Because just what's needed now is yet another video streaming service, movie theater operator AMC Entertainment (AMC 0.43%) announced that it, too, is launching its own on-demand channel.
Called AMC Theaters On Demand, the video service lets viewers watch around 2,000 movies for prices ranging between $2 and $20 depending upon whether they're rented or bought, and no subscription is required. Although a parade of streaming services from other providers will be going live over the next few months -- including Disney's Disney+, which kicks off in less than a month -- AMC's version just might have a better chance of success than some of the others.
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A star-studded cast
To start watching movies on AMC Theaters On Demand, users need to create an AMC Stubs account, the theater operator's free loyalty program that lets members earn 20 points for every $1 spent on eligible purchases, including the new on-demand movies.
The movies are available across all Mac and Android devices, LG smart TVs, and Roku streaming boxes. You can link up to five devices to your account.
AMC said it had partnered with every major movie studio to gain access to their catalog of movies as well as their new releases. Many of these studios have their own video streaming services set to launch soon. Apple is launching Apple TV+ on Nov. 1; AT&T is currently trialing AT&T TV in 10 markets but will roll it out nationally in early 2020; Comcast's Peacock debuts next April; and Viacom, which recently agreed to acquire CBS, will jointly have a multitude of services, including Pluto TV, Showtime, and the recently announced BET+, a subscription service from both BET Networks and Tyler Perry Studios.
Viacom also owns Lionsgate Films and Paramount Pictures, and AMC said that if the first rental or purchase someone makes is from either of these studios, they can select an additional three movies from their libraries.
Scratching each other's backs
While the streaming video wars are seeing ever more combatants enter the fray -- heck, even the Food Network is launching a streaming service -- not all will be successful, as surveys indicate people are only willing to subscribe to two or three at most. AMC Entertainment's on-demand offering, however, is likely to be one of the big winners.
First, it has broad studio backing. Like Netflix (NFLX +1.53%) was in the beginning, it's agnostic on where its content comes from, but unlike the streaming giant, AMC is not trying to undermine the movie studios.
With 659 theaters in the U.S. and around 1,000 worldwide representing some 11,000 screens, AMC relies every bit as much on movie lovers actually going to the movies instead of sitting at home watching video on TV. That means it has just as much of a vested interest in keeping the studios profitable as they do themselves.
In contrast, Netflix helped contribute to the decline of people going to the theater by making at-home movie viewing so easy. Studios finally began pulling their content from the streamer to launch their own services, forcing Netflix to spend tens of billions of dollars to come up with original content. Although Netflix continues to add subscribers, the quality of its programming has arguably deteriorated a lot over time.
Part of the in crowd
AMC will also benefit because its service is not a subscription but rather is based on rentals and purchases. A viewer can have a Netflix subscription or an Amazon Prime Video subscription -- or both! -- and still rent or buy occasionally from AMC. Other similarly situated services, like Disney's Hulu, will likely do well too, despite the launch of Disney+, because it can be an add-on to whatever a subscriber already has.
While the overlap in studio content available on Netflix, Prime, Hulu, or wherever is fairly broad, AMC Entertainment is not trying to supplant existing streaming services, and that might be enough of a difference to make it a contender.
Moreover, because rentals and purchases accrue points toward use in AMC's theaters, AMC may generate enough additional revenue from concession stand sales to make this a very profitable venture.
