Please ensure Javascript is enabled for purposes of website accessibility

500,000 Reasons for MoviePass to Worry

By Rick Munarriz – Nov 5, 2018 at 6:15PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

AMC Stubs A-List has gone from zero to 500,000 members in a little more than four months. It's going to be hard for MoviePass and other third-party services to compete.

Good news for AMC Entertainment Holdings (AMC 3.28%) is bad news for MoviePass parent Helios and Matheson Analytics (HMNY). The country's largest multiplex operator announced on Monday that it now has more than 500,000 movie buffs signed up to AMC Stubs A-List, a movie subscription service that is raising the bar in ways that MoviePass can't feasibly match.

AMC Entertainment will also be raising the prices for new members, starting early next year, in 15 different states. A price hike would typically signal an opportunity for existing players, but this basically cements AMC Entertainment's commitment to the niche. It's here for keeps, and in the process it's cracking down on chatter that AMC Stubs A-List would be gone the moment that MoviePass or rival subscription service Sinemia go out of business. AMC Stubs A-List is now a permanent offering for the multiplex giant that once tagged subscription services as an industry nuisance; the disrupted is now the disruptor.

Reclining leather seats at AMC's Lake in the Hills multiplex

Image source: AMC Entertainment.

Reel deals

AMC Stubs A-List offers filmgoers the ability to see as many as three movies a week for $19.95 a month. MoviePass initially made waves last summer at half that price, allowing subscribers to see daily standard screenings at most theaters, but as it ran out of money to bankroll that financially unfeasible model it began to scale back on its offerings. MoviePass members can now only see three movies a month, and only a couple of movies if any are available on any single day.

AMC is making several announcements related to AMC Stubs A-List, and they're all daggers landing on MoviePass:

  • The minimum age to be an AMC Stubs A-List subscriber is going from 18 to 16.
  • Folks can now use a single credit card across multiple household accounts.
  • Customers signing up between now and Jan. 9, 2019 will be grandfathered into the original $19.95 a month rate for the first 12 months of membership.

Another clever move by AMC: It will start offering reserved seating across all of its theaters except the older AMC Classic locations. AMC Stubs A-List has always let its subscribers buy tickets to showings days ahead of time, unlike MoviePass, which can only be used to secure a ticket on the day of the movie. Adding reserved seating to all of its multiplex screens will make it that much harder for a MoviePass member to score prime seats for big movies.

It's the price increase that may be AMC's most creative retention tool. Boosting its monthly rate by 10% in Colorado, Delaware, Florida, Georgia, Illinois, Maryland, Minnesota, Pennsylvania, Virginia, Washington, and the District of Columbia early next year -- and by 20% in California, Connecticut, Massachusetts, New Jersey, and New York -- will incentivize film buffs to sign up sooner rather than later, to lock in the current price through the year ahead. The move also props up the perceived value of the moviegoing experience --something that MoviePass was certainly not doing.

Rick Munarriz has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.