How To Save Movies With the CEO of AMC Theatres

26:58Matt Belloni:we might have to shorten but you suggested in a tweet or in a comment that people should just show up late well not exactly and what we said and the studios and the studios don't like that because they want people to watch their trailers well i want i want people to watch the trailers too because i think it's the best ad that studios have for their movies and it's the best ad that we have to get people to come into theaters to watch the movies what we did put out a message was and by the way that message was has always been on our website it just was a little more buried and we made a little more visible you've told me many times i don't i show up 25 minutes late personally i do yes big big because i knew the movie started 25 minutes after showtime yes on average and now they start 30 and we put it we we gave more visit when we lengthened the pre-show we gave more visibility the message that feature films start 25 to 30 minutes at posted showtime because we were we we didn't want to mislead consumers that you know you got to rush you got to get there on the dot of when the showtime is and they sit there for 25 minutes and they're upset um but when we did this to lengthen the pre-show five five six minutes we knew we might have to short if it if it sort of didn't work we'd have to shorten the pre-show by five or six minutes and that's what we're doing right now so we're cutting out about two-ish minutes from all the marketing stuff we do why do you do that why are there four separate amc ads during the pre-show they work.

28:34Matt Belloni:But what does working mean? You need to market AMC to people who are sitting in an AMC theater? Why is that? Nicole Kidman, great. Just have that.

28:48Because one of those minutes, 35 seconds of those minutes, is talking about how good A-List is. And A-List has gone from 500 ,000 members three or four years ago to a million members today. And that's a really important program for us and that's a very important communication for us to make. And we put it far enough away from the way we put it, most of it, way up front. Not Nicole. She's right before the movie starts. Of course.

29:13Matt Belloni:She deserves it. Is a new one coming, by the way? Someday. You teased a new one and it wasn't a new one. It was a recut old one. That's right. That's right.

29:27I told you, he knows what's going on. And by the way, we're going to do it again for another year, and we're going to recut it even shorter.

29:34Matt Belloni:Oh, really? Nice. We'll get another hit out of that. I hope she gets paid more. Of course. But I've got to finish the advertising question. So we're taking about two minutes of the marketing fluff out, and we're going to show one less trailer, because we actually show one more trailer than everybody else now. And if you add those two together... How many trailers are you up to per movie? I think we do eight, and everybody else does seven. so we're going to go back to seven like they do and that cuts two and a half minutes plus the marking fluff so we're going to shorten the pre-show by the same five minutes that we added and i do believe that will be sufficient to please the movie going public

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31:48Matt Belloni:Have you ever done a study where you posed whether people would pay$2,$3 more for zero pre-show? No. No, it never dawned on me to try that. Okay. Are you kidding? What? No. You've never done that? You've never? Never tried that. But also we have a contract with a third party that wouldn't allow us to. We would be in breach if we did that. You mentioned earlier having sort of a love-hate relationship with the studios. No, it's more love. More love. Love, love, love, love, love, love, mild upset, love, love, love. It's dysfunctional often. Which is the hardest studio to deal with? And why is it Disney?

32:33That was my question, but I did the why is it Disney earlier, so I didn't feel like I could repeat.

32:44Sometimes you're a bit unfair. And I will tell you, I've run this company for nine years and eight months, and my interactions at every level at Disney have been spectacular. And I'm not...

32:59Matt Belloni:When they're asking for 70 % of opening weekend and the split argument is getting really heated. They don't ask us for 70 % opening week. They don't? No. Okay. But it helps to be the largest theater chain in the world. It helps to sell the most tickets for any studio than anybody else. But having said all that, and I know we were joking earlier and you were saying about people who say nice things about people. I actually meant what I just said. Our relationships at every level of Disney are spectacular. And I've told them this over and over again. I said, if Disney is a good quarter, we're going to have a good quarter.

