Elijah Wood is not a fan.
The “Lord of the Rings” star landed on the cinema chain shortly after AMC Theaters announced it would charge moviegoers more for a better view of the screen. “The movie theater is and always has been a sacred democratic space for all,” Wood wrote on Twitter. Will.”
But whether movie theaters have historically lived up to such lofty ideals or not, the fact remains that in recent years, the hard-hit exhibition industry has experimented with different types of ticket prices to revive sales. is doing And no company in the sector has been more aggressive with trying new strategies to rebuild its balance sheet in the wake of COVID than AMC.
In 2022, for example, AMC charged $1 to $2 more for comic book fans who want to snag a ticket to “The Batman” opening weekend. And last weekend, encouraged by Paramount, AMC offered discounted matinee prices for every screening of “80 for Brady,” a comedy starring Lily Tomlin, Jane Fonda, Rita Moreno and Sally. Field included. For good measure, AMC is also selling its popcorn in malls, partnered with Zoom to facilitate business conference calls at local multiplexes, and has a stake in a gold and silver mining company in Nevada. has bought
Now, AMC is launching one of its boldest bets yet: Sightline at AMC, an initiative to price tickets based on seat location inside the auditorium. It will debut at select locations in New York, Chicago and Kansas City before expanding to all domestic AMC theaters by the end of the year. The three options include the traditionally priced Standard Siteline (for the “most common” seats in the auditorium), the less expensive Value Siteline (front row seats) and the pricier Preferred Siteline (seats in the middle of the auditorium). will
“It’s an example of an antiquated industry trying to catch up to everything slowly,” said Eric Wold, an analyst at B. Riley Securities Inc. Most people took the negative view that this is an example of a company. Trying to catch people. But people are used to paying more for better seats at sporting events and concerts.
In fact, almost every other form of popular entertainment, from Broadway to baseball, offers a range of prices depending on proximity to the action. But this particular approach to pricing has not been widely discussed in the film business. In the past, some members of the exhibition industry pushed to charge more depending on the type of film being released rather than the set. In this scenario, a cinema will charge a surcharge on high-profile franchise films, such as the latest Marvel sequel or spin-off, and give people a break on indie releases or adult dramas. But that model could be more dangerous, say analysts like Wold.
“You don’t want it to sound like a movie is being discounted because it smells bad,” Wold says.
It’s also not very popular with the studios themselves, who don’t always want to admit that their films should be discounted. Because of antitrust laws, studios are not able to determine the fees they charge for theater tickets, but they can change the terms when it comes to the percentage of box office revenue they receive from their films. will be obtained.
Privately, some studio insiders praise AMC for trying to shake up the business against an infamous change, even if it’s too early to tell how audiences will react to the change. Will this move continue? Others fear the move could further discourage some already reluctant patrons from returning to theaters. The box office has started to bounce back from the pandemic, bringing in $7.5 billion in 2022, but that return is 33% lower than it was before the pandemic. Older audiences have been especially wary of returning to the big screen at a time when the virus has eased, but not completely disappeared.
There may be some logistical challenges. It’s unclear how AMC will implement the new prices, especially at screenings where there are empty seats.
“People are always trying to game the system,” says Roth MKM analyst Eric Handler. “What’s to stop people from jumping or buying seats for a few bucks less and then moving to better seats that aren’t filled after the movie starts?”
So will this be a game changer? Will customers embrace a model that allows them to pay a few dollars more for an unobstructed view of the screen for the middle seat? And will this new world order be catnip for price-conscious moviegoers willing to stick their necks in the front row to save a few bucks? Or will the audience reject the plan and fail to show up, forcing the experience to roll the end credits in record time? The answer may lie somewhere in the middle.
“It could have an incremental impact on earnings,” says Barrington Research analyst James Goss. “It can widen the audience around the edges.”
Moviegoers may not be used to paying extra to snag a good seat, but they’ve become accustomed to extra fees for 3D or Imax screens. Even outside ticketing services like Fandango add convenience charges to buy online. However, some analysts believe the situation is different with Sightline.
“People are used to paying more for a premium experience,” says Handler. “I’m not sure that means they’re willing to pay more to sit in a particular row.”
At a time when AMC is still struggling to fill seats, the potential to make more money could be enough to justify the seating bet. In addition, the exhibitor hopes the move will draw attention to its AMC Stubs A-List loyalty program — which runs between $19.95 and $24.95 per month — as members pay upcharges for a favorite Sightline seat. will not be required.
Because of its market share (AMC is the world’s largest chain), large and small circuits, such as Cinemark or Alamo Drafthouse, could be forced to follow suit. Regal, once the second-largest chain, is trying to emerge from bankruptcy protection, a sign of how dangerous the recovery has been for the movie theater industry.
Whether or not the tiered pricing model becomes the industry norm, there’s a reason Sightline at AMC is particularly attractive to company CEO Adam Aron, who previously oversaw Norwegian Cruise Lines and co-owned the Philadelphia 76ers. Used to run. Both of those businesses charge their customers more for better suites or seats.
“Almost every industry that Adam Aaron has worked in has variable costs,” Goss says. “It’s new to the movie business, but it’s not new to Adam Aaron.”
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