The culture of subscription-based movie streaming sites is gaining momentum in Hollywood, and it has the potential to change the entertainment industry forever.
The entertainment industry is experiencing a major upheaval.
If you don’t believe in the veracity of this statement, the latest evidence – an announcement by AMC in which it unveiled its decision to launch its own subscription-based program – should convince you otherwise.
Dubbed A-list, AMC’s subscription-based program is a nod to the new realities of Hollywood, one in which cinemagoers want more value than entertainment from their night out.
What it also suggests is that Netflix has changed the entertainment industry, though it isn’t clear for now whether it’s for good or worse. Today’s movie lovers aren’t fond of spending as much as $20 to watch a single movie, what they look forward to is paying for monthly content packages.
The recent move by AMC is a break-away from the past moves of movie theatres when they increased prices and added more amenities to paper over reducing audience numbers. Ticket prices have seen a 50% rise since 2002, though ticket sales have nosedived by 20%.
In case you’re wondering, it is the younger generation – the one that makes the biggest chunk of Netflix subscribers – that is moving away from the theatres.
In response, theater giants such as Regal and AMC talked about the premium experience they offer to cinemagoers. Old seating has now been replaced, with plush recliners taking their place. Beer and wine have been added to cinema menus, with IMAX and 3D also gaining momentum.
However, at a time of rising inequality, stagnating wage bills, and crushing student loans, moviegoers do not want those amenities. What they want, put simply, is a deal. That demand for a deal was one of the reasons why MoviePass, an upstart company which offers a movie-a-day for less than $10 a month, now has three million subscribers.
AMC’s recent announcement, therefore, should be seen as a push by the theatre-giant to rival the domination of MoviePass. However, while you can be a subscriber to MoviePass at less than $10 a month, AMC would require you to pay $19.99 for its monthly subscription package.
The added cost, however, isn’t without any benefits. While MoviePass lets you see a movie a day in most movie theatres, you only get to see it in 2D with the requirement that tickets be purchased closed to show times.
In contrast, AMC will give its subscribers the option to watch three movies every week in IMAX and 3D, premium formats which MoviePass doesn’t provide. What’s more, it also gives you the option to reserve seats in advance.
So, what will be the effect of services like AMC and MoviePass on the studios? To be honest, they won’t take a financial hit. All they want is money, and they could care less whether you’ve purchased your ticket from a subscription service or on a la carte.
However, the same cannot be said for both AMC and MoviePass, two services that are likely to take a hit. MoviePass is already suffering huge losses and AMC’s CEO Adam Aron is adamant his company will take a $10 to $15 million hit over the next two quarters.
Still, while AMC – thanks to its bigger pockets – could withstand the financial hit, the same couldn’t be said about the upstart MoviePass.