testing and user experience.

There results over the last year are impressive. We cant wait to hear the companys report as of the one-year mark – June 26. Stay tuned!