AMC Theatres calls MoviePass subscription price 'unsustainable'

AMC Theatres (NYSE:AMC) on Tuesday publicly criticized MoviePass’s plan to allow paid subscribers to see one movie in theatres per day for $9.99 per month.

Referring to MoviePass as a “small fringe player,” the Kansas-based movie theatre chain said its resell program is “not in the best interest of moviegoers, movie theatres and movie studios.” AMC added that it is considering legal options to block the use of MoviePass at its theatres.

“In AMC’s view, that price level is unsustainable and only sets up consumers for ultimate disappointment down the road if or when the product can no longer be fulfilled,” the company said in a statement. “AMC also believes that promising essentially unlimited first-run movie content at a price below $10 per month over time will not provide sufficient revenue to operate quality theatres nor will it produce enough income to provide filmmakers with sufficient incentive to make great new movies.”

AMC said its average movie ticket sold for $9.33 in its most recent fiscal quarter.

“From what we can tell, by definition and absent some other form of other compensation, MoviePass will be losing money on every subscriber seeing two movies or more in a month,” the statement added.

MoviePass’s decision to cut its subscription fee from $14.99 to $9.99 was announced at a difficult time for AMC. Shares of the movie theatre chain have plunged more than 35% since the start of the month after its quarterly earnings missed expectations.

“People really do want to see movies more often,” MoviePass CEO Mitch Lowe told FOX Business’ Maria Bartiromo of Mornings with Maria on Tuesday. “The problem is that the price and risk of seeing a bad movie is high. So people tend to wait until it comes out on video, or streaming services.”