Film-Tech Forum ARCHIVE: AMC Joins The Subscription Service Wars

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Posted by Jonathan M. Crist (Member # 413) on 06-21-2018, 01:01 AM:

AMC Theatres on Wednesday unveiled AMC Stubs A-List, a $19.95 a month ticket service that allows members of its loyalty program AMC Stubs to see up to three movies per week. The program kicks off next Tuesday, when members can enroll online and start using the service immediately.

AMC Stubs A-List is so far the biggest competitor to other rival subscription services like MoviePass, which limits its subscribers to one 2D movie a day and each unique movie can be viewed only one time. AMC has upped the ante by allowing its subscribers to watch any movie at its theaters at any available showtime and in any format, including IMAX and 3D. A-List also allows moviegoers to book tickets in advance, a feature that is not available with MoviePass.

AMC said it will continue to accept MoviePass at all of its locations.

MoviePass has made headlines in the last year for disrupting the movie theater experience at a time of uneven attendance at movie theaters.

The service has bumped heads with traditional theaters, including AMC, which at one point even pulled its program from certain locations. CNNMoney reported in May that MoviePass' parent company, Helios and Matheson Analytics, burns through approximately $21.7 million each month to keep MoviePass in operation.

Helios and Matheson Analytics issued a warning about the company's ability to stay in business in a regulatory filing in April.

AMC has now swooped in with its own plan to court moviegoers. AMC Theatres CEO and president Adam Aron used the opportunity to take a jab at its popular competitor in his own statement on Wednesday.

"We believe that our current and future loyal guests will be interested in this type of program, as AMC Stubs A-List rewards guests with something that no one else offers: the very best of AMC, including IMAX, Dolby Cinema and RealD 3D up to 3 times per week, for one simple, sustainable price," Aron said.

MoviePass responded on its Twitter account on Wednesday.

"Heard AMC Theaters jumped on board the movie subscription train. Twice the price for 1/4 the theater network and 60% fewer movies. Thanks for making us look good AMC!" the tweet read. "AMC has repeatedly disparaged our model as a way to discourage our growth because all along they wanted to launch their own, more expensive plan. We want to make movies more accessible, they want more profit."

AMC has repeatedly disparaged our model as a way to discourage our growth because all along they wanted to launch their own, more expensive plan. We want to make movies more accessible, they want more profit.

AMC STUB PLAN

Posted by Scott Norwood (Member # 30) on 06-21-2018, 06:44 AM:

I wonder what AMC thinks that its selling point is? On the surface, their option seems to be more expensive and less useful (as the Movie Pass spokesman said). Do they not sell data about subscribers? Do they not require the use of a cell phone? Is there any other reason why people would want to pay more for less with the AMC option?

(And, yes, I realize that Movie Pass does not seem to have a sustainable business model, but that is not really a concern for the ticket-buying public.)

Posted by Carsten Kurz (Member # 5396) on 06-21-2018, 07:29 AM:

One reason a ticket-buying public might go with AMC could be that they assume AMC to survive more than a couple of months. Or maybe that AMC is not going the MoviePass way of 'We reserve the right to change conditions for this service towards any our liking at any time without prior notice'.

- Carsten

Posted by Jack Ondracek (Member # 1466) on 06-21-2018, 08:24 AM:

As I understand the differences:

AMC allows access to all formats of the shows they run. Movie pass only allows 2D.

3 movies per week VS 7 wouldn't be a deal-breaker. It's well within my personal habits. Access to (avg) 13 shows of my choice per month VS a controlled list of 30 or 31 in a specific format doesn't put MP ahead of the game for me.

I don't believe AMC limits viewing to one-time-only, as MP now does. They also allow multiple shows per day, if separated by 2 hours.

AMC controls terms of service, potentially making their program more stable than MP, which often changes their terms, seemingly to make it harder to use the service.

AMC doesn't require its members to take pictures of their tickets, then hope the app actually sends in the picture, in order to avoid disruption of service.

I'm not a user, but I understand AMC's app is more stable than MP, doesn't require GPS-validated check-in and doesn't require newer-model phones in order to work.

If AMC actually has responsive customer service, that would just about rationalize the added cost by itself.

Discounts on concessions would be a nice touch, though I haven't heard what that actually means. AMC gets to control this, and tailor it to (somehow) attract people to their snack bars. As for Movie Pass, I can't see a scenario where any major exhibitor will ever let them into their revenue stream. Their subscribers will continue to get no discount, though the exhibitors I've seen report on this say that MP subs' concessions patronage is extremely low, by comparison.

I can see a rewards / loyalty program being about more than price. From what I've read about the aggravation of using Movie Pass, I would definitely consider AMC's model, and the additional $10 wouldn't put me off at all. One or two trips to an average show would easily cover the cost. Everything beyond that is bonus.

Posted by Harold Hallikainen (Member # 5405) on 06-21-2018, 10:35 AM:

It certainly seems like this could be more profitable than MoviePass. Higher price and lower cost. MoviePass is paying the retail price (about $10) for each movie, while AMC is certainly paying less. I wonder what they are paying for each movie someone watches under this pass. Is a typical license from a studio or distributor based on a percentage of each ticket sale? How would license fees be calculated under a flat fee system like this? With MoviePass, of course, the percentage per ticket could still be used. But how about AMC's system?

