Adam Aaron, CEO of AMC, talks about price hikes on The Batman series and investors from ‘Ape’

AMC CEO Adam Aaron is a rock star for a very specific group of people.

Those guys, of course, are the 4 million non-professional investors who drove the company’s stock prices up, and they currently own 80% of the movie theater chain. The new shareholders, who saved the beleaguered chain from bankruptcy during the pandemic, call themselves “monkeys.” (The name refers to “The Planet of the Apes,” a movie in which primates flip over humans.) To them, Aaron is the Silverback King.

Perhaps there is no one better than Aaron for embracing chaos, a Harvard Business School graduate with a penchant for showing off. He communicates with Apes directly on social media and embraces their ideas, such as accepting bitcoin and other crypto payments for tickets and perks.

“There were some professionals on Wall Street who looked down on them,” Aaron says. “They own our company, so we don’t underestimate them. We look forward to them.”

The frenzy of the internet may have saved AMC from impending doom, but many challenges remain, such as stagnant attendance levels and the battle to sell movie tickets that don’t include superheroes. There are indications that everything is starting to improve, such as the recent box office successes of “The Lost City” and “Everything Everywhere at Once”. But Hollywood and theater players alike need to dramatically improve on these trends as original ideas from Jordan Peele (“No”), Olivia Wilde (“Don’t Worry Darling”), Damien Chazelle (“Babylon”) and Billy Eichner (“Brothers”) prepare to arrive. to the big screen along with popular films such as “Thor: Love and Thunder”, “Jurassic World: Dominion” and “Avatar: The Way of Water”.

Aaron spoke last week at CinemaCon, the industry’s annual gathering of movie theater owners diverse About these hurdles, as well as high ticket prices for upcoming movies, and the reality of the company as a “m-share”.

The last time we spoke, vaccinations were newly introduced and blockbuster movies were few and far between. What is your position now on the state of the exhibition?

If you had asked me this question in April of 2020, when all theaters around the world were closed, I would have said it was a tough time. If you had asked me that question in December of 2021, knowing that the box office was down 90% in the first quarter, down 70% in the second quarter, down 50% in the third, and then 25% in the fourth, I’d say “We’re on the road to slipping into recovery. But we have a long time to go. When you look at the films coming from May to December, it’s one giant movie after another. And whether it’s Doctor Strange, Top Gun: Maverick, or Jurassic World Dominion.” – Right down to “Avatar” at Christmas – there’s a ton of big movies coming up over the next seven months. And that makes us at AMC very fans. If we’ve learned anything from “Spider Man: No Way Home”, the third biggest movie of all time, Which was released at the height of the omicron virus…If Hollywood releases movies that people want to watch, people will go out to theaters in droves.And Hollywood is about to release a lot of movies that people will want to watch.

For the past two years, we’ve been putting asterisks – “Good, in times of COVID” – on our box office ticket sales. Given “Spider-Man: No Way Home” and “The Batman,” can blockbuster movies begin to reap the potential they might have had in pre-pandemic times?

We’re about to find out. In 2022 we got off to such a slow start, not because people didn’t want to go to movie theaters but because there weren’t a lot of movies shown. This year’s box office should be around double the 2021 figure [$4.4 billion]. The box office of $8 or $9 billion is still lower than it used to be [pre-[pandemic] $10 million or more. Obviously we won’t hit $11 billion in 2022. My sense is that it will be a stronger box office in 2023 than in 2022. In what year do we go back to completely normal pre-pandemic levels? It’s somewhere between the second half of 2022 and the whole of 2024.

If studios release fewer films in theaters, does it hurt cinemas?

Hypothetically, if studios release fewer films, that could translate into fewer dollars in theaters. One option for us is to encourage studios to release more films. And you can be sure we’re having those conversations. Perhaps another to take a look at our new software. Last year we tried sports and concerts. There is also the Holy Grail. There are three major studios – Apple, Amazon, and Netflix – that do not release films theatrically. Maybe we can convince some of these people to take some of their films and put them in theaters first.

For “The Batman,” AMC charged customers about $1 to $2 more per ticket than other films running at the same time. How did the company benefit from that?

It was a huge success. We’re looking at our market share on “The Batman,” and obviously we’ve done a better job by charging a dollar premium. The price was only $1. It’s not like we charged double the price. There were a lot of requests that people were willing to pay.

AMC’s competitors, particularly Regal Cinemas and Cinemark Theatre, raised prices for “Spider-Man: No Way Home” ahead of “The Batman.” Was there a reason why AMC wanted to talk out loud about the price increase?

It’s very simple. We are a publicly traded company on the New York Stock Exchange. And when you do important things, it is your duty to speak about them publicly. As a company, we believe in transparency. We don’t want to hide what we’re doing. We don’t want to brag about what we do…but we don’t want to hide what we do. Why didn’t they talk about it, you have to ask them.

Should consumers expect a similar increase in Doctor Strange in the Multiverse of Madness?

The good news is that I like to follow the law. And US laws don’t allow me to talk about pricing up front. I’m only allowed to talk about retroactive pricing activity. I cannot make any general comment. Tickets will go on sale, and people will know what we’re charging.

Instead, will AMC explore options for producing art films or lower-cost films that have been in theaters for several weeks?

Same answer to a similar question. It’s illegal for me to talk about going forward with pricing. I can not guess. If you go back to the laws of supply and demand, which is the first thing it teaches you in economics class, it means that when demand is high, prices go up, and when demand is low, prices go down.

Do ticket prices have a big impact on attendance?

All I can say is that in “The Batman,” we know we’re better off charging a $1 premium. We have a lot of discount programs that we’ve been actively adopting: Discounts on Tuesdays; We have reorganized all of our daily pricing strategies in the past year; and A-list, our subscription program.

The company has taken bold steps by investing in Hycroft Mining and expanding its popcorn into malls. How did that pay off on AMC?

Popcorn is still in the works. We’ll give Orville Redenbacher a chance to get Orville money. But that won’t happen until the end of 2022. In terms of investing in Hycroft Mining, a gold and silver mining company in northeastern Nevada, look… We knew you wouldn’t think the movie theater company’s core competency was solar mining. But during the pandemic, we were very skilled financial engineers. We made a lot of money on Wall Street. To get AMC out of the pandemic, we identified a company that was facing an acute liquidity challenge. Its shares were priced near bankruptcy levels. And we knew that if we could help them raise some money, their stock would go up. Within two weeks, we helped them raise $195 million. Their stock immediately rose. So the investment thesis about why we’re doing this turns out to be correct. We are currently advancing.

Speaking of Wall Street, how do you balance keeping highly motivated retail investors happy while also being realistic about the company’s fundamentals?

It’s totally apparent. Nearly 4 million retail investors have joined our company. They own the majority of our stock. I don’t work with them [but] They are my boss, they are avid, passionate and passionate about our company. We communicate with them often as a company. Every week, I host shows for contributors in New York City and Los Angeles, and I’ll be doing more of that in 2022 across the United States.

We have paid them due respect. There were some professionals on Wall Street who looked down on them. They own our company, so we don’t underestimate them. We are looking forward to them. They know that AMC, as a company, and I, as their CEO, truly appreciate their passion for our company. Having said that, I am the CEO of a public company. I am always realistic in what I say in public. I don’t have to color things. Celebrate our successes. And I speak soberly about the challenges that we still need to overcome.

I’ve heard some stories of investors going to theaters in monkey costumes and demanding popcorn. What do you think that?

I smile and laugh.



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