AMC Theaters Bucks Against Near-Term VoD Releases

Can't say it's surprising, but theater owners are getting ready for a battle when it comes to Video-on-Demand. For years now, movie theaters, movie makers, and DVD resellers have been growing increasingly wary over VoD. Why? Because the window of time between a cinema release and a VoD release has been shrinking, and all the while, movie ticket prices have been skyrocketing. It's nothing to spend over $15 per movie ticket in a major city these days, which is comical when you think that these tickets were far, far cheaper just a decade ago. What's changed? Technology, and instead of embracing it, movie theaters have pumped up ticket prices, kept popcorn prices laughably high, and resisted the move to digital distribution.

We really think it's a silly fight to pick. The advent of Hulu and video-on-demand is proof that viewing habits are changing, and getting bitter about it won't help to win the war. At this point, it's either adapt or be killed, but AMC Theaters in particular isn't ready to bend over. Recently, there have been reports that select movies will hit VoD systems two months after their theatrical release, albeit for a whopping $30. With places like Netflix and Redbox providing far cheaper rates for waiting just a bit longer, we doubt too many consumers would jump at that option. But even still, AMC thinks that people will, and that it could up-end the movie industry. They have just issued a vicious press release suggesting that these scenarios could threaten the health of their business.

It's hard to say how this will all shake out. It's likely that movie theaters want a larger revenue split from movies that hit VoD sooner, and they'll also want to know which movies are on the 60-day release schedule for scheduling purposes in their cinemas. The argument is that movie theaters are investing millions in IMAX, 3D and digital projection systems, only to be undercut by quick-release VoD purchased at home. You know what we say? Tough. Give the content to the people, and let them determine how they prefer to watch. If they aren't willing to wait 2 months, let 'em hit the cinemas. Maybe we're off base, but this just feels like whining to us.

AMC Theatres®: Company Statement Regarding Premium Video-On-Demand

We at AMC feel movie theatres are a critically important business to many parties: the 200+ million guests we host year after year who choose to view films on the large screen; the communities of which our theatres are an integral part; the artists who create the movies we show; and ultimately the entertainment industry for which our theatres generate the highest quality source of revenue.

We believe the theatrical experience has a bright future, and we are aggressively investing to prepare for it. We are in the midst of a multi-year, multi-million dollar rollout of digital projection and 3D, IMAX and our own proprietary ETX format. We are also introducing a new guest rewards program, better-for-you items, enhanced food and beverage offerings, dine-in theatre options and alternative, engaging programming for our guests to enjoy in our comfortable, state-of-the-art auditoriums. All activities we are currently engaged in have common goals - to increase attendance at our theatres and maintain the health of our industry.

The p-VoD world as currently defined threatens that health. As such, we have notified studios of our expectations regarding economic arrangements on movies that go p-VoD. It is not wise to discuss details in the press, and Company policy precludes it, but as these windows shrink and threaten our industry's future, it is only logical to expect AMC to adapt its economic model.

The future is bright, even as it promises to be different, and we look forward to the success that lies ahead for all parties.
Tags:  cinema, VOD, amc, theater