Harold

Posted by Scott Norwood (Member # 30) on 06-21-2018, 11:44 AM:

Jack's points all make good sense. The AMC service could definitely work for many people, particularly in markets dominated by AMC.

I, too, am curious as to what the film distributors are being paid. Do they get the equivalent of their regular take based on a full-price adult ticket? Or does AMC divide the price of the monthly pass by the number of uses per month and consider that to be the "ticket" price (in which case they would not lose money on the pass, but would likely irritate a bunch of distributors)? I am guessing that AMC won't tell us, or at least not outside of a legally mandated financial report.

At least this seems to be an attempt to create a legitimate business model from flat-rate pricing, as opposed to what Movie Pass has been doing.

Posted by Jack Ondracek (Member # 1466) on 06-21-2018, 12:11 PM:

While it's certainly possible that AMC could strike individual deals with the studios on this, that would infer that the studios were willing to eat part of AMC's promotion. In 35+ years of theatre ownership, that's something I've never seen. So it's possible, but in my world... not likely.

Studio contracts state that you, as the exhibitor, can charge whatever you want for a ticket. However, the studios reserve the right to set a minimum rent per-customer. Charge under that figure and you'll make up the difference from your concessions or, if you're a multiplex, maybe what's left from one of your other movies. If you charge more, as is expected, you keep what's left after you pay the negotiated percentage.

The contracts also state that you aren't prevented from charging different prices for essentially the same ticket. What you're suggesting under this scenario falls under this rule. The catch is that you have to pay percentages on the highest-priced ticket in that class. So if you customarily charge $10 to me, but you give someone else a discounted $8 ticket, you're obligated by contract to pay percentages as if both tickets were $10. That sort of blows any inclination to sell discounted blocks of tickets to an outfit like Movie Pass.

When you get your ticket under their program, AMC is (should be) paying out a percentage to the relevant studio as if you had just bought a full-priced matinee or evening ticket. So they're not eating the full price, just the rental to the studio.

Granted, Movie Pass pays for the full-priced ticket instead of the customer, which is fine, except for all of the baggage that comes along with the program.

Oh... BTW... My wife just pointed out that the 2-hour wait between ticket purchases under the AMC program starts from the beginning of the show you purchased first... not the end.

Posted by Jack Ondracek (Member # 1466) on 06-21-2018, 06:06 PM:

This describes the current comparison fairly well:

https://www.hollywoodreporter.com/news/amcs-rival-moviepass-program-dissected-1122016

As MoviePass struggles to stay afloat, mega-theater circuit AMC has upped the ante by offering its own ticket subscription service in the U.S. that will allow patrons to see up to three movies a week in any format — including Imax — for $19.95 a month.

AMC's groundbreaking program, called "AMC Stubs A-List," launches on June 26. If it works, other theater chains are likely to follow suit in earnest as the film industry struggles to stem declining attendance. AMC is the largest theater circuit in both the U.S. and the world. Cinemark, the third-largest chain in the U.S., also offers a subscription program, but it's far less ambitious.

In response to AMC's move, MoviePass quickly tweeted that AMC was copying its model.

In fact, though, rather than copying MoviePass, AMC is borrowing its approach from subscription services that have been offered by major chains in Europe for more than two years, particularly in the U.K., where AMC operates Odeon.

"In Europe, people who use these services go to the movies twice as much," says Wall Street analyst Eric Handler of MKM Partners. "And while you might be paying more for AMC's service than for MoviePass, you are getting a lot more flexibility,"

Adds RBC Capital Markets analyst Leo Kulp, "We see AMC's subscription plan as an innovative way to try to increase attendance. While we don't necessarily see this competing with MoviePass — we see AMC's plan as a premium offering — it could benefit from any disruptions at MoviePass."

Below are the highlights of the movie subscription services in the U.S. Keep in mind that while the average movie ticket price was $8.97 in 2017, the cost of going to the movies is notably higher in major hubs like New York City and Los Angeles.

AMC A-List

The program officially launches June 26.

Members can see up to three titles a week, and can even see all three in one day. And members can also watch the same film multiple times.

If a member doesn't see all three possible movies in one week, unused "tickets" can't be carried over from week to week.

Members can see a film in any format, including Imax. Generally speaking, the upcharge for an Imax ticket is $4 to $5. And in cities like L.A. or N.Y.C., an Imax ticket can cost upwards of $21.

"I think the allure of this particular program is that you can see premium cinema," Imax chairman-CEO Rich Gelfond tells The Hollywood Reporter.

A-List members can also buy a ticket online and reserve a seat at no added charge.

Free concession upgrades.

There's a three-month minimum to join.

Those who sign up for a year can lock in the price of $19.95.

MoviePass

MoviePass costs less than A-List. For $9.95 a month, MoviePass patrons can see one movie a day. However, there are major caveats.

MoviePass hasn't allowed its customers to see a film in premium formats, such as Imax, but today MoviePass chief Mitch Lowe announced that members will be able to pay an upcharge of $2-$6 to see a film in a premium option.