33:40And if Disney is a bad quarter, we're going to be in trouble. If Disney is a big movie, AMC is going to be really full. And if Disney has a flop, AMC is going to really feel it. So I have so much appreciation for what Disney does. And if you go back over time, I mean, they've had a quarter or two where they've missed, or they've had a movie or two where they've missed. but if you go back the 10 years that i run this company disney's had a lot of hits

34:06Matt Belloni:they have but does does the marvel weakness scare you the new normal for marvel is not where we were pre-covid would i love it if disney is even more successful than it is today yeah i would um but it's got to be concerning beyond one off titles it's got to be concerning that each of these disney Marvel movies seems to be stuck in that four to 600 realm and not above that. We are only 120 days away from a little movie. You may have heard of it called Avatar, Fire, and Ash. Yes. Okay. Stop the clock on how long it took him to get to Avatar. I happen to be an optimist about the future of the box office.

34:50You and I did a panel together a year and a half ago at CinemaCon. and the box office had been just dreadful up until that box up until that panel and i went on that panel and i said it's about to turn and the rest of the year is gonna be great and people looked at me like i was a man from mars because like having you look in the rearview mirror like it's been terrible and sure enough uh it was great the next eight months um and as i look ahead when i When we called this year, we said the first quarter was going to be a debacle. Second quarter is going to be great. The third quarter is going to be soft.

35:29The fourth quarter is going to be great. And all of 2026 is going to be great. And I think just like that prediction I made in April of 24 turned out to be right, I think the prediction that we made at the beginning of this year, I'm reiterating it again tonight unchanged. I think July and August, September are going to be a little weak. I think October, November, December are going to be great. And I think 26 is going to be a better year. Didn't you guys say 2025 was going to be the banner year? Well, 2025 is probably going to end up, nobody knows exactly, but let's call it$500 million to$800 million bigger than 2024.

36:06So that's an improvement. And I think 2026 is going to be$500 million to$800 million, $500 million to$1 billion more than 2025. and if you look at our industry like the sad truth is pre-covid you didn't need to be real smart to run a movie theater company the the the you didn't um the grosses were very reliable the income flow was very reliable that's kind of the problem that's why there hadn't been any innovation you keep saying that i keep on giving you this list of all things you talk about the recliners i know you okay i'm innovation before we go to innovation just um the box office was over 11 billion five years in a row then it was two that's a real kick in the teeth uh then it was four and a half then it was seven and a half then without the taylor swift to beyonce movies it would have been eight seven it was nine because we invented those in like a few months uh then if there were strikes it fell back to eight seven basically flat with the year before prior to, if you exclude Taylor or Beyonce.

37:17Then this year, nobody knows exactly, but call between 9.0 and 9.6. I think there's a fighting shot that next year is between 9.5 and 10.5. We'll see. It's not back yet to pre-COVID levels, but it's a lot stronger than And it's been our profit per patron is up exactly 48 % today versus pre-COVID levels. So what we earn from an average consumer coming into a theater, our profit's up close to 50%. Why? They're buying more food and drink. Popcorn buckets. And they're buying merchandise. Booze. We didn't have bars 10 years ago. We have 350 bars.

38:04Makes the movie better, too. But merchandise, three years ago, we didn't sell any movie-themed merchandise.

38:14Matt Belloni:Yeah, that is insane to me. I don't understand. You've got people, like, the theme parks know to put the gift shop right when you come out, and the theaters somehow did it. Well, we learned it. And right now, we're pushing around$100 million a year of movie-themed merchandise in our theaters from nothing three years ago. And this is how we survive COVID, actually, because we've figured out other things to sell people. So people have said for years that you should do lower prices during the week. You've had Tuesday discounts. You then this summer have switched to Wednesday also discounts. How did that happen when people have been saying this for a decade at least, that you should have another night of discounts?

