Published on: October 16, 2019by Kevin Coupe
Let's just say that this one belongs in the if-you-can't-beat-them-join-them file.
AMC Entertainment, which operates movie theaters all over the world, is getting into the streaming business, in essentially joining the stream (sorry!) of companies that have decided that this is where the money is. It also positions AMC to compete with the very companies that have been competing with movie theaters, eating away at their audiences and profitability. (AMC attendance during the first six months of this year was down 3.6 percent.)
According to a New York Times
story, "The service, AMC Theaters On Demand, will offer about 2,000 films for sale or rent after their theatrical runs, just as iTunes, Amazon and other video-on-demand retailers do … Hollywood’s five biggest movie studios — Disney, Warner Bros., Universal, Sony and Paramount — have made deals with AMC for catalog and new-release movies. Although DVDs still account for billions of dollars in sales for studios, more profit now comes from digital downloads and rentals."
Adam Aron, AMC’s president/CEO, tells the Times
that "our theater business is mature. There is a high-growth opportunity in this digital expansion," which he describes as a "natural" extension of the company's core business. Aron says that the company hopes to "capitalize on the chain’s fast-growing customer loyalty program, AMC Stubs, which covers more than 20 million households."MarketWatch
, in its story, suggests that "the news is the latest threat to the dominance of Netflix, which has seen its stock fall 23% in the past three months as it awaits an onslaught of new competitors in the streaming world. Apple Inc. and Walt Disney Co. are both set to debut streaming services in November; both are cheaper than Netflix’s offering."
I think this is an interesting strategic move, and maybe the folks at AMC figured they didn't have much choice. But to me, it feels like a me-too effort and unlike what Apple and Amazon and Netflix and a lot of the other streamers are doing, AMC won't be offering original content … which is to say that it won't have a private label. It'll just be stocking other companies' products, which, best I can tell, also will be available elsewhere.
In one way, this mirrors the problems that AMC has in its theaters, where it is dependent on the movies made by others. If the movies are good and/or popular, it can get fannies in the seats. While it has invested a lot in creating a better experience in its theaters (except in the one in Port Chester, New York, where they seem incapable of fixing leaking toilets in the men's room), those improvements will only go so far; plush seats and bars won't get me to go to a theater if there aren't any movies there that I want to see.
This could be a nightmare for AMC … at the very least, it is likely to be an Eye-Opener.