AMC Theatres Charging for Good Seats Isn’t Like an Airline; It’s More Like a Gym Membership

AMC Theatres looks like it decided to take a page from United Airlines, where AMC CEO Adam Aron was once a marketing executive: With the launch of its Sightline program to charge a little extra to reserve the best seats in the house, the world’s largest theater chain makes money on what users once had for free. What’s really going on is a lot more like LA Fitness: Create a revenue stream based on driving users to a membership that they’ll use less than they think.

Dynamic pricing is already part of moviegoing: In the U.S. it’s utilized for matinees, active military members, and people who are under 12 or over 60. Anyone who went to see “Avatar: The Way of Water” on IMAX proved they’re willing to spend more to get the best viewing experience. In international markets, premium-price seating has been the norm for years. And just this past weekend, major theater chains experimented with offering “80 for Brady” tickets at matinee pricing all weekend.

However, backlash on Monday had people calling out AMC for making moviegoing “more complicated and unpleasant,” of “antagonizing and gouging” patrons, and saying “AMC hates you.” AMC faced similar outrage this time a year ago when people discovered that the world’s biggest theater chain tinkered with surge pricing for “The Batman.”

Speaking to analysts and industry experts in the distribution and exhibition space, it’s clear that AMC’s Sightline program is not meant to add value like a first-class ticket (bigger seats, free drinks) or even “premium economy” (leg room, earlier access, better odds of overhead storage). Sightline also doesn’t get you a concessions discount, a plushy recliner, or let you avoid a large-format upcharge: It only raises prices for those already inclined to reserve seats early for the latest blockbuster.

What Sightline does do is increase the appeal of its loyalty programs AMC Stubs and A-List. You can waive those good-seat fees if you’re a member of AMC Stubs A-List (along with the waived online reservation fees, concession upgrades, and rewards points available for $19.95-$24.95 per month) or unlock discounted “Value Sightline” for AMC Insider members (that’s free). Back in pre-pandemic 2019, AMC rapidly amassed over 900,000 subscribers to A-List and even 50 million people taking advantage of the free tier Stubs perks.

“There are many clever ways to optimize ticket pricing that not only drive more revenue for the theaters, but drive attendance with reduced ticket pricing,” Alicia Reese, VP, Equity Research with Wedbush, told IndieWire. “Adam Aron has long been a proponent of loyalty programs and tiered seating, having come from the airline industry. I agree that AMC is trying to increase its customer retention and direct communication with its moviegoers, and the best way to accomplish that is to promote AMC’s loyalty program and provide great perks to its members. The Sightline pricing achieves that goal by incentivizing moviegoers to become Stubs members.”

While Film Twitter didn’t like it, Wall Street did. Shares in AMC closed at $6.80 on Monday, up 11.8 percent, and even AMC’s preferred equity units, or APE stock, were up 5.5 percent and closed at $3.16. Reese felt the Sightline feature is a good added perk for many in AMC’s investor base, many of whom are also Stubs members, and that it almost certainly nudged shares in AMC higher on Monday.

Added fees, which start February 1o, amount to an extra $1-$2 per ticket, depending on the theater. If you’re at Lincoln Center in New York City, it’s $2; in some places in Kansas City, it’s a buck. The new pricing tiers will roll out nationwide throughout the year, but will apply only to those AMC locations with reserved seating. (Most of AMC’s 10,500 screens nationwide don’t have it.) How AMC can police the Sightlines policy for those who book a cheaper seat and attempt to relocate to a better, open one remains to be seen (roped-off sections? different signage? colored seats?).

AMC had no comment.

Nicole Kidman for AMC Theaters

Screenshot: AMC

One exhibitor who spoke to IndieWire said Sightline struck them as short-term thinking to drive subscriber growth that does little else to drive business. An indie distributor lamented that it’s a “fragile moment” to squeeze more money out of consumers when audiences are finally showing signs of coming back to theaters for anything that isn’t “Top Gun: Maverick.”

However, a studio distributor wrote off Sightline’s front-row discount as a “non-entity”: They’re seats that theater managers don’t bother selling if they can avoid the headache of customers later complaining about the terrible view. For opening-weekend blockbusters in IMAX theaters — a prime setting for audiences who crave the best seats — the studio distributor said that, based on their own data, many of those screenings are already dominated by A-List members.

“It’s as much about PR: Do customers who go to those theaters feel like they’re getting gouged… or are they willing to pay a premium to sit in the very best seats?” the distributor posed. “The only thing AMC needs to be concerned about is, will it be used against you by their competitors?”

Or, maybe they’ll decide it’s a bandwagon. Studios share in the Sightline fees, and while an A-List member gets three “free” tickets a month, the studio gets the same fixed fee as if it were full price. For AMC, the loyalty program is a little like your gym membership: It makes more money if you don’t take full advantage of it.

The indie distributor said AMC is betting that the furor will pass and, like everything else about the movie theater, people will get used to it: “If people don’t revolt over it, and I think there’s a 50-50 chance they will by the end of the week, everyone’s going to jump on it where they can.”