38:54Matt Belloni:Why did it take so long? And how does the split work with the studios when you are charging 50 % of ticket prices? So I want to give someone credit. I come out, you know, we're based in Kansas City where three vaudeville, yeah, yeah, yeah. Chiefs, Travis Kelsey, I got it. Don't minimize that, please. I'm not. It's a big moment for both of them. For the whole world. I have the greatest respect. Remember, we did a Taylor Swift movie two years ago. I have the greatest... Words cannot describe how much respect and appreciation I have for Taylor Swift. Do you want to FaceTime Scott, her father? You've tweeted a lot about her.

39:38I do, because we owe her a lot. We made a lot of money under the ears to our movie. Anyway... So did she. And she deserves it. But anyway, how did we get there? The 50 % off nights. To give somebody credit, we're based in Kansas City. I come out to Hollywood kind of every six, eight weeks personally, and I usually make the rounds and see a lot of people. And I was in a meeting at Sony with Tom Rothman, the head of Sony. Yeah, the head of Sony. And he took my head off. And he said, movies are too expensive.

40:16And literally a light bulb went off.

40:20Matt Belloni:That can't be true. I swear to God. It took a meeting with Tom Rothman to think that maybe a 50 % night would be good to double. The numbers on Tuesdays have been larger than the rest of the week for years. Well, he wanted me to cut prices seven days a week. Okay. And I said that would probably be a disaster because there are many markets where we try to cut prices, and all it does is cut our income. But I swear a light bulb went off in that meeting, and I thought it's finally time to try. let's take discount Tuesdays and turn into discount Wednesdays. But do you eat that? Do the studios still charge you the same for the rental and then you have to eat the difference?

41:03No, they still get the same percentage of the gross on Wednesdays that they got before, just the prices are lower. They want to make it up on volume. But the law says that studios are not allowed to participate in our pricing strategies. but the reality is no, it's not we're not going to break the law but we need to build like we're a real company like real money at stake and we have real partners and real partnerships and if we just go off half-cocked and do crazy things that's not a good way to win friends and influence people

41:40Matt Belloni:like posting memes of yourself as an ape on Twitter that's okay they don't care But when we do something big, we like to build consensus. So we ran around their major studios and said, we're thinking about doing for Wednesdays what we did for Tuesdays. And we delivered your speech. Look, Tuesdays are our highest patronage midweek day. And we get so much more income on a Tuesday than we get on a Monday or Wednesday. We should try this for Wednesdays also. And their first reaction was, I don't know. and but we went at it for a couple so is it working seems to it's a little early to declare victory we've seen it's only been in place since july two and three um and what we're only like seven or eight weeks into it we definitely have seen attendance spikes it's not clear to me yet that the attendance spike is more than the price cut but the attendance spike so we might be a little behind in like this like last month and a half but the attendance spike is so dramatic that it's clear that people are seeing the message and i think if we stay at this for a while uh it we have the chance to make wednesday a strong day rather than a week uh w-e-a-k week day what week week day why is there not more variable pricing in general right like you have a big movie that comes out on a weekend you know everyone wants to see it you could charge 20 25 30 bucks for it you added a surcharge you have a movie in weekend three you could just any movie even on the weekend could be a discount so we've tried it over and over um lots of different ways number one we tried well we just tried cutting prices like that's a let me start with a pro consumer thing rather than the whoa we raised price uh we we tried raising price on weekends and once we started pushing above a two dollar price premium it looked like we went backwards not forwards i'm talking about the u.s market now it's very different in europe we tried that and that worked we tried what we called blockbuster pricing which we charged a couple of bucks more for a big movie title than a small movie title when we launched blockbuster pricing we launched only for the first weekend, first weekend, second weekend, but then we reverted back to the regular price.

44:11Since about a year, year and a half ago, on Blockbuster pricing, we've maintained the Blockbuster surcharge for the whole length of the run. We've tried discounting movies at the end of the run. So many is the occasion where we'll, we call them$5 fan faves, where we'll discount prices at the end of a run because demand in the sixth week or the ninth week isn't what it was in the first week or second week. We tried one famously that still kicks me in the teeth that it didn't work, which is we called it sightline seating.

