AMC Cinemas Beefs Up Marketing With Dine-In, Bottomless PopcornBy
Wanda-controlled chain plans 3 brands, retires Carmike’s name
CEO says chain must share in revenue for earlier home releases
AMC Entertainment Holdings Inc., the theater chain controlled by China’s second-richest man, outlined a new marketing strategy following its takeover of Carmike Cinemas, saying it will create new brands like AMC Classic and AMC Dine-In and retire the acquired company’s name.
Adam Aron, chief executive officer of the world’s biggest cinema chain, also said on a earnings call Tuesday that AMC is weighing proposals from Hollywood studios that would let movie fans see new films at home sooner. Any deal involving AMC, controlled by Chinese billionaire Wang Jianlin, would include a share of the studios’ added revenue, he said.
Hollywood film companies and theaters are trying to adapt to the rise in digital distributors, such as Netflix, that have contributed to a drop in attendance. AMC, based in Leawood, Kansas, joins Regal Entertainment Group and Cinemark Holdings Inc., the No. 2 and No. 3 U.S. exhibitors, in publicly conceding they’re considering plans to reduce the 90 days of exclusivity they enjoy before new releases become available in homes.
“The reason we’re intrigued by all this is because, if this is done right and this is done intelligently and our revenue share is significant enough, we believe that we have the opportunity to grow and increase AMC revenues,” Aron said on the call.
The timing of any change remains unclear, with Aron saying he could see a deal in months or no progress at all.
“There are so many proposals floating around, people having different views,” Aron said. “A consensus is going to need to emerge for this not to be a one-company, one-studio deal, but more of an industrywide effort.”
AMC, controlled by Wang’s Dalian Wanda Group Co., has become the world’s biggest exhibitor after acquiring Carmike Cinemas, Odeon & UCI in the U.K. and most recently Nordic Cinema Group, a deal announced in January.
Aron said a new “AMC Classic” brand would be used for its smaller theaters and markets, and a third smaller brand called “AMC Dine-in” would be deployed at the about 60 locations with full kitchens and bars.
In the U.S., about 400 locations will be AMC theaters, with Imax Corp. and Dolby Laboratories Inc. providing the premium, large-format experiences. Classic theaters, which AMC describes as fun, friendly and local with value in mind, will account for about 200, according to a statement. The smaller theaters will have Coca-Cola Freestyle machines and refillable popcorn buckets.
AMC also reported fourth-quarter profit fell 20 percent to $33.2 million, or 33 cents a share, partly as a result of acquisition costs. Revenue grew 18 percent to $926.1 million. Earnings met the average of analysts’ estimates while sales exceeded the $919.6 million average projection.
AMC closed little changed at $31.35 in New York and has gained 35 percent in the past year.