Can I Have a Large Popcorn... and a Movie Subscription?

by Brett Sappington | Jun. 5, 2019

Whoever told you that consumers are becoming exhausted over all of their entertainment subscriptions, just push them gently back under their cold, quiet rock of wrong conclusions… at least for now.

Yes, pay-TV subscription numbers are declining, even with vMVPD (online pay-TV) services working to stem that growing tide. Yes, penetration of Netflix and Amazon are reaching ludicrous levels, rivaling penetration of toasters. Also, the logic seems sound—eventually people’s pocketbooks (or credit lines) will tire from all of the monthly taps on their cards. After all, how much entertainment can one person consume? Apparently, the answer is: a whole lot… way more than seems logical.

While the focus has been on the growth of subscription OTT services like HBO Now, YouTube TV, Hulu, and ESPN+, AMC Theaters recently announced that it has reached 785,000 subscribers to its A-List subscription service—enough to have been one of the top 20 subscription OTT video services at the end of 2018, according to Parks Associates' OTT Video Market Tracker. The service allows members to watch three movies each week (in an AMC theater, of course) for a monthly fee of $19.95. That price is higher than HBO Now, but lower than Sling TV.

The movie theater portion of the entertainment industry has been grasping for ways to remain relevant and profitable in the current environment of streamed consumption and subscription services. AMC and others have added plush recliners, reserved seating, alcohol (bless them), premium foods, and to-your-seat food delivery in order to improve the experience and revenue generated. According to AMC, subscriptions not only bring members back to the theater, but subscribers also bring non-subscribers with them—often at full ticket price. It doesn’t take many large popcorns among this crowd to make the subscription program a big, big winner.

AMC’s success stands in stark contrast to the mess that is MoviePass. While MoviePass was ultimately a financial fiasco, the company did prove that consumers were willing to pay for subscriptions.

Does AMC’s success mean that consumers will continue to pack on subscriptions? By itself, no. However, it does show that consumers largely evaluate each subscription on its own merit, assessing the value of the service (or content) compared to what they pay. When that perceived value drops below what is being paid… that’s when cancellation happens. So, how many entertainment subscriptions will consumers take at one time? As many as they think are valuable to them.

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Tags: online video, OTT

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