MoviePass chief Mitch Lowe said Thursday that MoviePass will soon implement a $2 surcharge for a high-demand title, most likely on opening weekend. The program also intends to begin offering access to premium formats by the end of summer. However, unlike AMC, MoviePass customers will have to pay an added fee of $2 to $6.

MoviePass also intends to introduce an "add a friend" option.

MoviePass members can't see the same film twice.

MoviePass is only good for same-day tickets.

Cinemark Movie Club

For $8.99 a month, members get one free regular movie ticket per month.

Unused tickets will roll over.

Members get 20 percent off of concessions.

Online fees are waived.

A member can buy a second ticket for $8.99.

Sinemia

The company offers various yearly packages, ranging from one movie ticket per month for $4.99 to three movie tickets per month for $14.99.

Members can see a film in any format.

Tickets can be reserved in advance.

Posted by Mike Blakesley (Member # 26) on 06-21-2018, 11:01 PM:

quote: Jack Ondracek
MoviePass chief Mitch Lowe said Thursday that MoviePass will soon implement a $2 surcharge for a high-demand title, most likely on opening weekend.

Oh, THAT'S gonna go over well.

So, doing the math on the AMC thing. If you can see 3 movies a week, that's 12 a month, for 19.99, or $1.66 per movie. Most people won't go that often, but even if you only see ONE movie a week, that's five bucks for a movie. Pretty darn cheap.

My question (as mentioned above) is what AMC is paying the studios. If they're being allowed to fudge the ticket price based on their actual income from the subscriptions, then they're gonna open up a can of worms like nobody's ever seen.

Posted by Andrew Thomas (Member # 7000) on 06-22-2018, 02:06 AM:

quote: Mike Blakesley
My question (as mentioned above) is what AMC is paying the studios. If they're being allowed to fudge the ticket price based on their actual income from the subscriptions, then they're gonna open up a can of worms like nobody's ever seen.

Unless they have special license agreements, they are paying the studios their share of the regular priced ticket.

Posted by William Uhlhorn (Member # 1923) on 06-22-2018, 03:12 PM:

Special license agreements that you and I will never see or have.

Posted by Mike Blakesley (Member # 26) on 06-22-2018, 04:56 PM:

So, if it's an $11 movie ticket and typical film rental is 55%, they're paying $6.05 to the studio. If a user goes to one movie a week (which is not outrageous), 6.05 x 4 = 24.20.

They're going to sell those four tickets for $19.95? And then offer concession discounts besides, apparently.

If a user goes to more than one movie a week (also not outrageous), they'll lose even more..... "IF" they're paying full bore to the studios, which maybe they aren't, according to this excerpt from a Wall Street Journal article, which I can't link to because it won't let me read the whole thing:

quote:
Hollywood studios may seek changes to a new MoviePass rival because of concerns about how the service determines their cut of the sales, according to people with knowledge of their thinking.

The subscription service, announced earlier this week by AMC Entertainment Holdings Inc., the nation’s largest cinema chain, would calculate studios’ share of ticket sales based on a price that is lower than they actually cost in most major cities—and lower even than the average charged nationwide by AMC.

I fear we are all going to regret that this whole subscription thing ever left the starting gate.

Posted by Paul Arch (Member # 10425) on 06-24-2018, 04:18 PM:

Here in the UK, monthly movie passes have been around 20 years. Originally started by Virgin cinemas where you could buy a months or 2 months pass. You could see as many movies as you liked, the only catch was you couldn't book online and could only get your ticket from the box office on the day you wanted to see the movie (at this time there was no 3D, IMAX (in mainstream cinemas), 4DX etc. Then when Virgin sold their cinemas to UGC they made it a monthly subscription pass for £9.99 month. Again you could see as many movies as you like, but again you could only buys tickets on the day you wanted to see a movie. Since then Cineworld (now owners of Regal) have taken over the chain and the Unlimited card seems popular than ever with Odeon Cinemas (owned by AMC now) introducing their own scheme as well.I have had the Cineworld version since it was introduced by Virgin 20 years ago. As a movie goer it is a good deal. For £17.90 ($23.75) a month. After a year or membership 3D is also included free. You can see as many movies as you like (even the same one several times), you can book online and get 25% discount on all food and drink at the cinema. There is an additional charge for IMAX and 4DX. For me its a great deal. A movie ticket cost £10.90 ($14.46) so once I have seen two movies in a month I am in credit.
Things may have changed but 3 or 4 years a go they used to but a ticket price on the unlimited ticket stub and this was £2 or £3 less than a std ticket cost, so I guess they had made a deal with the distributors.

Posted by Buck Wilson (Member # 5885) on 06-24-2018, 10:22 PM:

Mike are you seeing a lot of Moviepass yet? We get a ton here.

Posted by Mike Blakesley (Member # 26) on 06-24-2018, 10:54 PM:

I've only had one guy ask me about it, and I told him we weren't on their "list." Other than that, no interest at all. It's not that big a deal here anyway since we only have 1 screen, often play movies for 2 or 3 weeks and hardly anyone comes to "every" movie anyway...plus our prices are fairly low so nobody sees a need, I guess.

I think with the AMC thing taking off we may get more people asking about it. I figure if it stays in business another year maybe we'll think about it. Or if we get a lot more demand.

