Streaming services were once the enemy of cinema chains such as AMC Theatres, mostly because companies like Netflix didn’t believe in the value of the big screen. But for whatever reason (perhaps a desire to turn a profit), the attitude toward multiplexes has changed and tech giants like Apple and Amazon have committed to spending billions on theatrical movies. It’s a move that’s been widely embraced by exhibitors, who desperately need more films to fill their marquees.
“We certainly welcome their movies with open arms,” says Adam Aron, the CEO of AMC, the world’s largest movie theater circuit. “We will happily show anything they want to take to theaters.”
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It may take some time for Apple and Amazon to have enough product to debut these movies with consistency. Until then, AMC has a secret weapon in enticing audiences to the big screen with the highly anticipated sequel to its viral ad, starring Nicole Kidman.
“I’m not sure when we’re going to do it — this year or next year,” says Aron. “We’ll try to live up to your expectations when the time comes.”
Aron sat down with Variety at CinemaCon, the annual Las Vegas-based gathering of movie theater owners, with a passport inexplicably in the front pocket of his button down shirt, to discuss the obstacles facing the film industry, the company’s current debt levels and the status of Kidman’s next AMC commercial.
As CEO, what’s your No. 1 priority for AMC right now?
My No. 1 priority today in April of 2023 is exactly what it’s been for the last three years, which is to make sure I guide AMC through this hard pandemic and its aftermath. In March of 2020, every single one of our theaters were shut. Companies aren’t designed to have no revenue. We literally went from having $450 million a month of revenue to nothing in the span of one week. And ever since then, it’s been a dogfight to defy gravity and outlast this pandemic. So far, AMC has done that really well. I’ve thought for some time that the pandemic was going to be a five-year detour for our industry. And a month ago, we just completed the third year. We still have a year or two ahead of us before it’s just a bad memory.
Are you concerned about AMC’s current debt levels?
I’m not concerned at all.
Will it hurt the company’s ability to move forward?
I’m not worried about our debt at all. We’re in court in Delaware right now about a shareholder vote that would give us the ability to raise equity pretty much at will. I’m hopeful we can get through that process. When you add our ability to raise capital, along with a rising box office, I’m very optimistic about our future.
At one point you talked up Saudi Arabia as a growing market, but AMC has recently divested in the territory. What was the reasoning?
Because of the pandemic, we needed cash. Our Saudi partners were willing to buy out our stake in the joint venture. We wanted to have more cash. You’ve seen what happens to movie theaters that run out of cash. It’s a bleak story. And I’m absolutely committed to making sure that AMC never runs out of cash.
Having said that, when we started the effort in Saudi Arabia — not that I’m going to show you the contracts — but if you look at the joint venture contracts were drafted in 2018, we always envisioned that [eventually] they would manage the business and we would just become a licensor. Being able to bring some $30 million back to the U.S. to our treasury, it became an easy decision. We have not left Saudi Arabia. Our name is still on the door. It’s just that we’re the franchisor and not the manager.
Do you plan to divest in any other territories?
Just this weekend, I talked to somebody about adding a lot of AMC theaters in another country. But we’re not at a point yet where I can name which country that is. And we’ve been adding theaters in the United States. There are other movie theaters circuits we’re talking to in North America right now about possibly growing AMC by absorbing some or all of their theaters into our fleet.
Theater owners say a big challenge has been studios releasing fewer movies. What’s the ideal number of releases per year?
You just described the central problem of the movie theater industry. There were about 145 releases in 2019, and 70 to 80 in 2022. So it’s no surprise the box office was a fraction in 2022 of what it was in 2019. This industry has plenty of capacity. We can easily handle 140 or more movies going forward, just like we did in 2019. There’s no lack of screens. We could handle a lot more movies than we currently have. But the good news is that we’re going to get more movies. I think the wide release count in 2024 is going to be higher than 2023. And we know the release count in 2023 is going to be considerably higher than 2022.
What can movie theaters do to generate more attention for smaller, non-tentpole movies?
We spend a lot of time and effort on this. A few years ago, we created something called Artisan Films, which is a special designation we put on some smaller and medium-sized movies that we thought could build a real audience. In addition, we have greatly increased our outbound communication efforts to moviegoers, telling them what’s going to play this weekend. And we are gearing those communications based on your personal track record. So if you like horror movies, we talked about horror movies coming up. If you like rom-coms, we don’t talk to you about horror movies, we talk about rom-coms. We also created A-List, our subscription program, so that going to the incremental movie is free. And then we’re reminding some filmmakers that it’s not enough just to make the movie. You also need to market the movie.
Have you been in conversation with Apple and Amazon about their plans to bring movies to theaters?
Yes, and we’re thrilled that Amazon and Apple look like they’re going to embrace theaters as a distribution channel. At AMC, we certainly welcome their movies with open arms. As I said before, we have plenty of capacity. We’ve been in dialogue with both. Each of them has movies this year, but I’m expecting more movies next year.
Do you know the kind of movies they plan to make?
That’s a question you should ask them, not me. We will happily show anything they want to take to theaters.
Do you ever converse with filmmakers to let them know when their movie is doing well at AMC?
None that I want you to print, because some of them are confidential, private communications. There’s one specific I’ll share with you that’s not exactly what you’re expecting. I started in December of 2021 and by Friday night, I will have personally hosted 23 movie screenings where I actually watch with people in the auditorium. More often than not, the people who show up are AMC shareholders, who commonly brand themselves as Apes, and I talk to them for 20 to 30 minutes before the movie starts. After the movie ends, I stay around afterwards. We take selfies.
I saw you also sign autographs.
I sign some autographs if they want them. We have conversations. I get to talk to a lot of people about how much they’re enjoying movies. They’ll take pictures and tweet them, and I tend to retweet them. And then I’ve been known to send some of those to studio people or filmmakers and say, “Look how enthusiastic moviegoers are about your movie!” It’s a bit of a love-fest.
Does it make you feel like a celebrity?
I cannot explain why, but let’s just say that our shareholders who show up are enthusiastic about getting to talk.
The most important question: when does AMC plan to release the second Nicole Kidman commercial?
It’s being decided right now. I’m not sure when we’re going to do it — this year or next year. One version has been written, but whether that’s the one we make or not, I don’t know. We’ll all see it together. We’ll try to live up to your expectations when the time comes.
Did you watch the “SNL” parody?
I thought it was wonderful. I actually thought our commercial was better than their parody. But I’ll tell you how I decided whether I liked it or didn’t. If “SNL” had done that for any other theater chain, would I have been upset? The answer is, yeah. If they had done that for someone else’s movie theaters, I would have been crazed out of my mind.
Similarly, I don’t know if you were watching the Oscars, but the first gag in Jimmy Kimmel’s monologue was to Nicole Kidman, about how she’d been released from an AMC movie theater. That’s the highest compliment we can be paid. That says our commercial hit the American zeitgeist.
Do you still keep in touch with Nicole Kidman?
She’s happy to hear it. I’ll share this with you. On June 10, Nicole Kidman is being honored by the American Film Institute and getting its 49th Life Achievement Award. AMC is going to be a major sponsor of that gala in great tribute to the First Lady of AMC, Nicole Kidman. Becoming associated with her has been one of the smartest marketing decisions that I’ve been a part of for the last 40 years.
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