November 9, 2018
Since launching Stubs A-List theatrical ticket subscription service less than five months ago as competition to MoviePass, AMC Theatres has generated 500,000 subs to the $19.95 monthly service.
As a result, CEO Adam Aron now says the service will be profitable in 2019 – a year ahead of projections.
Speaking Nov. 8 on the fiscal call, Aron said the service is generating $120 million in annual revenue that didn’t exist six months ago – excluding concessions. In addition, user data is tracking downward – with average subscriber screenings per month dropping from 3.4 to less than three.
The executive believes the ratio will drop to 2.5 screenings, which translates favorably on the bottom line. As subscribers attend fewer screenings, margins inch toward profitability.
“If this trend continues as other proprietary data in our possession often suggests that it will, we now believe … the program could be [fiscally] accretive,” Aron said.
“If we didn’t have A-List, some of those [subs] wouldn’t be buying tickets at all,” he said. “Some of those [subs] would still be buying tickets at AMC. But they’d be coming less frequently.”
Indeed, AMC plans to raise A-List pricing by 20% in California, New York, New Jersey, Connecticut, Massachusetts; and up 10% in other big markets.
Aron said feedback on social media to the planned hikes has been positive.
“You should read the Reddit message boards about A-List and our competitors. They’re fans of A-List because it offers them so much value,” he said.
Meanwhile, total AMC domestic Q3 revenue grew 5.9% to $895.6 million. The nation’s largest theatrical chain outperformed the industry, growing domestic attendance per screen by 9.1%, which was more than 4% better than the industry. The company, however, reported a net loss of $100.4 million, up 135% from a loss of $42.7 million during the previous-year period.
Wall Street wasn’t impressed, sending shares down 14% on Nov. 9.