Posted by James Wyrembelski (Member # 9037) on 06-25-2018, 09:18 PM:

quote: Mike Blakesley
I've only had one guy ask me about it, and I told him we weren't on their "list."

I wonder what makes them decide to put you on this list. I had no idea we were listed as accepting moviepass until someone happened to mention we were....

Posted by Mike Blakesley (Member # 26) on 06-26-2018, 12:38 AM:

I dunno, but when it first started I went looking on their site for a way to contact them to get on the list and didn't find anything, and then they started playing their silly little games so I decided we weren't interested anyway. Then the fact that nobody has asked about it made me feel like that was a good decision.

Maybe it has something to do with showtimes being listed on some sites or something? We don't upload our showtimes to anything but our own home-brewed site, but somehow Google seems to pick them up anyway.

Posted by Martin McCaffery (Member # 37) on 06-26-2018, 08:05 AM:

We were never asked about being on "The List". People just started coming up to the window asking if we took MoviePass. I took their card and said "Let's see" and ran it through to reader. It worked and we got our $10.
Now I just say tell people to be sure to get their money's worth because I don't expect them to be around long.

Posted by Daniel Schulz (Member # 1881) on 06-26-2018, 02:07 PM:

quote: Scott Norwood
I wonder what AMC thinks that its selling point is? On the surface, their option seems to be more expensive and less useful (as the Movie Pass spokesman said).

A major selling point is that unlike with MoviePass (which requires you to be physically at the theater to buy a ticket with the app), AMC will let you purchase in advance, from home, and reserve a seat if it's a showtime with reserved seating. That, coupled with the inclusion of Dolby Cinema and IMAX screens, makes it a pretty compelling offer IMO (assuming of course you live in a market with one or more AMC locations).

Posted by Martin McCaffery (Member # 37) on 06-26-2018, 03:23 PM:

The only AMC in this town is a discount house (3.99 daytime, 5.99 evening) so they would have to raise their prices to make it worthwhile. Though 3D/Big screen cost more, so if you see enough blockbusters it may be worth it. I don't know if you can use the card on Fathom events, which a prime rate tickets.

Posted by Steve Kraus (Member # 476) on 06-27-2018, 08:42 AM:

Cinemark has a program as well: $8.99 per month but for only one movie; additional tickets are also $8.99; 20% off concessions.

I don't see why the exhibs feel the need to offer a program at all. Take the MoviePass stockholders' money, so long as MP holds out, and laugh all the way to bank. I don't think anyone is giving MP a cut; if they are it's definitely on the down low.

So unless MP decides to cut off a chain (as they did for a time with a few high profile AMC locations) and thereby steer patrons to the competitors, there is no downside. So long as everyone takes it there is no advantage to them. Maybe people getting tickets sort of free will encourage more concession spending which the exhibs would certainly appreciate.

Now with surcharges looming, this could cause people to shift their viewing away from opening weekend. That will have an effect on the industry and IMHO, for the better since I think far too much attention is given to opening grosses.

Posted by Mike Blakesley (Member # 26) on 06-27-2018, 01:30 PM:

Agreed, moving the emphasis off the opening weekend can have nothing but good results.

Along with the lower price, maybe people like the subscription idea because the charge shows up on the credit card bill along with the Netflix and the Hulu and all the other things, and they're not having to drag a 20 out of their pocket to go to the movies so it "seems free." So in the spirit of "giving people what they want," I can see why exhibs want to start their own program.

I'm just curious how it's working out with the studios, film-rental-wise. Maybe there are some backroom deals we don't know about.

Posted by Mike Rivest (Member # 5500) on 06-28-2018, 06:54 PM:

Looked at the Fort Worth Star Telegram of December 18th, 1998 and Cinemark offered an Cinepass for $199 for 1999. It offered unlimited movies.

Posted by Mitchell Dvoskin (Member # 751) on 07-09-2018, 10:41 AM:

A friend of mine tried signing up for AMC's subscription plan, and was not allowed. It seems that while existing AMC Stubs Premium members are allowed to upgrade and use their Stubs card, new signups MUST have a smart phone or they can not use the service. My friend does not have any kind of cell phone, and is so pissed about this that he has vowed never to set foot in an AMC theatre again. Fortunately for him, in this area, AMC has lots of competition.

Personally, I have never tried to sign up for any subscription movie theatre service, I am content to wait for Netflix to send me the Bluray, and don't go out to enough movies to justify the expense, so I can't directly comment on this or any of the other subscription services.

Posted by Martin McCaffery (Member # 37) on 07-09-2018, 11:14 AM:

The are giving out the brochures at our local AMC, which makes no sense as it is a discount house. But hey, there's a sucker born every minute.
Yes, you need a smart phone and it is linked to your credit/debit card, as opposed to one issued by MoviePass. (I wonder what happens if you try to sign up using and MP Debit card). The allegedly will check your valid photo ID when you get to the theatre.
You have an initial 3-month commitment, but if cancel anytime after that, you can't sign-up again for 6 months. I wonder, also, how easy they make it for you to quit.
Let the complaining begin!

