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AMC Theaters will launch its own service for renting and buying digital films

AMC Theaters, the largest movie theater chain in the US, is launching an on-demand video service, according to The New York Times. The service will let customers rent or buy movies, much in the same way Apple’s iTunes Store and Amazon’s Prime Video have operated for years.

AMC Theaters on Demand, as it will be called, will launch tomorrow as an online store with approximately 2,000 films available, with new releases to be added after a standard theatrical run. Unlike the direct-to-consumer subscription streaming services that companies like Disney, Apple, Comcast (NBCUniversal), and AT&T (WarnerMedia) are preparing to launch, AMC’s is specifically video-on-demand (VOD).

Studios like Disney, Warner Bros., Universal Pictures, Sony Pictures, and Paramount have all entered deals with the theater chain to sell and rent movies — both new releases and older titles — once their theater run ends. Each film will cost between $3 and $5.99 to rent, and $9.99 to $19.99 to purchase.

The idea behind AMC Theaters on Demand is to bolster the chain’s main business venture: theater attendance. The company wants to capitalize on its AMC Stubs members, including its A-List subscribers that now pay around $20 a month for general access to new films, a model that was spurred by now-defunct MoviePass.

Yet there are also more than 20 million households who subscribe to AMC’s more general Stubs loyalty program, according to the Times. Offering those members additional benefits, including a free digital version of a movie they paid to see in theaters, is one way to introduce more people to AMC’s Theaters on Demand service, while also encouraging those same consumers to actually go to a theater showing.

More than 6 million tickets for Disney’s The Lion King were purchased through the Stubs program, the Times adds. Those people “will all get a personalized message from AMC saying that they can now enjoy it at home through AMC Theaters On Demand,” when the movie is digitally released on Tuesday, according to Elizabeth Frank, AMC’s chief content officer. Although it’s a new practice for AMC, other theater chains have practiced it. Cineplex, one of the top theater chains in Canada, has offered a similar program for years. AMC is the first major American chain to offer the program, though.

The streaming service comes at an interesting time for AMC and other Hollywood studios. The theater chain has butt heads with Netflix over carrying the latter’s original films, including Martin Scorsese’s most recent movie, The Irishman. Netflix, and often times other companies like Amazon, don’t want to comply with AMC’s 12-week theatrical window policy. The rule states that Netflix (and other streaming services) can’t stream a film until it’s played for 12-weeks exclusively in theaters. Netflix has never agreed to the terms, and has used smaller theater chains to play its movies in theaters for shorter windows, ranging from a few days to a few weeks.

Launching a video-on-demand streaming service with major studios’ backing helps AMC get into the digital market while also ensuring its ongoing relationships with the five major studios, as well as the value of a ticket stub, remains intact.

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