44:45Matt Belloni:Oh, yeah, I remember that. And we tried to charge a higher price in the best seats of the house than we did in the worst seats of the house. And my recollection, these are not exact numbers, but close enough. like 80 % of the game by the way these are not big surcharges these are a buck or two these aren't $10 and$20 surcharges um because when we tested super premiums it was clear there's enormous consumer pushback um like 80 % of our guests happily paid for the better seats 10 % of our guests moved from the better seats to the worst seats which opens up the better seats for more people. But 10 % of the people went to our competitors because none of our competitors matched us.

45:32And whatever we made from the 80 % who paid a little more was dwarfed by the 10 % who deserved us to our competition. So we had to abandon that effort. So I think that we have experimented with a lot of pricing both up and down. And the most recent example is 50 % off wins this and uh hopefully you know that's why i'd rather talk about the price experiments we went down than the price experiments where we got up but hopefully this will work because if we could make it cheaper for moviegoers to go see movies in a theater and make more money in the process than everybody wins if by cutting the price we cut our own profits that's probably not a good thing to do um but we're gonna see what happens but juries it's long way too early to decide if it worked or not, but it seems to be working so far.

46:25That would be my guess.

46:26Matt Belloni:All right, Lucas alluded to it before. I want to get back to your relationship with the streamer services, with Amazon, with Apple. We don't have to talk about Netflix, but you're making the rounds. What are you hearing from Apple on their willingness to put movies in theaters? They're very happy with F1. They still have not committed to robust theatrical releases for upcoming movies so let's talk about both of them i think we have i would say we i mean amc i think we've got superb relationship with amazon mgm um and we have superb relationships now with apple we way over delivered we really leaned into f1 um both because it was a really good movie and because it was so important for us yeah if it failed they were out and if they succeeded they we thought they would be in.

47:19And we've heard that from lots of levels at Apple. And fortunately for us, and for them, I think F1 was a big success. So while they've made no announcements, I'm hopeful that their success, I mean, this is one of the most successful.

47:34Matt Belloni:Have they said that to you? What's that? In your meetings, has Apple said, we are going to put our movies in theaters for a meaningful window? I should let Apple say for Apple what Apple wants to say about Apple. But did you leave those meetings feeling happy? Yes. Very happy. Okay. And let's just say that we leaned in very hard to do our bit to help make sure that F1 succeeded because our bet was that if F1 succeeded, Apple would actually be a robust maker of movies. We'll find out together whether they are not, But I'm very happy for Apple at the results of that movie. This isn't their first effort, but this was a really big success.

48:23Matt Belloni:Not embarrassing, which for Apple is good enough. This is the difference between you and me. No,$600 million. That's nice. It's better than not embarrassing. They made their money back, and it's a hit. And not embarrassing is not charitable enough to Apple because it wasn't not embarrassing. No, the reason I said it is because the other movies were embarrassing. And unlike traditional movie studios that can say, we release all movies, all types, we have flops and hits, it was a PR drag for them, which for Apple is unacceptable. So that's why I mentioned that. Apple is used to success. Yeah. Well, and I, just one sec.

49:00Yeah. And I'm glad for them that F1 was a success. I'm glad for us that Apple had a very successful movie. And remember my whole premise on why streamers should want robust theatrical releases. I'll bet you that when F1 hits the Apple streaming service, it's an immensely successful title rather than it's just one more movie that you've never heard of on a streaming service. And so I hope that Apple will release more movies. I think that Apple will release more movies. But I know that this one was something that they should be very proud of. and deserve all kinds of accolades. And it's not just Apple.

49:42Same with Amazon.

