AMC introduces new pricing elements starting on February 10, 2023 as it expands its variable pricing strategy from movies to seats. This insight explores the new scheme and whether the variable pricing strategy will work in today’s tough movie going landscape.
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Introduction – AMC’s New Varible Pricing
What works in one part of your business, won’t necessarily work for the whole. Last year, AMC tested variable pricing for high-demand movies like The Batman. This year they’re building off that test to introduce “Sightline”, a variable pricing model for all movies shown after 4:00 p.m. (except for Discount Tuesdays), charging $1 to $2 more for seats with a better line of vision to the screen. 40 movie theaters including those in New York City, Chicago, and Kansas City are participating in this launch. This is slightly less than 5% of its 950 owned worldwide properties.
At launch, how many AMC movie theaters will participate in the new Sightline variable pricing strategy:
This initiative will be rolled out nationwide to all domestic AMC and AMC-DINE locations before the end of 2023.
The New Sightline Program In Detail
Sightline is AMC’s way of using different variable pricing strategy on various seats. Instead of charging the same price for all the seats in the auditorium, select seats with better “sightline” will carry a higher price based on the day and time of the show.
There will be three types of Sightline categories as per AMC:
Standard Sightline – these seats are the most common in auditoriums and are available for the traditional cost of a ticket
Value Sightline – these seats are in the front row of the auditorium, as well as select ADA seats in each auditorium, and are available at a lower price than Standard Sightline seats. Value Sightline pricing is only available to AMC Stubs members, including the free tier membership – AMC Insider.
Preferred Sightline – these seats are typically in the middle of the auditorium and are priced at a slight premium to Standard Sightline seats. As an added benefit to AMC’s most loyal moviegoers, AMC Stubs A-List members may make reservations in the Preferred Sightline Section at no additional cost.
As noted, members of the AMC Stubs A-List loyalty program will not have to pay the upcharge for any of the seats. The program costs anywhere from US$19.95-24.95 per month depending on the state of residence. As a bonus, AMC Stubs free loyalty program‘s Insider members will have access to a $2 discount for the typically undesirable front row seats during ticket purchase.
How to join AMC’s A-List Program
Will This Variable Pricing Work?
Creating experiential tiers isn’t new – we are used to higher prices for better seats at plays or concerts. But these are live real-time experiences, so paying more to see performers up close has a value that is easily understood.
Movies are different. Between home theater systems and streaming platforms that rent films as they hit the box office, the reasons for going to a movie theater are waning. I rarely go out to a movie now unless it’s something really special that I want to experience with an audience and Dolby sound (like Top Gun!).
And I’m not alone. Even taking COVID out of the data, movie theater attendance has declined over 50% since 2018. According to Gallop, Americans averaged 4-5 movies per year between 2001 and 2007. Today that number is 1 to 2 per year. Variable pricing won’t replace lost revenue of this magnitude. Adding confusion and frustration at paying more for a seat in a half-empty theater will only motivate more people to watch at home.
Innovating Customer Experience At The Movie Theater
There is a place for movie theaters in our communities today, but the old business model won’t work when today’s streaming platforms continue to draw eyeballs elsewhere. A private cinema in my neighborhood streams football games, operas, and concerts with good results but they still rely primarily on box office hits and concession sales to drive revenue. As we deal with economic slowdowns, now is the time for theaters to explore radical reinvention as windows to a wider range of experiences and services to support communities. Upping the price to temporarily bandage an outdated business model is not the answer.