AMC Entertainment (AMC) has taken the opportunity to use everyone’s favorite part of the airline industry for itself: the pricing model.
You know, the dynamic pricing model with different tiers of seat selections for its customers so the ones looking for the best value have their knees stuffed against their chest and the consumers looking to breathe a little can pay for that luxurious first-class experience. Well, AMC has seen how well it works for airlines (and other industries such as sporting events and concerts) and decided to implement it into the movie theater experience.
Sightline
Sightline is the new value-based program from AMC that allows movie goers with multiple seating options to optimize their viewing experience. At least that’s the terminology AMC is using instead of the reality that people could always choose their seats but now certain sections will cost more or less depending on their positioning relative to the screen.
The sections are what you would expect with the middle areas consisting of preferred sightline seats while the value seats are in the front row for people who don’t mind having a throbbing neck for the next 2-3 business days. The other areas of the movie theater will be comprised of the standard sightline seats. Each area will be color coded and have different ticket prices for their section.
What Does This Mean for AMC?
Now, the real question is going to be how different are the ticket prices for each seating area. Standard areas can maybe be assumed to be staying at the same price as regular tickets offered at AMC with value and preferred areas being a few dollars less and more expensive, respectively.
Depending on how the theater is divided by section, AMC will likely make more for a fully packed screening with a large section being the preferred area as obviously the intention here is for the business to make more money. However, it's hard to imagine this moving the needle much for the company’s profitability as the preferred section can’t cost that much more than standard areas and now the firm is going to have to deal with enforcing these seating arrangements.
What’s to stop someone from just buying a value ticket and then entering the theater and choosing the best available seat? For a full screening sure there may be few willing to do this to cause a scene but for screenings with vacancies, why not just buy a value ticket and go sit as close to the middle as possible? Anyone looking to watch a rerun of some Marvel movie at noon on a Wednesday might as well buy the cheapest ticket and enjoy the best seat in the house.
In order to avoid that, AMC is going to have to hire additional employees to monitor seating or develop some technology in the seats and tickets that locks out a seat until approved with the correct ticket. Elon Musk should really get to work on developing something like this, maybe a seat with spikes that come out if the wrong person decides to take a seat.
Wrapping Up
Either way, this Sightline program is going to increase AMC’s costs by some amount so it's really hard to imagine this ramping up its profits to a major degree. Additionally, it is going to alienate some of its most loyal fans as the firm’s AMC Stub members do not get a discount on the preferred seats, instead only receiving a discount for the value seats.
At the end of the day, the idea for dynamic pricing for movie theater tickets makes sense and it should help maximize profits for AMC and will likely be used by other cinemas so long as it doesn’t receive too harsh of a backlash. Just don’t expect this move to make a massive difference for AMC’s profitability as the struggling company has yet to reach positive earnings since the pandemic struck.
