You are using an older browser version. Please use a supported version for the best MSN experience.

AMC Entertainment Chief Says He’s “Not Concerned” About Studios’ Early VOD Talk

Deadline logo Deadline 12/21/2016 David Lieberman
© Provided by Deadline

Adam Aron was virtually unknown in exhibition a year ago when Dalian Wanda Group picked him to run AMC Entertainment. Now the movie industry can’t ignore the exec who spent much of his career running tourism companies including Starwood Hotels and Resorts, Vail Resorts and Norwegian Cruise Line as well as the NBA’s Philadelphia 76ers.

With the closing this morning of AMC’s $1.1 billion acquisition of Carmike Cinemas, Aron, 62, runs the biggest theater chain in the U.S., passing Regal Entertainment. And after last month’s $1.2 billion purchase of UK-based Odeon & UCI Cinemas, AMC also became the biggest exhibition company in the world.

That makes good on his vow in January to turn AMC into “a very important player in the world of movie distribution.”

As he says today, “everybody’s learning in this industry that when I say something, I actually do mean it.”

Deadline briefly caught up with Aron today to find out what else he might have in mind as the exhibition industry prepares for a potentially volatile new year. Here are his thoughts, edited for length and clarity:

DEADLINE: Are you concerned about recent comments from studio executives [including Fox and Time Warner] who want to offer new movies on premium VOD during the window when theaters usually have them exclusively?

ARON: I’m not at all concerned. I’m sure we’ll be at the table in discussions with studios. Beyond that, today’s a day to celebrate the AMC-Carmike merger, and we’ll worry about windows and all of the other issues next week and next month and next year.

DEADLINE: Carmike is a major investor in cinema ad sales company Screenvision, and the Justice Department required you to sell most of AMC’s stock in its chief competitor: National CineMedia. You said that you might use the proceeds for more acquisitions. What do you see?

ARON: AMC has grown mightily in 2016. It’s a big world. We are now in eight countries. Last I checked, there are more than eight countries on the face of the earth. So there’s a lot of virgin territory for AMC as we plan out our future – especially in Europe. We already have a large presence as the largest exhibitor in Europe. Yet we’re only in seven countries in Europe. There is an opportunity for us to continue to grow.

DEADLINE: How about the United States?

ARON: Sure, we’ll look at any opportunity that makes commercial sense. The odds of a huge transaction like the Carmike transaction are non-existent. There is no one else of Carmike’s size other than Regal and Cinemark and of course we’re not going to acquire Regal or Cinemark, and they aren’t going to acquire us because the antitrust implications would be too profound.

But if there are smaller circuits out there in the United States that are interested in joining into the AMC family, we’re happy to take a look. This is not the sole objective of AMC. But it’s certainly part of the landscape that’s out there for us. We could also use the proceeds from the NCM stock sale to delever our balance sheet and reinvest in our own theaters, including the AMC, Carmike, and Odeon theaters.

DEADLINE: Last year the Justice Department stopped NCM and Screenvision from merging. With AMC-Carmike, did the Justice Department preclude NCM and Screenvision from returning with a merger plan? The Trump administration might be more hospitable.

ARON:  It wasn’t discussed between us and the Justice Department and frankly it’s none of our business. You should ask that question of NCM or Screenvision or the Justice Department. … I don’t want to comment on it because I don’t want to become an expert on what goes on in the competitive landscape between NCM and Screenvision.

DEADLINE: You told analysts yesterday that AMC will introduce a three-brand strategy. Can you explain how AMC is going to be restructured?

ARON: I’m definitely going to answer that question, but I’m going to do it a month from now because we want to unveil that brand strategy to our own theater general managers first. They come together at the end of January for their annual meeting. There’ll be 661 of them there; all of the theater general managers in the United States from the AMC and Carmike circuits. We’ll share it with our own people first.

DEADLINE: Carmike was known as a champion of alternative content such as concerts and sports events. Will you carry on with that?

ARON: We think we already are big in alternative content at AMC. We’re a part owner of Fathom Events which has a wide array of programming at our theaters. In addition, we have something called AMC Independent where we work hard to chase independent films, the kind that play in art houses. So AMC theaters have more than Hollywood blockbusters, although our bread and butter is Hollywood blockbusters. I think you’ll see us becoming the most important force for Hollywood blockbusters, and you’ll see us become the most important force for alternative content as well. That’s what happens when you’re the largest player in the industry.

DEADLINE: Bud Mayo had been leading Carmike’s alternative content effort. Is he still with the company?

ARON: I think he decided to retire. I know that he did not choose to come with AMC.

DEADLINE: Let’s talk about the state of exhibition in the U.S. Is it a zero sum game between AMC, Regal and Cinemark — or can you expand the pie?

ARON: I think the pie is expanding dramatically. If you look at the last five years, the domestic box office has set an industry record in four of the five years. It looks to us as though calendar 2016 will again be a record year. So that’s five of the last six years have been record years for industry box office. Anyone who knows movies well thinks that the 2017 and 2018 film slates are very strong. So we’re optimistic that we’ll see growth.

I will tell you that I personally have spent an enormous amount of time in 2016 looking at how AMC can grow the pie for studios and for AMC. That’s much more important to me than how we carve up a stagnant pie.

DEADLINE: How do you see it growing?

ARON: Look at what we’ve done in relaunching the AMC Stubs program, which has doubled its membership in 2016 to 5 million members. Look at the brand new $11 million web site and smart phone apps we launched on November 30, which are much more attractive and do a much harder job of selling movies than our previous web site, and our previous smart phone app. We’re trying to grow the pie. When you look at the fact that we’ve renovated fully a third of our theaters with plush recliner seats — we’re going to renovate another third of our theaters in the next two years. All these moves are aimed at making movie going more compelling for movie goers so more and more consumer dollars are directed this way.

DEADLINE: You’re getting more dollars from people who go. But attendance has not been growing.

ARON: No, but we bank dollars. We don’t bank bodies.

DEADLINE: So is it a zero sum game because there’s a static number of people going and you have to get them to your theaters and to spend more?

ARON: You’re looking at the business in a different way than I look at the business. It seems to me that there are three variables that will determine our revenues. One is how many people come to our theaters. Two is what they pay for movie tickets. And three is what they spend on concessions. And we’re interested in growing all three of those metrics.

DEADLINE: So you think the total number of people going to movies can increase.

ARON: Absolutely.

DEADLINE: What do you believe will be the biggest movie for exhibition in 2017?

ARON: Casablanca. [pause] That was meant to be a joke. We have a lot of partners in the Hollywood community and if I were to give you one movie I would probably alienate people from a dozen different studios and distribution companies. So it’s better for me to wish them all well and hope that every studio is vying to put out the most successful movie of 2017.

DEADLINE: Have we reached a saturation point in superhero films? Looking ahead, is that something you’d like to see less of?

ARON: Hollywood’s in the business of making movies. We’re in the business of showing movies. I think you’ve got a lot of very smart and talented people at the studios trying to figure out what films will play well to consumers. I don’t intend to substitute my judgment for their’s. They’ll make them. We’ll play them and do our best to create great theatrical experiences. Together as partners I think we will all succeed.

AdChoices
AdChoices

More from Deadline

AdChoices
image beaconimage beaconimage beacon