Business

As AMC Stubs A-List nears its one-year anniversary, AMC Entertainment continues to be upbeat about the results of its movie theater subscription program, according to company CFO Craig Ramsey. “All the metrics of this program are moving in the right direction,” he said May 22 at the B. Riley FBR Institutional Investor Conference in Beverly Hills, Calif.

Pointing to the latest data announced by the company earlier in the week, he noted that about 50% of the more than 800,000 A-List members now are former members of its AMC Stubs rewards program who are “spending twice as much a month” as they used to. They are also bringing along twice as many viewers to see movies as they used to, which is stronger than the company expected, he said.

The company added an additional 100,000 members to the A-List program this spring and has added almost 200,000 more members so far this year, it said. The 800,000 members put the company “well ahead of its one-year target of 500,000 members by June 26, 2019,” it said, boasting that its membership number makes it the No. 1 moviegoing subscription service in North America.

The more than 800,000 A-List members are “probably a couple of hundred thousand more than we thought we would have” by now, Ramsey told the conference.

Stressing that the frequency with which A-List members are attending AMC theaters is “not the most important part of the profitability of this program,” he said: “It’s about bring-along because guess what? You usually don’t go to the movie theater by yourself. Some people do. But you usually take someone. It’s the bring-along that’s a very important part of the profitability of A-List. And obviously food and beverage [are] an important piece as well.”

Meanwhile, “some of the most frequent A-List members are also the most profitable” for the company because “they’re bringing a couple of people with them and everybody’s enjoying food and beverage,” he noted.

The company also plans to make changes to A-List to boost profitability further. “There’s so much more that we can do with that program going forward,” including with pricing and food/beverage promotion, Ramsey told attendees. As one specific example, he pointed out that members have been requesting a “subscription plan for the family.”

He added: “This is the beginning of what I think is going to be a pretty exciting program for our business: Theatrical exhibition moviegoing and certainly for our company. And we’re leading the way. First-mover advantage is everything here. Get the app on their phone. Get them in A-List. They’re very sticky. The cost of moving to another program is pretty high at that point.”

Summing A-List up, he described it as a “win-win-win” all around, explaining: “It’s a win for the consumer” because it gives them “flexibility” and “value.” Although all guests are important, “certainly the avid moviegoer is the most important one, I think, that you really want to pay attention to,” and A-List is “targeted at frequent moviegoers.”

A-List, meanwhile, is “a win for the studios” because they’re “interested in growing the brand value” of their movies and also “interested in more box office dollars,” he said, adding: “If “we grow incremental attendance, which we’re growing through this A-List program, that’s good for the studios.”

Finally, A-List is “a win for us” at AMC Entertainment because “we drive more attendance into our theatres and it gives us an opportunity to monetize that attendance, either through something as simple as ticketing fees” for those who buy tickets in advance, as well as the membership revenue, he explained. The program provides the company with an “ongoing, consistent membership revenue stream, and also loyalty,” he said, adding: “We’re stepping into the digital age. Information is so important, and A-List is just feeding that…. Information on moviegoers empowers us to engage with moviegoers, and we communicate with them a lot, [which] leads to more attendance.”

Asked if AMC Entertainment was open to showing movies made by Amazon, Netflix and other streaming companies, he said his company’s position is: “Do for one what you do for all the others…. We would look at streamer content providers … as another studio. It’s the same model for all content. We’d love to show it. We’d love to play it. We think there’s an endless scroll of content out there.” All new content producers must figure out how to differentiate and brand their content, and “we offer a lot for people that make movies,” he noted.

But AMC continues to believe that “the exclusive window” for content that movie theaters have “enjoyed for many years is the right way to launch that product,” the same as it still is for movies from traditional film studios including Disney, he said.