AMC Entertainment Holdings Inc (NYSE:AMC) is threatening legal action over MoviePass’ new subscription price.
AMC says that it is currently in talks to determine if it can opt out of the subscription service that MoviePass is offering. The theater chain says that the price for the service won’t be enough to support theaters or filmmakers.
The statement from the company comes after MoviePass announced that it is lowering its monthly subscription to just $9.95 per month. This will allow subscribers to see a movie every day of the month.
“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 theater chain said in a statement.
AMC argues that MoviePass won’t be able to keep the new subscription service running due to the losses that it will suffer. One movie at AMC costs $9.33 per ticket. This means that subscribers would only have to see two movies per month for MoviePass to suffer a loss.
AMC also says that it will no longer be offering discounts on tickets to MoviePass. The company says that it believes the new subscription price from MoviePass is likely part of an effort for it to get bigger discounts from theaters.
The theater chain says that this doesn’t mean it is opposed to subscription service. Just that the price MoviePass is offering is much too low.
AMC stock was up 3% as of Wednesday afternoon.
As of this writing, William White did not hold a position in any of the aforementioned securities.
