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Insights: Why Is AMC Getting Into the Streaming Business?

October 16, 2019 00:00 AM UTC
- Updated May 06, 2020 17:11 PM UTC

It's just launched AMC Theaters On Demand.

LISA MARIE SEGARRA: Welcome to Fortune Tech Debate, where we discuss the issues of the day in two minutes. Today, we are talking about AMC theaters and their new streaming site. I've got to say, David, this feels like a weird move. What do you think? DAVID MORRIS: Well, we definitely do have a lot of streaming options out there nowadays. But for AMC, this is much more about making things fit together with their theater operations, their other properties, and getting some synergy going. LISA MARIE SEGARRA: You know, you say synergy, I say stretching themselves too thin. I think that AMC actually delivers a great theater experience, but they are a theater company. They're not a tech company. It feels like they are really watering down their own brand. They know how to do theaters well. I know that they have these other opportunities with licensing that they have. But I don't think they're using it properly. DAVID MORRIS: Well, one of the problems there is that when you're really good at theaters, you've got a limit. Theaters are not growing, plateau of their revenue. You can only sell so many waffle chicken sandwiches. And so this allows them to, through their loyalty program, which is hooked into the new streaming option, get people motivated to do both at the same time and hopefully profit on both sides. LISA MARIE SEGARRA: Yeah, that's the thing about growth. Streaming is one thing that already has way too much growth. You've got Disney Plus coming. You've got Apple TV Plus. Plus, people that have been around or companies that have been around for a while, like Netflix and Hulu. Really, do we need another streaming service? And especially one that this isn't even their main focus, are they really going to deliver the best product? Probably not. DAVID MORRIS: Yeah, that remains to be seen, the experience. But it's definitely not trying to compete with Disney Plus or Netflix. It's an a la carte offering. It's not a subscription. If you are part of the loyalty program, you get points for buying movies online that then motivates you to go into the theaters, which is really interesting. They may actually be able to use their streaming service to get more people to go to the movie theater, which has not been an easy thing to accomplish lately. LISA MARIE SEGARRA: Yeah, they should focus on that problem. They are being too greedy, and I think it's going to come back to bite them. We've definitely seen other companies overreach, and it's been their downfall. So I would hate to see that happen here, too.