Posted by Mike Blakesley (Member # 26) on 07-09-2018, 11:32 AM:

So let's see, based on all the complaints, a perfect movie theater subscription would let you:

- Go to as many movies as you want, as many times as you want
- Take a few people with you, such as your family or a friend
- Go to a 3D or premium format movie if you want
- Go to any theater you want, no matter what brand
- Go to any showtime you want
- Spend $20 or less a month plus give you concession discounts
- Give you a backrub while you're waiting for the movie to start

... all while making lots of money for the subscription provider and giving full payment to the studios.

I don't really understand how anybody ever expects anyone to create a subscription plan that meets all those criteria. It seems impossible.

Posted by Mark Gulbrandsen (Member # 72) on 07-09-2018, 11:41 AM:

AMC? I don't know a single soul that wold go see a movie at any AMC Theater! Yes, we have there here in Salt Lake Silly too... Just awful places....

Mark

Posted by Mark Strube (Member # 4190) on 07-09-2018, 04:12 PM:

quote: Mike Blakesley
I dunno, but when it first started I went looking on their site for a way to contact them to get on the list and didn't find anything, and then they started playing their silly little games so I decided we weren't interested anyway. Then the fact that nobody has asked about it made me feel like that was a good decision.

Maybe it has something to do with showtimes being listed on some sites or something? We don't upload our showtimes to anything but our own home-brewed site, but somehow Google seems to pick them up anyway.

I believe they pull their showtimes from CinemaSource... that's what my theaters submit to and our theaters and showtimes are listed in the MoviePass app (most of the time). Not sure what it costs to be listed on CinemaSource, but if there's any competition in your market, it might be worth it. If not, I wouldn't bother.

Posted by Martin Brooks (Member # 1269) on 07-11-2018, 10:27 PM:

From AMC's perspective, they have a lot of empty seats, especially during the week. In the first quarter of this year, they sold only 92 tickets per day per screen. If they're running an average of four shows a day, that's only 23 tickets per show, per screen.

The annual number of movies per capita in the U.S. was only 3.77 in 2017 at an average ticket price of $8.97 for a total of only $33.82. At $20 per month, they get someone to spend $240 even if they never purchase a single concession item.

From a consumer perspective, in locations where AMC dominates (like NYC), it's a pretty good deal. A full price ticket to the Dolby Vision screen is about $25 and so is IMAX and Lie-max. Even if I saw only one movie a month, I'd save money.

Posted by Terry Monohan (Member # 8285) on 07-19-2018, 09:30 AM:

AMC Metreon Theatres SF has jacked up their prices. I want to go see the new 'Mama Mia' movie this Friday senior matinee and they want for the Dolby Cinema almost $20 per seat plus a $2 service fee. I can go a few blocks away to the Cinemark Century 9 large XD screen and see the same movie for $15 plus $1.50 service fee. with 5 of us going and Iam buying the tickets at the AMC Dolby Cinema price add up. I will be going to the Cinemark Century 9 Friday in San Francisco CA. I think AMC has raised their single ticket prices so you buy into their monthly 3 per week $19.95 deal. At AMC Metreon Dolby Cinema in SF they have major problems all the time with people getting refunds with the movie not coming on the Dolby Cinema screen. I think once AMC finds out they are loosing people to cheaper prices at Cinemark/Century in SF they will lower and adjust their single ticket prices. Many of us don't want to spend a monthly fee as there are not that many good movies playing these days and they keep the good movies for months.

Posted by Harold Hallikainen (Member # 5405) on 07-19-2018, 10:09 AM:

What service do you get for the $1.50 to $2.00?

Posted by Terry Monohan (Member # 8285) on 07-19-2018, 12:39 PM:

Just like rock and music live shows movie theatres are now adding a service fee when you buy movie tickets on line. Some circuits charge more then others. I think AMC does not let you use their monthly movie pass for any AMC IMAX or Dolby Cinema/Vision auditoriums. It's a wonder they don't include 3D also. We mostly try to see new movies in the best large format theatres in the SF Bay Area. Will just do a box office walk up and save the online service fee. Who gets this service fee? Is it the people handling the cc/ money transfer or the AMC people?

Posted by Mike Blakesley (Member # 26) on 07-19-2018, 01:10 PM:

We don't sell individual tickets online, but we do sell gift cards, with a one-dollar service fee per online order. That fee gets you my time in packing up the order to mail it, plus the cost of the envelope, a friendly "thanks for your purchase letter" and the cost of stamps. Not a bad deal, I think.

Posted by Lyle Romer (Member # 1266) on 07-20-2018, 05:09 AM:

quote: Harold Hallikainen
What service do you get for the $1.50 to $2.00?

It's probably to offset the cost of either a 3rd party that actually administers the online sales or to pay the software licensing for their online sales system.

The regular POS cost is built into the ticket price since everybody who buys a ticket via any means interacts with the POS. Only some people use the online option so they offset the cost.

If a 3rd party handles the online sales, it would likely be a per ticket sale agreement for compensation.

As far as subscription services, the biggest benefit would be to bring customers in during normally "dead" times. If I was a chain like AMC, I'd have 2 price points. One for the existing program and a lower cost program that can only be used for Mon-Thurs shows (excluding holidays). They could even go a step farther and offer an even lower tier that only works for shows before 6PM Mon-Thurs.

Posted by Martin Brooks (Member # 1269) on 07-26-2018, 01:50 AM:

quote: Terry Monohan
I think AMC does not let you use their monthly movie pass for any AMC IMAX or Dolby Cinema/Vision auditoriums.