49:44Matt Belloni:Well, that's the thing. Amazon has committed to releasing movies in theaters. They have not committed to what the windows will be for that movie. And I know that several of the theater chains were annoyed with what they did with Red One, the Dwayne Johnson movie this past holiday season, where it was in theaters for Thanksgiving, but on the service by Christmas. And that window is typically not enough for you. although you'd be amazed how many studios are releasing are i'll call not movies of that size uh you'd be amazed how many movies some studios not all are excuse the french cheating on the 45-day window but they but typically in premium video on demand not putting it on prime video which is available to most americans that that's also accurate uh having said that look i i'm a firm believer that when you know when when covid came every studio experiment with all sorts of stuff take movies just to streaming services uh disney did some of that on disney plus warner brothers under kylar remember took movies to the home and theater on the same day that was a disaster i didn't think you could say his name that's uh i have a little twitch jason kylar yeah um they experiment with everything and where we supposedly landed up was the old 74-day window was gonna be a 45-day window and what's happened is i don't know half the movies are a 45-day window disney's movies are all a 60-day window but there are a lot of movies that are hitting the home at 25 to 35 days and we think it's really important i think that we'll never get back to a 74-day window again.

51:27But it'd be nice to actually adhere to a 45-day window. It's going to be something that will appeal to some studios and be a fistfight with others.

51:34Matt Belloni:But they haven't guaranteed or said that they're committed to that. Who's the they? No, but neither is anybody else other than Disney. You talked earlier, I'm curious, about how the key to AMC's success is that your customers have a better experience than at other chains. Do you feel like extending the window is a good customer experience? look as you phrase the question i assume that if movies could go to the home for free on day one that would be the thing that consumers might some consumers might like the most they'd also prefer that they be free in general yeah they'd prefer that your theaters be free I understand that.

52:18But going to a movie theater and seeing, as Nicole Kidman says, dazzling images on a huge silver screen. Yeah.

52:28Matt Belloni:Oh, my God. It's like crack. They love it. Do you know that there are bumper stickers and T-shirts with phrases from the Nicole Kidman commercials all over America? Why aren't you selling those in your theaters? Maybe we should. You should, actually. They would sell. Where's Ryan? Write that one down, Ryan. Yeah. But coming back to seeing movies in a movie theater is something that Americans have done for more than a century. And no, it's like, yes, there are, you know, there have been other inventions along the way. So not as many people see movies today in theaters as they did in 1930. But it's still a wonderful experience, and it's done 800 million times a year in this country.

53:26And a little-known statistic, if you – and by the way, it's a really cheap date, even at what we charge in L.A. Where are you going to find two or three hours of out-of-home experience in a nice setting, in a comfortable place, for$12 across the country on average,$18, probably$17,$18 here in L.A.

53:46Matt Belloni:like this this right try 22 on a friday night but we'll get we'll let that slide only if you see an mplf but the um but i think that preserving for your kids and their kids the chance to see movies in a movie theater 20 years from now and 50 years from now and 80 years from now that's a good thing and people i mean look if covid taught us anything it's like your house your apartment's really nice but you don't want to spend every moment imprisoned in it you want to get out you want to go do something i remember um it was like sometime in late 2020 and i actually left my house and i went to home depot and i spent three hours there and it was like the most exciting thing i'd done in six months.

54:35I was so, wow, look at this place. It's amazing what they have here. And I want to do that for your kids and your grandkids. I want to preserve that theaters still exist and that theaters are still viable. And you can go to your movie Plex down the street and watch a movie on a big screen. And so that's why the Windows thing is so important. Are you getting teary? listening to this if we can convince i'm in a theater every month convince studios and this is a big if because we'll we'll get there with some we're already there with disney we'll get there with others if we can convince every studio which might be a pipe dream to think of but we convince everybody that they should like religiously adhere to a 45-day window i think that makes movie theaters more profitable movie theaters being more profitable means we can say sustain ourselves as an industry.

55:33And it means your kids and your grandkids get to go watch movies in movie theaters 50 years from now. I think that's a good thing.

