America's second biggest cinema chain is going upscale. It's about time.
Photo: Ariel Skelley/Blend Images/Corbis
On the heels of a lackluster July 4 weekend at the box office, America’s second largest movie theater chain has announced its intention to spend $600 million over the next five years refurbishing its cinemas. AMC Entertainment intends to replace it’s 44-inch seats with plush recliners, reducing seating capacity in its theaters by as much as 70 percent and fundamentally changing the nature of the experience being sold. AMC is publicly admitting what industry watchers and cinephiles have known for a while: The era of cheap popcorn and cheap seats is over. The only question now is whether the company is going far enough to keep movie theaters from going the way of the drive-in.
Box office receipts are – more often than not – used to measure the relative success of commercial films, but zoom out far enough and the numbers offer a bleak commentary on an industry. American movie theaters sold fewer tickets last year than in 2012 while making less than one percent more and failing to recover from the “adjustment” that took place in 2010 and 2011. That said, $10,923,600,000 is not a small number even if actual theaters only keep the “House Nut” (approximately 30 percent on opening weekend and more further from the release date). And cinemas aren’t actually in the ticket business anyway. Concessions are where the money’s at. Let’s modify that: Concessions are where the money’s at when people show up.
In short, Netflix and HBO destroyed Blockbuster LLC but not blockbusters more generally. To the contrary, addictive, binge-able, character-driven dramas have created a new generation of bankable stars without distracting from Hollywood spectacles. Game of Thrones is a great show to watch in your living room (or bed) precisely because it offers something no one wants in a movie, an extremely slow burn. Marvel, Scorsese, and Michael Bay spectacles, on the other hand, are best appreciated for what they are – very expensive and very big – on very expensive and very big screens. But that’s not enough. If higher resolution is all that cinemas have to offer, they might as well double down and start manufacturing medium format silver halide film.
In order to survive, movie theater chains need to sell an experience, which is almost precisely what they’re worst at. Yes, having your feet stick to a corn-syrup and stained carpet floor while watching incessant pre-show advertising is an experience, but it’s a miserable one. Men don’t want to take women to see a show anymore. Why would they? There’s no romance in it.
Fortunately, AMC and Regal Entertainment Group, the country’s largest chain, don’t have to look far for inspiration. Robert Redford got the memo about theaters a decade ago and has since opened Sundance Cinemas in San Francisco, Seattle, Madison, Houston, and Los Angeles. Sundance Theaters feature comfy seats with double-wide wooden armrests and offer drinks at shows specifically designed for adult viewers. Alamo Drafthouse, a boutique chain that serves theatergoers gourmet food, offers similar amenities. This isn’t particularly complicated stuff, but it makes a difference. Hopefully AMC will follow Bob’s lead and make seeing a movie feel like a luxury rather than something to do when nothing else appeals.
Fortunately, AMC is run being run by a savvy man. The chain is owned by the Dalian Wanda Group Company, which is in turn owned by Wang Jianlin, the richest man in China. Last year, Jianlin publicly stated his plan to invest $10 billion in non-Chinese companies, including a British yacht manufacturer that makes boats prominently featured in James Bond films. If he has his way, the movie theater industry will never be the same. If he doesn’t, we’ll be watching at home.
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