This is what AMC chief Gerry Lopez was talking about in February when he told analysts that they’d be “blown away” by a deal he was lining up for his AMC Prime large screen venues.
Less than two weeks before the exhibition industry converges on Las Vegas for its CinemaCon convention, the No. 2 chain just unveiled an agreement with Dolby Laboratories to establish a line of “Dolby Cinema at AMC Prime” theaters. They will combine Dolby Vision laser projection and Dolby Atmos sound with AMC’s power reclining seats that include transducers to make them vibrate in alignment with on-screen action.
The experience will leave moviegoers “impressed, thrilled, and excited by what they see, hear and feel — all from the comfort of their reclining chains,” Lopez says. Dolby chief Kevin Yeaman crows that the technologies offer “a unique moviegoing experience with rich and vivid imagery and lifelike sound.”
AMC will begin by converting existing ETX and AMC Prime sites into Dolby Cinema ones. It expects to have four by mid-May: in Los Angeles, Kansas City, Houston, and Atlanta. It plans to have 50 by the end of 2018, and 100 by the end of 2024.
The partnership makes sense for the exhibition chain: With a heavy concentration of theaters in big cities, AMC is eager to establish itself as the go-to destination for high-end cinema. AMC led the industry in rolling out plush reclining seats — and has more Imax screens than anyone else.
But it also wants to expand its own fleet of large screen venues. The company says that they complement, and don’t compete with, Imax. Whatever the case, they enhance AMC’s bargaining leverage in negotiations with Imax. And it can only help to attach a well-known brand like Dolby. Last week Imax introduced its laser projection system in Los Angeles.
AMC’s EVP of U.S. Operations John McDonald won’t say how much his company expects to spend on the initiative, but notes that “it’s not a bet-the-farm” figure– and was accounted for in its current business plan. AMC will pay Dolby a license fee for the technology. The change will help AMC “get to market faster and in a more comprehensive way” with its large screen roll-out.
Nothing in the deal precludes Dolby from cutting similar agreements with other theater owners, the company’s SVP of Cinema Doug Darrow tells me. But “it wouldn’t be advantageous to deploy it” in a way that would compete with AMC.
For Dolby, deepening a foothold in exhibition can give it more clout to shape the development of High Dynamic Range video, which includes next-generation 4K, or Ultra High Def, television. Dolby Vision is “our end-to-end imaging solution” to participate in the entire entertainment food chain — from content creation to theaters and home video — Yeaman told analysts in January.
Dolby was a founding member of the UHD Alliance, a group introduced in January at International CES. It hopes to set industry-wide standards for 4K to prevent the chaos that helped undermine 3D television. Other Alliance members include Disney, Fox, Warner Bros, DirecTV, Netflix, Panasonic, Samsung, Sony, and Technicolor.
Dolby could use a win. Its stock price has declined 12.8% over the last 12 months as DVD and PC sales declined, and it struggled to secure licensing deals for its audio and video processing technologies in mobile devices. By contrast, AMC is up 52.9%, helped by the better-than-expected performance of Hollywood’s slate in Q1.