In the face of a stellar first quarter this year, in which the nation’s largest movie chain “set one performance record after the other” and made $251.3 million in EBITDA, AMC Theatres CEO Adam Aron continued to throw his support behind the major studios’ push for premium-video-on-demand. That’s the new window that could potentially step on the tail end of a film’s theatrical release, or as the studios like to call it, “the dark period” where most pics come off screen or are in runs at discount houses.
“We repeatedly have acknowledged our participation in discussions with our studio partners about the opportunity to increase the pie for studios but importantly for AMC as well through the creation of a so-called premium VOD window which we would meaningfully share in the economics,” Aron said during the exhibitor’s Q1 earnings call today. “As we’ve stated, we’re interested in working with the studios to find a mutually beneficial solution. Just as Kevin Tsujihara of Warner Bros said last week, we at AMC agree that there’s a real opportunity to work cooperatively to increase both the bottom line of movies studios, but also to increase the bottom line of AMC.”
He added: “I have to state as strongly and clearly as I can, at AMC we have a backbone and a firm one at that. If we can’t forge an agreement on a new window that advances our interests, we’ll take any and all necessary action to protect the long-term interests of AMC and those of our shareholders. Fortunately, we have a seat at this table and the talks that are underway are intriguing.”
Universal and Warner Bros, given their ancillary cable and satellite businesses — Uni with Comcast and WB with its pending AT&T merger — have been the most bullish about a new PVOD window. Disney finds no interest in creating a new window given its vibrant global B.O. run with its Marvel, Lucasfilm, Pixar and Disney Animation banners, which in turn spur great home entertainment revenues. Many majors remain hopeful that a PVOD agreement will be reached at the end of this year or the first quarter of 2018. However, the reality remains that distribution and exhibition are still far apart on how much the latter should share in this new window, and more importantly, how the monies will be split up. Until that is figured out, PVOD will not move forward, per Deadline sources.
Some distributors believe that exhibition should have zero percent of PVOD revenues since it’s not a product they control.
It’s funny that the studios are championing PVOD: In weekly Screen Engine/ComScore PostTrak audience polls, VOD and streaming are always outstripped by moviegoers’ interest to watch a movie they just saw again on the big screen, or to purchase it on Blu-ray/DVD. Those polled for Disney/Marvel’s Guardians Of The Galaxy Vol. 2 said 23% want to see the sequel next on Blu-ray, 20% on DVD, and 19% again in theater versus purchase digitally (10%), rent digitally (7%), buy on VOD (7%), or rent on VOD (6%).
Also on today’s call, Aron said that those AMC Theatres which have been renovated with luxury recliners are providing a big boom for the chain, currently available at 2,078 screens in 208 theaters. Of those 75 theaters which have had recliner renovations and expanded menus over the last year, they’re seeing attendance lifts between 40%-60%, average ticket price increases of 7%, and revenue jumps of 64%. Recliner venues rep 32% of AMC’s footprint, and the plan is to swell that to 51% of the chain in the near future with a running total of 326 theaters.
Aron also mentioned that the chain will count 100 Dolby Cinemas by the end of this year, which consumers “are will to pay a 70% price premium for”; MC continues to be the largest Imax operator in North America with 179 sites of its 198 global tally.
Recliners, Dolby, Imax — these are the things that persuade moviegoers to step away from their streaming device and TV, and drive to the multiplex.
Must Read Stories
Subscribe to Deadline Breaking News Alerts and keep your inbox happy.