LOS ANGELES • In a sign of just how much streaming is changing Hollywood, movie fans will soon be able to rent and buy films for viewing at home - from a movie theatre chain.
AMC Entertainment, the largest multiplex operator in the world, introduced an iTunes-style online video store in the United States yesterday, said Mr Adam Aron, AMC's president and chief executive. The service, AMC Theatres On Demand, will offer about 2,000 films for sale or rent after their theatrical runs, just as iTunes, Amazon and other video-on-demand (VOD) retailers do.
The movie theatre industry has long been at odds with online video. Why trek to theatres if thousands of movies are available at the click of a button at home or on your phone? Sure, new films do not arrive on VOD until they have played in theatres for an exclusive period of about 90 days. But that "windowing" practice, many analysts believe, will become untenable as streaming services like Netflix gain clout.
Hollywood's five biggest movie studios - Disney, Warner Bros, Universal, Sony and Paramount - have made deals with AMC for catalogue and new-release movies. Although DVDs still account for billions of dollars in sales for studios, more profit now comes from digital downloads and rentals.
"For us, it's all upside," said Mr Ron Sanders, president of worldwide distribution and home entertainment at Warner. "Most of our other big digital partners are focused on multiple categories - music, books. The great thing about AMC is that movies are the whole focus."
Films will cost roughly US$3 (S$4.10) to US$5.99 to rent and US$9.99 to US$19.99 to buy.
Mr Aron, who took over AMC in early 2016 after running the Starwood hotel chain, has been more willing to embrace change than many other theatre executives, in part because he is not blind to his industry's challenges. Moviegoing in North America - across the chains - has been roughly flat for years, leaving theatres to scratch for growth by charging more for tickets and concessions, a strategy that has its limits.
"Our theatre business is mature," Mr Aron said. "There is a high-growth opportunity in this digital expansion."
He called home entertainment a "natural" extension of AMC's core business - one designed to capitalise on the chain's fast-growing customer loyalty programme, AMC Stubs, which covers more than 20 million households. He said the AMC Stubs database gave the company a marketing advantage for movie rentals and downloads.
For instance, AMC Stubs members bought about six million tickets to The Lion King over the summer. When The Lion King became available digitally yesterday, "those people will all get a personalised message from AMC saying that they can now enjoy it at home through AMC Theatres On Demand", said Ms Elizabeth Frank, AMC's chief content officer.
Some theatre chains in other countries already operate on-demand divisions (Cineplex in Canada is one), but AMC is the first major exhibitor in the US to do so. Mr Aron said AMC had been working on the service for more than two years. It was close to introducing AMC Theatres On Demand this summer, but held off to fine-tune the technology and online store design.
Under Mr Aron, AMC has worked to make theatregoing more attractive. It aggressively installed advanced Dolby sound and projection systems, extra-wide screens, and La-Z-Boy-style seats. In 2017, Mr Aron rolled out greatly expanded food menus at more than 600 theatres.
After noting the popularity of MoviePass, the now-defunct movie ticket subscription service, AMC introduced its own (sustainable) version. For one monthly price, AMC Stubs A-List members can see up to three movies a week.
AMC, based in Leawood, Kansas, and partly owned by China's Dalian Wanda Group, became the largest multiplex chain in the world in 2016 after going on a breathtaking shopping spree. It acquired the Carmike chain in the US and added Odeon in Britain and Nordic Theatre Group in Northern Europe.