AMC Entertainment (NYSE: AMC) hit another milestone with its game-changing multiplex subscription service this week. The leading exhibitor announced on Monday afternoon that AMC Stubs A-List is now up to 800,000 members, not a bad haul for a premium platform for moviegoers that wasn't even around 11 months ago.
Growth may be slowing for AMC Stubs A-List, but it's starting to seem like the only game in town when it comes to full-featured subscription plans. Third-party rival Sinemia pulled the curtain on its stateside operations last month, and Helios and Matheson Analytics' (NASDAQOTH: HMNY) MoviePass isn't long for this world.
Let's all go to the lobby
AMC Stubs A-List charges $20 to $24 a month for a plan that allows as many as three weekly screenings in most standard and premium formats. Folks can reserve their seats ahead of time, as well as access expedited lines for the concessions stand.
AMC Stubs A-List works, and unlike Sinemia and MoviePass, the service is sustainable. AMC can control its costs, unlike Sinemia and Helios and Matheson's MoviePass that have no clear path to profitability because they have to pay retail prices for the tickets they're securing with no piece of box office or concessions action. Some of AMC's smaller rivals are starting to roll out similar offerings, but good luck catching up to the leader.
It's not a surprise to see AMC slowing down. It went from 0 to 600,000 through the second half of last year, and it has only tacked on 200,000 more through nearly five months of 2019. A weak crop of movies earlier this year and a 10% to 20% price hike in key markets have probably weighed on its momentum. We also probably had most diehard film fans flock to AMC Stubs A-List last year when it launched. It's probably picking up a few frustrated Sinemia and MoviePass subscribers now, but the best shot at growth lies in the rich pipeline of new releases hitting movie theaters later this year.
Unlike Helios and Matheson, whose losses mounted as folks flocked to summertime blockbusters, AMC is more than happy to yield its piece of the box office receipts for the sake of high-margin popcorn, drink, and snack products. AMC's press release claims that it now operates the country's top movie subscription, an impressive feat since MoviePass at half the price peaked north of 3 million early last summer. MoviePass would go on to make its service more restrictive to preserve capital.
We don't know how many members MoviePass is entertaining these days because Helios and Matheson has yet to file its 2018 annual report as well as its first-quarter financials. There probably aren't a lot of fans for the service still around, and that's just fine for AMC. It decided to respond to the disruption of its own model by disrupting the disruptor. AMC is doing everything it can to make sure that it secures its own Hollywood ending.
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