MARY LOUISE KELLY, HOST:
AMC Theatres began a movie watching subscription service this week called Stubs A-List. You pay $19.95 a month, and you can see up to three movies a week at any AMC theater. Now, this is a move to compete with a service called MoviePass. Our friends at the NPR podcast The Indicator recently dug into its business model.
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CARDIFF GARCIA, BYLINE: In a world where a movie ticket costs $15 and a small soda costs $9 and popcorn costs $15, somehow your spontaneous after-work trip to the movies has cost you $70.
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GARCIA: A hero with a really weird business model will rise to save people from this outrageous price.
KELLY: Stacey Vanek Smith, one of the hosts of The Indicator, has been talking with NPR pop culture correspondent Linda Holmes about these competing movie theater subscription services.
LINDA HOLMES, BYLINE: Hi, Stacey.
STACEY VANEK SMITH, BYLINE: Hi, Linda.
HOLMES: So the way that MoviePass works is it works at a lot of different theater chains, right?
VANEK SMITH: Yeah. About 90 percent of the theaters in the country, they say. And what you do is you buy your movie ticket through MoviePass. MoviePass the service will pay full price for the tickets, but then they will give them to you for free. You will pay a $10 a month subscription to MoviePass, and you can see a movie every day all month.
HOLMES: And the AMC thing has both fewer movies - three a week as opposed to one a day all month - and it costs more. I question whether people really are going to see so many movies that three a week versus, you know, one a day is going to be a big difference in the value proposition.
VANEK SMITH: I think that's what AMC is counting on, that and the fact that its business model just seems a little bit more sustainable. AMC thinks it can break even on this plan by the end of next year, especially because it doesn't have to buy the tickets from another theater. It is just giving its own tickets away, so it takes much less of a hit on that. And people have been shown to buy more concessions when they are paying less for tickets, so it will benefit on that side.
HOLMES: Yeah.
VANEK SMITH: And I think you're right. I mean, I think the number of people who are going to want to see more than three movies a week is limited. Although as you point out, I mean, it is twice as expensive, and you can only see movies at AMC theaters.
HOLMES: So some of this may depend on whether your local theater that you love to go to is an AMC theater or some other chain. And it may depend on whether you like to go to big movies that tend to play in multiplexes, which is what a lot of AMC theaters are, or whether you really like to see, like, smaller independent movies.
VANEK SMITH: I think that's true. I think the big question with MoviePass is and honestly has been since last year when they cut their price down from about $40 a month, what it used to be when it had 20,000 members, to $10 a month, which it is now - they have 3 million members. That is a really hard business model to sustain. I talked with the CEO, Mitch Lowe. He told me that they are losing $21 million a month.
HOLMES: That's a lot of money.
VANEK SMITH: That's a lot of money.
HOLMES: Well - and they don't have the ability - right? - to make it up in popcorn, which AMC does.
VANEK SMITH: Exactly. I mean, they have a business plan which is really interesting. They have so many members, and they have all this really great data on them, right? I mean, they know where you're going to be. They know what time you're going to get out. They've been partnering with car services and child care services and restaurants. So, you know, they know you're going to get out of a movie at 9 p.m. and maybe want a snack, and they can offer you a coupon for the place across the street.
I mean, that is undeniably great data. Also, movie studios have been paying them to advertise their movies. But still, they're losing so much money that their parent company lost, you know, 98 percent of its stock value because investors are just not sure how this business model is sustainable. Its stock is now trading for, like, 25 cents. It's - you know, people have big questions.
HOLMES: Just drop the price of popcorn. That's all I ask.
VANEK SMITH: Oh - right (laughter)?
HOLMES: Right? Five dollars for the paper cup and straw. This is all I ask.
KELLY: Linda Holmes, host of Pop Culture Happy Hour, with Stacey Vanek Smith of The Indicator talking there about movie theater subscription services. Transcript provided by NPR, Copyright NPR.
