AMC Explores Variable Pricing with The Batman

Image courtesy of AMC

In a Q4 earnings call with investors, AMC CEO Adam Aron and CFO Sean Goodman laid out how the recovery of the largest global cinema chain proceeded across the final quarter of last year—as well as offering details on a variable pricing experiment tied to this weekend’s release of Warner Bros.’ The Batman.

Variable pricing models, explained Aron, are nothing new to AMC, particularly at their European theaters, where they “charge a premium for the best seats in the house”—similar to pricing schemes seen in sports arenas, concert venues, and other similar entertainment spaces. With the March 4 release of The Batman, a bump in pricing is tied to high demand, with ticket prices being set “slightly higher” (per Aron) than “other movies playing in the same theaters at the same time.”

AMC has experimented with variable pricing before. In 2019, the chain introduced a pricing surcharge (between $0.50, $1, and $1.50 per ticket) to select, high-appeal movies in 30 AMC locations across Boston, Columbus, Indianapolis, and San Diego. Several years earlier, the chain raised ticket prices on weekend days and lowered them on Tuesday, resulting in Tuesday going from the least-visited day of the week to the second-most visited.

In an August 2019 earnings call, Aron made clear the chain’s intent to experiment with variable pricing moving forward, with possibilities including “charging more for large screens, charging more for the best seats in the house, maybe charging less for the front row, because they’re not the best seats in the house, [and] charging more for blockbusters.”

“These pricing strategies have been commonplace across our European theaters for years, and industry observers have talked about this idea coming to the United States also for years,” added Aron at the time. That sentiment has been echoed by NATO chairman John Fithian, who wrote in Boxoffice Pro in early 2019 that “In Germany and other European territories [in 2018], greater dynamic pricing has begun to take hold. Variable pricing based on demand levels, proximity to show time, seat location within the auditorium, and other factors has shown promise.”

Looking back to Q4 2021, Aron and AMC CFO Sean Goodman reported average revenues per patron that were 25.5 percent higher than the same period in 2019, prior to the pandemic. Q4’s $1.17 billion worldwide revenue marked a 53 percent increase over Q3 2021, and is more than seven times the revenue earned by the chain in Q4 2020. Says Goodman, “This tremendous growth in both revenue and contribution dollars per patron was across both our domestic and our international markets and reflects strength in average ticket prices, food and beverage spend, and other revenue per patron.”

Particularly, the increased popularity of premium formats as moviegoers return to the cinema was cited by Goodman as a contributing factor to AMC’s Q4 gains, with the percentage of attendance at premium formats up 17 percent in Q4 2021, compared to 12 percent in Q4 2019. Food and beverage per patron spend, likewise, was higher than pre-pandemic norms to the tune of 35 percent. Speaking domestically, Q4 revenue was up 24.5 percent from the same period in 2019.

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