Yes, they do - that's one of the advantages of their program. It's good for 3D as well.

quote:
AMC Stubs A-List is our newest and best tier in the AMC Stubs loyalty program! See up to 3 movies every week including all our premium formats such as IMAX® at AMC®, Dolby Cinema®, PRIME at AMC®, RealD® 3D, BigD® and D-Box at any of our U.S locations. Members can make advance reservations online and via the AMC app for free. Not only that, AMC Stubs A-List members also receive benefits of AMC Stubs Premiere complimentary.

and

quote:
AMC Stubs A-List members never pay online ticketing fees!

Posted by Steve Kraus (Member # 476) on 07-30-2018, 12:41 AM:

It's probably a big secret but does anyone have any idea how AMC will account for their pass users with the studios insofar as rentals are calculated?

Posted by Marcel Birgelen (Member # 6801) on 07-30-2018, 01:45 AM:

In order for them to account differently for "subscription subscribers", they would need specific provisions in their master agreements with the studios. I'm pretty sure they don't have those. The studios willing to give up some of their own? I really doubt so.

I can't speak for AMC, but flat-fee subscription services have been available around here for a while now, many chains of variable sizes offer them. Their base-prices are usually in the range of two adult tickets per month. Most of those subscriptions also allow for rebates on concessions, somewhere between 10 and 25%, depending on the "tier". The basic "tier" usually doesn't include extras like 3D or "PLF".

The theaters account for fulfilled reservations as normal ticket sales. Depending on your running costs, your subscriber will be profitable if he visits your theaters no more than 2 or 3 times a month on average or he/she needs to offset it by buying much more of your concessions.

In the end, the model seems to be profitable, although they sell most of those subscriptions to the group of people that are most likely to "abuse" it: students.

The biggest advantage of having a solid subscription base is that it generates a form of reliable cash flow and you also receive this money up-front, which is also worth a lot.

Posted by Bobby Henderson (Member # 840) on 07-30-2018, 08:46 AM:

quote: Steve Kraus
It's probably a big secret but does anyone have any idea how AMC will account for their pass users with the studios insofar as rentals are calculated?

I imagine it won't be difficult at all. If Stubs A-List works anything like the regular Stubs Premiere service customers will get their account number scanned every time they see a movie. I have a QR code in my phone to display my account number. You need that to take advantage of the "cut in front of everyone in line" service. [evil]

Many theaters are going to reserved seating and lots of people order their tickets online in advance anyway. If you buy tickets online you can show the ticket taker a QR code on your phone and skip the line at the box office and/or concession stand. Stubs A-List may work the same way. You'll just have a zero balance for ticket costs. But you'll likely still be forking over some cash for concessions. Everybody has to have that porcorn.

Although I could see customers trying, I don't think AMC would simply let Stubs A-List customers just walk into the theater and go directly into the auditoriums without any ticket stubs or hop from one movie to the other.

Posted by Steve Kraus (Member # 476) on 07-30-2018, 11:29 AM:

The question was not how the customer is handled but how AMC will account for Stubs A-List patrons when it comes time to figure gross and film rental. The studios will likely insist that the gross be based on that person having purchased a ticket at the price normally charged for that showtime and then figure rental based on that. While not as lossy as MP paying theatres full price it still doesn't take too many visits to put them in the red.

Posted by Mike Blakesley (Member # 26) on 07-30-2018, 12:20 PM:

quote: Steve Kraus
The studios will likely insist that the gross be based on that person having purchased a ticket at the price normally charged for that showtime and then figure rental based on that.

Agreed, considering that's how they do it with free passes. I think most contracts allow a certain small percentage of actual free admissions, but if you go over that number (2% or something similar) then you have to pay full rental as if a ticket was purchased. I can't imagine them wanting to give any of that up.

Maybe AMC has worked out a deal where they pay on the entire gross and take an average admission price.... or maybe they pay the studios an amount based on each subscription-type ticket sold, independent of normally-sold tickets.

Posted by Marcel Birgelen (Member # 6801) on 07-30-2018, 12:22 PM:

quote: Steve Kraus
The studios will likely insist that the gross be based on that person having purchased a ticket at the price normally charged for that showtime and then figure rental based on that.

Like I said... they're simply counted as normal ticket sales. At least that's how it works for every single one of those services in Europe. I doubt AMC will get any special treatment.

Posted by Bobby Henderson (Member # 840) on 07-30-2018, 01:24 PM:

As big a chain as AMC is now I wouldn't be surprised if the studios did work out some special agreement with them.

Posted by Marcel Birgelen (Member # 6801) on 07-30-2018, 02:17 PM:

We'll never know, because they will not tell us and they're certainly under a mutual NDA regarding their contracts with the studios.

But, I highly doubt it. They, as in the studios, don't bow for big chains in Europe and they're certainly not giving you anything for free if they don't need to: "You want to offer a flat-fee subscription? That's fine with us, as long as you give us our cut and account for every patron like a normal patron and you figure out how to make it work..."

It's like the meat supplier to your all-you-can-eat buffet doesn't care if you offer flat-fee steaks to your guests, as long as you simply pay every pound you buy from them. Why should they sell it to you at a lower rate?

