AMC’s new plan: get used to paying more money for better movie tickets

Say I want to take myself to see Magic Mike’s last dance Friday at the AMC 34th Street Theater in Manhattan. Could happen! And if that happens, I have two options: I can buy a regular ticket for $26.88. Or I can choose a seat in the center of the room and pay…$1 more.

If it were a Knicks game or a Broadway show, it wouldn’t be a big deal: consumers are well aware of the idea of ​​paying more or less for seats based on desirability and demand: front-row tickets for Taylor Swift cost thousand dollars; nosebleed to see a foreigner in vegas more affordable.

But for the beleaguered film business, this is a new idea. AMC Theaters is the world’s largest cinema chain. announced their “Sightline” Plan earlier this week: Most tickets are on sale at the regular price, but limited seats in the center of the theater will cost $1 or $2 more per ticket. This weekend, the plan will be unveiled in select locations in New York, Chicago, and Kansas City.

It also annoys many people. That’s likely why AMC CEO Adam Aron, whose company announced the program on Feb. 6, took to Twitter two days later to defend it, blaming the move for “inflationary times.”

Aron also noted that AMC will sell least desired tickets at a discount (more on that in a moment) and—in contrast to an earlier press release from his company that presented the move as inevitable, to be rolled out to all AMC theaters by the end of the year—he phrased it as “check”, the company will “carefully monitor“.

It’s an uncharacteristic defensiveness on the part of a CEO who’s been working at Musk’s level for the past few years (for Aron’s backstory and recent rise to be the leader of the meme stock, see below). great Businessweek profile). And it shows just how ingrained the idea of ​​universal ticketing is in American cinemas. As well as the problems associated with any announced price increase, especially at a time when Americans are seeing price spikes on everything from energy to the eggs.

So there might not be pay-per-seat movie tickets, but there probably should be. They make sense, and the theater business has deep systemic problems—some caused by its own mistakes, and others by big changes in how we consume entertainment. If you still enjoy watching movies in a room with other people instead of on the couch or on your phone, you’ll need to make some changes.

“They should have done this years ago,” said Michael Pachter, an analyst at Wedbush Securities. “I’m amazed no one has done this yet.”

Pachter, like Aron, points out that variable prices exist at almost every other entertainment venue, along with a host of other transactions that we all intuitively understand: when you’re on a plane, you know perfectly well that the person sitting next to you could pay much more or less, depending on when they bought their ticket.

We also tend to pay different amounts for movies depending on the time and place where we watch them: you can shell out an average US$11 per ticket for a movie when it comes out, or wait months and pay less to rent it to your house. . Or wait even longer and pay nothing (actually nothing, but it will seem so to you) when it appears as part of your Netflix, Disney+ or HBO Max subscription.

The movie business has also periodically attempted to set variable prices based on the type of show in theaters. In the late 1990s, then Universal Studios owner Edgar Bronfman Jr. suggested that films that cost more should have more expensive tickets, and was fully panned. But AMS played with an idea in 2019 without unnecessary pomp and little upset about this; by the time of last year Batman debuted, AMC raised the prices of this film (like other exhibitors) and bragged about it; he expects to do the same for other potential blockbusters.

And as Aron said, variable prices can also mean that audiences pay less to see a movie, although studios generally don’t allow theaters to cut prices beyond a certain level. However, in theory AMC’s new seating plan means I could see Magic Mike at a discount, as AMC cuts the price of “cheap tickets”—in this case, those in the front row—by $2. But in order to get this discount, I had to join an AMC fan club, and there was nothing on the Fandango ticketing app that told me this was an option. So let’s be clear: this is an attempt to make more money per ticket, not less.

It is also an attempt to increase revenue for a business with big problems. Even before the pandemic, people were going to the movies less and less every year for a variety of reasons: they don’t like the experience, or the movies they used to watch are being broadcast instead. Or they just enjoy scrolling through TikTok and YouTube.

In 2002, Americans went to the movies an average of 5.2 times a year; by 2019, according to Film Association, this number has dropped to 3.5 times a year. The trend doesn’t look like it’s going to improve after the pandemic: Last year, when the industry celebrated box office hits like Top Shooter: Maverickthe average per capita was still an anemic 1.9, according to media investor estimates. Matthew Ball.

This leads to a vicious circle: smaller audiences in theaters have pushed more studios to stream more films – good luck finding a romantic comedy in theaters these days – this means audiences are learning not to go to the cinema, which is pushing for more films . movies in streaming mode. All this leads to empty theaters.

This is why AMC is often cited as a candidate for bankruptcy. And why the owners Royal, the second largest movie theater chain in the US, filed for bankruptcy last month and will close 39 theaters. The industry is still trying to come up with new ideas to bring people back to theaters: as analyst Rich Greenfield points out, this month Paramount and movie theater chains seem to have successfully lured older audiences to watch. 80 for Bradya movie about… older people who like Tom Brady… setting lower prices. But any observant industry observer will tell you that there are too many movie screens and that there will be more in the future.

Meanwhile, movie theaters are figuring out how to cut costs with fewer employees and online ticketing, and raise prices in less obvious ways, like promoting more expensive food. (Though it still didn’t help Alamo Drafthousereally great boutique movie theater chain, from the filing of Chapter 11 also a couple of years ago).

Eventually, they’ll want to raise ticket prices one way or another: “They’ve done a great job of making concessions,” Pachter says. “The next thing is to charge us more.”

This is probably not what you want to hear. But if you still love going to the movies, you’ll have to get used to it.