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Going to the movies in America could soon come at a premium — if you want the best seats in the house.
In February, AMC Entertainment Holdings Inc. launched the “Sightline” initiative, which adjusts the cost of a movie ticket based on the location of the seat in the theater, similar to pricing for concerts and sporting events. Seats in the front row will cost a bit less, while seats in the middle-center sections will cost more. First seen in New York, Chicago and Kansas City, Sightline is expected to roll out to all U.S. locations by the end of the year.
“It’s an attempt to fill up the theaters a little bit more and give people more price flexibility, but the primary impact will be to grow AMC’s loyalty memberships,” said Alicia Reese, vice president of equity research at Wedbush Securities. AMC Stubs members receive access to buy certain seats through Sightline.
Americans, as a whole, are skeptical. A new Morning Consult survey found that about half of U.S. adults (51%) believe the seat-based pricing model is inappropriate, compared with 36% who say it’s appropriate. More than half (54%) also said they would not pay an extra $1-2 for a more desirable theater seat.
Younger adults, however, were more accepting. A slim majority of Gen Zers (54%) and 46% of millennials said pricing schemes like AMC’s are appropriate, while majorities of both groups said they’d be willing to pay a few bucks more for a theater’s best seats.
A better understanding of the variable pricing model
Following the Sightline announcement, AMC was immediately met with backlash. Actor Elijah Wood tweeted that the pricing model “penalizes people for lower income,” while some on social media suggested a boycott of the country’s largest theater chain.
Though Morning Consult data does suggest that Americans would have some financial concerns should the variable pricing model become widespread, it doesn’t appear to show broad animosity toward the initiative, especially among younger generations and frequent moviegoers.
Reese said AMC could have done a better job at clarifying that customers don’t have to pay the extra fee if they become a Stubs member, but the bigger problem lies in the perception that AMC is price gouging, and trying to get that extra penny at the expense of customers. “This may cause some moviegoers to opt for a different theater if they have one in their market,” Reese said. “Every company, AMC included, has to tread lightly when making the shift to tiered pricing.”
Morning Consult asked AMC for comment and was directed to a series of February tweets from Chief Executive Adam Aron, including one that stated they will “carefully monitor reaction by moviegoers during the test.”
The March 17-19, 2023, survey was conducted among a representative sample of 2,203 U.S. adults, with an unweighted margin of error of plus or minus 2 percentage points.
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