Check out the latest AMC Entertainment Holdings earnings call transcript.

It's not surprising that movie-ticket subscription programs have become very popular with theatergoers, who use them to see movies at a discount. The challenge for those offering the subscriptions is to do so without going bankrupt, and theater operator AMC Entertainment Holdings (NYSE:AMC) seems to have struck a good balance.

AMC is the world's largest theater operator and has some 661 theaters with over 8,200 screens in the U.S. The company recently reported that exactly six months after launching its AMC Stubs A-List subscription service, it has exceeded 600,000 members. That's somewhat remarkable because AMC was hoping to hit 500,000 members after a year or so, and surpassed that threshold in half the time:

Date

Membership Milestone

06/26/2018

AMC Stubs A-List Launched

07/31/2018

175,000

08/16/2018

260,000

09/26/2018

380,000

10/04/2018

400,000

12/26/2018

600,000

Data source: AMC Entertainment.

Although these numbers are much less than the millions of members Helios and Matheson Analytics (OTC:HMNY) attracted within weeks of launching its MoviePass unlimited-viewing offer in 2017, AMC also hasn't wrecked its financial standing, as Helios and Matheson has. Stubs A-List seems to be sustainable.

Use it or lose it

AMC Entertainment has a competitive edge over rival subscription services because it owns the theaters it's offering the tickets to. Whereas MoviePass and Sinemia, which also runs a subscription program, reimburse the theater operators the full price of the tickets their subscribers purchase, AMC is essentially paying itself. Its rivals risk financial ruin if their services become too popular and are used too much.

That's what destroyed MoviePass' owner. MoviePass allowed unlimited movies for $10 a month, meaning it was losing money as soon as a member saw more than one movie. It tried to negotiate for a percentage of a theater's revenue because it was driving more traffic, as well as a percentage of concession sales. But theaters were reluctant to share their already thin profits, and AMC refused to honor MoviePass.

Sinemia has minimized the impact by limiting the number of movies that can be seen in a month. Although its most popular plan is $9 for three movies a month, which still seems to be a money-loser, it bills the fee on an annual basis, undoubtedly hoping that -- like that gym membership you just signed up for as part of your New Year's resolution -- you'll stop going to the theater after the first month or so. Sinemia also offers $300 in Restaurant.com e-gift cards to subscribers.

Moviegoers wearing 3D glasses

Image source: Getty Images.

Success through limited availability

AMC Stubs A-List charges what seem like unrealistic prices for tickets. For just under $20 a month, you can see up to three movies a week. Like Sinemia, it bills you for the full year, but the difference with AMC's program is that you can only go to an AMC theater. 

Yet even AMC has realized what happens when your service is too successful, and it recently raised its prices in 15 cities where people were seeing the most movies.

Theater operator Cinemark Holdings (NYSE:CNK) has a similar plan, which is the simplest of all. Its Movie Club service offers one ticket a month for $9 (unused tickets never expire), and gives subscribers 20% discounts on concession purchases. Launched in December 2017, Movie Club hit 445,000 members and represents around 8% of Cinemark's box office receipts.

MoviePass has changed its plan many times over the past year; its latest subscription offers three movies per month for $14.95, which is more sustainable, though priced higher than previous iterations (it has a limited-time offer of three movies for $9.95 a month).

Record movie attendance

Basically, everyone is playing a numbers game. While Sinemia says today's moviegoers see three movies a month on average, the Motion Picture Association of America (MPAA) says they see at most four to six movies a year. Even MoviePass could break even or better if the MPAA average viewing pattern holds. 

AMC CEO Adam Aron credits the Stubs A-List program with boosting attendance at AMC's theaters. "There can be no doubt that A-List has contributed to the record box office in 2018," Aron recently said. In November, AMC released its third-quarter earnings report, showing an 8.6% jump in U.S. attendance.

Because AMC Entertainment isn't reimbursing another party for each movie ticket sold through A-List, it looks as if its plan can continue growing, while some of its competitors may not even see the end of this year.