NEWS ANALYSIS — Following a second-quarter fiscal report that saw just 45% (22 million) of AMC Theatres’ moviegoing traffic return compared with the same period in pre-pandemic 2019, CEO Adam Aron is open to discussions with just about any potential business partner to bring customers back to the cinema.
Aron he wants customers in his theater seats consuming just about anything on the screen. That mindset was clear on the Aug. 9 fiscal call where Aron revealed the world’s largest exhibitor would begin accepting cryptocurrency as payment in its theaters by the end of the year.
“We are simultaneously writing the code right now to accept Apple Pay and Google Pay for online purchases at our U.S. theaters,” Aron said.
Back in 2019, when Disney led all studios with $11 billion in box office revenue, Aron said the chain would begin selling movie DVDs (i.e. Frozen) in theater lobbies. It’s an idea that never left the launch pad with the arrival of COVID-19, among other issues.
AMC had a net loss of $344 million on revenue of $444.7 million in Q2. The company has about $1.8 billion in cash after raising 66% of that from equity sales in the first quarter. The chain needs revenue drivers. And Aron said he would entertain any idea that could make that happen. He said the company even considered investing in drive-in theaters during the height of the pandemic.
“We came to the conclusion that they’re a bad economic idea,” Aron confessed. “It sounds appealing, yes, to your stay in your car, but there are two problems: Go into a parking lot and look at how much asphalt is needed to park cars on a lot. The viewing experience at a drive-in theater is not necessarily great, because many people are quite far from the screen.”
And so died the AMC Drive-In.
On the call, Aron was asked whether AMC would consider partnering with video game retailer GameStop offering expanded in-theater “experiences” with local and national gaming competitions. The president of Epic Games is a member of AMC’s board of directors.
“I cannot even count the number of times that our shareholders have asked us to reach out and partner with GameStop,” Aron said. “We’re on the case, more to come.”
For Aron, that’s just scratching the surface. The chain is considering screening musical concert movies, professional sporting events and e-sports, among other attractions.
“Wasting no time, we’ve immediately started to implement these very good ideas,” Aron said. “Our first two UFC matchups, which were in July, drew significant attendance to our theaters.”
AMC’s first two concert movies, with Chance the Rapper, and Halsey, will show on screens across the country later this month.
“We’re quite optimistic that this alternative programming can be built into a real revenue opportunity for AMC in future years, and we’re chasing it hard,” Aron said. “We also hope to engage in meaningful dialog with professional sports leagues and collegiate sports conferences to see if we can obtain the rights to show more sporting events at our theaters.”