55:40Matt Belloni:Alright, we are coming to the end of our journey here. As opposed to free, free, free at home. Yes. We're coming to the end of our journey. Do you regret doing this? Are you happy you did this interview? This is great. Is your PR guy going to say the same backstage? I'll ask him. I don't know. He told me... He didn't come out and stop the interview, so that's good. No, but he told me not to be funny and they've been laughing all night. Do you have any other questions? I have a couple, but we don't need to get to them. I have a couple, but I feel like we've... He said I should be a boring CEO type and just like...

56:13Oh, but that's not fun. That's what I... Okay. One last question. You can have the last one here. You mentioned at the beginning how you'd spent the last 10 years trying to figure out how to get that 14 % occupancy up. And you keep referring to your theaters as movie theaters. And I feel like one of the things that people have talked about and tried is programming things that are not movies. Do you think there will ever be a point at which you see a movie theater as something that isn't just for movies? And if so, what will it be for? Well, you are so, I mean, you are, I just kept going to tell you you're right or wrong.

56:47He's so right. Well, I had that too. I'll give that one to you then. literally earlier today I talked to one of my senior vice presidents we've got to get sports rights we've just got to get sports rights we've been trying for years mostly unsuccessfully we showed for three seasons we showed NFL games we showed all the wrong games no we did we got the rights from DirecTV and what they had the rights for were what are called the out-of-market games. And what I found out is that in Chicago, they don't want to watch Seattle play Jacksonville. They want to see the Bears. And in Denver, they want to see the Broncos.

57:39And I guess in L.A., I mean, when I lived in L.A., I lived in L.A. a long time ago, there wasn't even a football team here. But there are, I guess you want to watch the Rams and the Chargers in L.A. it but people want to so we've been showing the wrong games well cosmo cosmo is essentially that i was gonna say do you like you see cosmo you see the sphere do you feel like i mean sphere is a little expensive but do you feel like that should be in a movie theater well if you know what it costs to build a cosmo uh with it's very i went to check it out i would say that the cost of cosmo just sort of remembering it's a while since i looked was like 30 times what it cost to build one movie theater auditorium so we probably couldn't put that in 850 locations with 10 screens but i do think that i i know because i went to see someone's wrong nfl games in our theaters and watching a football game on a 55 foot screen is pretty good yeah why don't you

58:39Matt Belloni:do monday night football that's disney you have a relationship with disney they could distribute monday night football via your theaters we got really close but we we we weren't a we we got disney on board we weren't able to get the nfl on board why not they want they want the content in more places ask the nfl okay i gotta send a cease and desist letter oh wow yeah but having said that

59:04you say we need to fill our theaters on monday nights i completely agree uh but but sports rights is one. Earlier today, I talked, that's not today, yesterday, I talked to an important executive about maybe live streaming concerts into our theaters around the country because we have the capability right now to take at 277 of our 540 U.S. theaters, we can actually live broadcast into a theater. So that's an interesting idea. The biggest idea I'm working on, I can't talk to you about.

59:39Matt Belloni:Really? Oh, yeah, you can. We're amongst friends. Not till January or February. Super Bowl? No. No, it's not sports. Okay. But if we can pull this one off, this is a really amazing idea. But we haven't pulled it off yet, so I can't talk about it. The Taylor Travis wedding.

1:00:00Matt Belloni:Call Scott Swift right now. Hey, it's Ryan Reynolds here from Mint Mobile. Well, now I was looking for fun ways to tell you that Mint's offer of unlimited premium wireless for$15 a month is back. So I thought it would be fun if we made$15 bills. But it turns out that's very illegal. So there goes my big idea for the commercial. Give it a try at mintmobile.com slash switch. Upfront payment of$45 for three months,$90 for six months, or$180 for 12-month plan required. $15 per month equivalent. Taxes and fees extra. Initial plan term only. Greater than 50 gigabytes may slow when network is busy. See terms.

1:00:34One thing I learned about, the one thing I never joke about is Taylor Swift. Oh, God. All right. You and me both. I just am very reverent, as she properly deserves.

1:00:44Matt Belloni:All right. Adam Aaron, thank you very much. Appreciate it.