AMC has an advantage when it comes down to "all you can see" subscriptions: that's their massive size and potentially large subscriber base. It's easier for them to stomach more "abusive usage", because they can spread the "damage" better. Also, because of their reach, their product will be potentially more valuable than a subscription from some smaller local player.

Posted by Philip Jones (Member # 6677) on 07-30-2018, 04:11 PM:

The Cineworld Unlimited Card in the UK certainly used to go through cheaper than a normal ticket.

Going back about 10 year it used to come up at about £3.50 on the till when ticket prices were an average of about £5.50

Posted by Marcel Birgelen (Member # 6801) on 07-31-2018, 08:38 AM:

quote: Philip Jones
The Cineworld Unlimited Card in the UK certainly used to go through cheaper than a normal ticket.

Going back about 10 year it used to come up at about £3.50 on the till when ticket prices were an average of about £5.50

Maybe it's some internal accounting between the franchise and the holder, but somehow it feels counter-intuitive to give out a sales receipt when the sale has already been made in the form of a subscription. You're going to end up paying taxes on it twice...

Posted by Steve Kraus (Member # 476) on 08-03-2018, 11:22 PM:

AMC Stubs A-List does not cost $19.95 as discussed. It's actually $21.05 per month because they tack on a $1.10 tax charge. What tax is that? Who would they be remitting to? Or is this a scam?

Posted by Martin Brooks (Member # 1269) on 08-07-2018, 01:01 AM:

It's not a scam, it's local sales tax. In your case, it looks like it's 5.5%. AMC doesn't charge it (as the old saying goes), they just collect it. If you're upset about it, go see 2 more movies a year and it will more than make up for it.

Posted by Frank Angel (Member # 248) on 08-07-2018, 09:54 PM:

We saw the advantage of a subscription service way back in 1995 when we offered our Movies, Movies, Movies, Club Discounts. Patrons bought voucher books of 10 vouchers at $2 off full ticket price. To make it work, we realized it couldn't been seen as something restrictive, so we made it so the buyer could use those 10 vouchers any way they liked -- see ten films any time they wanted or take 10 people to 1 film or any variation of their choice. The voucher was presented at the boxoffice and it redeemed a ticket at the Club price. The vouchers were good for a year. The voucher book also contained coupons for 2 free medium popcorns and 2 medium free sodas. The incentive for the patron was the obvious $$ discount with few restrictions; for us, it fulfilled our mission to encourage more people to see great films.

What we discovered was, as much as our mission was to present the best critically acclaimed, many times off-beat gems...a mix of foreign, independent and under-marketed and overlooked but exceptional titles by the multiplexes, it turned out that for every voucher a patron didn't use to buy a ticket, at the end of the year, we had that money and the studio didn't. When a voucher was used to redeem a ticket, the studio got their 35% to 55%; when a voucher expired unused, we got to keep the full ticket price. As much as it was antithesis to our mission to get more people to see good cinema, you couldn't help wishing more of them wouldn't use all their vouchers!

Posted by Mike Blakesley (Member # 26) on 08-07-2018, 10:42 PM:

That's why it's a great idea to do a gift card program. I'm not going to say how much $$ we have floating around in the "giftcardverse," but let's just say it's a surprising amount of money. A lot of $25 or $50 or even a couple $100 cards are sitting in desk drawers or on top of dressers, unused.

Posted by Frank Cox (Member # 6258) on 08-08-2018, 12:29 AM:

Several years ago, the government here made it illegal for gift cards and similar things that are paid for to expire. So if someone purchases a $10 gift certificate that certificate can't have any expiry date.

If you give someone a $10 gift certificate free of charge, that can expire. But not one that's paid for.

Posted by Steve Kraus (Member # 476) on 08-08-2018, 09:32 AM:

Sales tax in Chicago is not 5.5% and we don't have a tax on services. Taxes on movie admissions would vary town to town. Also, I don't live in Chicago.

Martin, please do me a favor and look at AMC's site as though you were going to subscribe. I would like to know if the so-called tax is the same in there as here.

Posted by Martin McCaffery (Member # 37) on 08-08-2018, 10:55 AM:

Different Martin, but the AMC site does say "Join AMC Stubs A-List & see up to 3 movies every week for $19.95/mo (+tax). Learn More"

I didn't try to sign up, but if it is like other online sites that charge tax, they only charge the State tax, not the City and County taxes, which may be why your tax seems odd.

Or they could have just screwed up.

Posted by Steve Kraus (Member # 476) on 08-08-2018, 11:22 AM:

You might be on to something as I just filled it out as though I lived in DE where there is no state sales tax and indeed it was zero. But pretty sure our Illinois sales tax does not apply.

Posted by Frank Cox (Member # 6258) on 08-08-2018, 12:18 PM:

Maybe it's just set up with your area in the wrong category.

There are so many sales tax jurisdictions in the US that I can see where it would be almost impossible to get it 100% right 100% of the time, especially when you're just the guy in the central office somewhere who relies on notifications from the local managers when and if something changes in that regard.

Posted by Mike Blakesley (Member # 26) on 08-08-2018, 12:30 PM:

quote: Frank Cox
Several years ago, the government here made it illegal for gift cards and similar things that are paid for to expire. So if someone purchases a $10 gift certificate that certificate can't have any expiry date.

