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Posted June 2, 2011 by Guest Writer in Spicy News Reel
 
 

In Defense of AMC Stubs™ and The Theater in General

Editor’s Note: There have been some lengthy discussion on AMC’s change in rewards programs on an article posted about the change. Out of many of the commenters there, D.C. took it upon himself to provide not only an explanation into the positives behind the change but also to alert us on the drastic shape our beloved movie theaters are in. I think that what he said was very important and needed, so I have placed his explanation below in it’s entirety for your reading pleasure.

Click here to read the original commentary by D.C. and others.

Despite anyone’s views, movie chain revenue is down 15% across the board. With Netflix, Redbox, Movies ON DEMAND, inflation and DVD release windows becoming shorter, movie theaters are looking at possible termination. Over 70% of movie companies were forced to end within the last 10 years, leaving only the big chains ( Cinemark, AMC, and Regal to name a few) left to dust themselves off. This being said, movie companies everywhere are increasing concession prices and movie makers are increasing ticket prices in order to maintain their revenue. So how does a multi-million dollar company fight this? Increase attendance.

A rewards/loyalty program is a key way to drive attendance, but not a guarantee. In order to help guarantee attendance, companies such as AMC charges a yearly membership fee. By paying a fee, customers will need to choose AMC for their movie experience more often if they want to make up for paying the fee. But with movie companies, it’s not always that straight forward.

Believe it or not! Most movie companies (including AMC) don’t make anything off of ticket sales! Yes, they do record tickets sales in their yearly reports, but when it comes to making an actual profit, they must turn to advertisement and food. This means when AMC, for instance, needs to increase revenue, they really need more people to buy food.

How does this effect a new rewards program?

The moviewatchers program neither promoted concession sales much, nor rewarded concession purchases. The new AMC Stubs program does just that. It promotes concession sales by offering free upgrades on concession items and rewards a customer by giving back $10 for every $100 that person spends.

A more superior program? It all depends on how “loyal” or how frequently you chose AMC. In my own experience, people will say they are “avid movie goers” or that they used their moviewatchers card “all the time”, when in fact, it was the other way around. When a program is free (having many free cards myself) how often you utilize that given program my seem more often than actual. Something a business, one that employees millions of americans and students, cannot afford.

Lets talk hard numbers

My favorite part, and something you should do as well. We’ll first use someone who goes to the movies once a month (only 12 a year), never buys concession items, and only comes when tickets are the least expensive; before noon.

12 tickets at $6 a piece + the $12 membership fee = $84. Not even enough for a $10 reward.

Total outcome: -$12

Now lets say they buy a small popcorn ($5.75) each time they go.

12 tickets @ $6 + $12 membership fee + 12 popcorns @ 5.75 = $153. Enough for a $10 reward AND if they upgraded to a medium for free they saved an extra $12.

Total outcome: +$10

It’s easy to see how buying concession items really changes things. Even for the cheapest visit. On average though, people will see a movie between 7pm and 8:30pm, when tickets are not discounted, will bring a friend and, at minimum, will both buy a large drink. Again, visiting just once a month, the numbers are as so:

12×2 tickets @ $9 a piece + 12×2 large drinks @ $4.75 a piece + $12 membership fee = $342. Enough for $30 in reward money and saving $12 on concession items.

Total outcome: +$30

How does this compare to the moviewatchers program? Moviewatchers (MW) only credited ticket sales. Giving 2 points per ticket with a maximum of 4 points per day. So two tickets a day. After 10 points (5 tickets) you would receive a free small coke. At 20 points (10 tickets) a free small popcorn and at 30 points (15 tickets) a free ticket, not usable on new movies. Rewards were printed out in coupon form and had a 30 day life. Any downsides? If you bought a matinee priced ticket ($6) you got 2 points. If you bought an IMAX 3D ticket ($14) you got 2 points. Now, if you paid more than double for a ticket that awarded 2 points, wouldn’t you want more than double the points? If you lost a reward coupon there was no way of getting it back and if you didn’t use it within it’s 30 day life, it was void.

AMC Stubs gives you $10 back for every $100 you spend and free upgrades on popcorn and fountain drinks. Rewards are added instantly and electronically to your rewards card and have a 90 day life. If you buy a matinee priced ticket ($6), you get 6 “points”, if you buy an IMAX 3D ticket ($14) you get 14 “points” If you lose your card, all rewards money is still obtainable. If you don’t want to bother with the 90 day life, you can put your reward money on a gift card since gift cards never expire. Rewards are not predetermined with AMC Stubs, you choose what to spend it on. Any downsides? Yearly membership cost of $12.

In conclusion

The moviewatchers program was free, and every once-in-a-while would give you a small token of appreciation, but was not in the best interest of a company facing a hard future and it won’t be coming back. For the active movie goer looking to get the most out of your experience, AMC Stubs is the way to go. If you like to go to movies, but don’t go that often, a rewards card is not for you. After all, no matter where you go or who you have a rewards card with, a rewards program is not beneficial unless you are a frequent visitor. Don’t let yourself get caught up in bad press, instead, make an educated decision on whether something is right for you. Do the math. I myself don’t feel a loyalty/rewards program is something I should have to pay for, but if I will come out on top, I really don’t mind. $12 a year is only a $1 a month. I personally end up with $20-$30 in my change jar at the end of each month and have no personal or financial issues with using a dollar of that for my rewards program. I go to the movies once a week and always get a popcorn and drink. Rewards program or not. So paying a $1 a month to save $4 a month is beneficial to me. Plus, I get $10 free every month. Even after the $12 membership fee (which I’ll never have to pay with my hard earned money every again) I save $13 a month. That’s $156 a year. More than I’d save switching to Geico.

It seems unreasonable to pay such ridiculous prices at the movies, but until the way movie companies make their money changes, it’s up to us to keep them alive. It’s no different than going to the fair or an amusement park. Outrageous entry fees, inflated food prices and high entertainment costs. I go for fun. To make memories with my friends and family. To get away from life’s little stresses, while enjoying a movie on a 2 story tall screen with 10,000 watts of surround sound. Something I will never get at home, no matter how cheap my movie rental was or how big my TV is.

I hope at least a small portion of this was helpful and/or informative.


Guest Writer