Right... there's a similar law in the U.S. (I'm not sure if it's state or federal.) Anyway, ours never expire. The computer keeps track of them. I've had people come in with cards all beat up, saying "We found this behind the dresser when we moved...is it still good?" As long as we can read the number on the back of the card, no problem.

Posted by Adam Martin (Member # 641) on 08-08-2018, 01:05 PM:

Taxes are insane. I've had to set up POS tax tables where every item was taxed differently. What percentage of the item is wheat or corn product? Is the item served hot? Is the item carbonated? I remember Iowa being particularly complicated.

All the larger chains will have one or more persons who handle nothing but taxes, and often will also employ a consulting firm or tax-specific lawyers to advise how to deal with the craziness over all of the jurisdictions.

Posted by Harold Hallikainen (Member # 5405) on 08-08-2018, 05:08 PM:

On never expiring gift cards, are they shown as a liability on the books until they are used? ie

Gift Card Sale
Cash in Bank $10
Gift Card Liab $10

Gift Card Use
Gift Card Liab $10
Ticket Sale Income $10

On sales tax, they ARE complicated! There are different rates on different products, then there are local rates (city and county), then state rates. It's a lot to keep track of! I had thought that there was sales tax on "tangible personal property." Admission to a movie does not seem to fit that category. I guess the ticket is "tangible." And with the recent supreme court ruling, collection of sales tax on interstate sales is now required. FUN!

Harold

Posted by Mike Blakesley (Member # 26) on 08-08-2018, 05:39 PM:

Well I don't know how anybody else does it, but here, we're taxed on the income when we get it, but that's where it ends.

To be honest I've never checked with my accountant on this, but any "redeemed" gift cards are just subtracted from our expected "cash" at the end of each day, so it all balances out.

We don't have sales tax here so we don't need to worry about that angle.

Posted by Marcel Birgelen (Member # 6801) on 08-08-2018, 06:28 PM:

It obviously depends on your local jurisdiction, but general accounting rules regarding gift cards that represent a monetary value imply, that you don't have to pay sales tax or VAT on it, until those get redeemed. Technically, it's not even a sale, there is no revenue (yet), unless you charge a "service fee", in that case the service fee is revenue and subject to normal taxation. A gift card or voucher is merely a promise to deliver goods and/or services in the future.

Also, technically, any gift card should end up on your ledger as "Short-term debt", because the debt can be potentially claimed at any time, even though some of those gift cards/vouchers might never be redeemed.

Regarding expiry dates on vouchers, there seem to be lots of differences between jurisdictions and often the legal status is pretty much in limbo. I think, there should be a possibility to expire gift cards/vouchers after a reasonable amount of time, like 5 years, even if it's just to keep the short term debt on your balance from accumulating.

quote: Mike Blakesley
Well I don't know how anybody else does it, but here, we're taxed on the income when we get it, but that's where it ends.

In most acceptable accounting schemes, you're taxed as soon as you write the invoice or receipt, even though you might not have seen any money yet. Luckily, in "consumer retail" this usually matches up with when he/she gets the goods or services. This might obviously not be true for most electronic payments.

Posted by Steve Kraus (Member # 476) on 08-11-2018, 04:02 PM:

I had tweeted my question to AMC which they ignored so I wrote them off the web page. An automatic response said I'd hear back in a day or so. A week went by with nothing so I replied to the automatic response and they wrote and said "This concern our department is unable to handle." I have replied please refer me to the person who can answer my question.

I also have an inquiry out to the Illinois Department of Revenue asking if there is a state sales tax (or ANY state tax) on movie tickets.

Posted by Harold Hallikainen (Member # 5405) on 08-11-2018, 05:46 PM:

On when to recognize gift card income, I agree with Marcel. The difference is whether you are using cash or accrual accounting. In the US, if you have an inventory, you are required to use accrual (but this does not really apply to the exhibition industry). I really like accrual because I believe it's more accurate. So, as posted before, the "sale" of a gift card results in a debit to cash and a credit to Gift Card Liability. The redemption of the gift card is the actual "sale" that results to a debit to Gift Card Liability and a credit to Movie Admissions Income. Magazines and other subscriptions use this same accounting. When you buy the subscription for future delivery of magazines, they debit cash and credit a liability since they now owe you magazines. As they deliver them, they recognize the sale. I do a similar thing for a dance festival ( http://www.cccds.org/ContraCarnivale/ ) where I am the treasurer. As people prepay admissions our cash asset and prepaid admissions liability increase. When we "deliver" the dance, we credit income and debit the prepaid admissions liability to recognize the income.

The issue of gift cards never being redeemed is interesting. I wonder if this can be considered "unclaimed property" as described at https://en.wikipedia.org/wiki/Lost,_mislaid,_and_abandoned_property#Abandoned_property . I've claimed a few dollars from savings accounts from when I was a kid, a telephone company deposit, and things like that. A quick (very non-exhaustive) search indicates that some states treat expired gift cards as abandoned or unclaimed property while some do not ( https://www.creditcards.com/credit-card-news/unclaimed-gift-card-money-1271.php ). So, those issuing gift cards may want to check into what their state requires!

Harold