This week is off to a good start for two of the leading names in entertainment. AMC Entertainment (NYSE:AMC) has announced it will be offering perks to users who subscribe to Disney+. The streaming arm of the Disney (NYSE:DIS) empire has worked hard to gain its footing amid the streaming boom. But now potential customers will have another incentive to sign up, as AMC gears up to offer exclusive benefits to the platform’s subscribers.
Since AMC CEO Adam Aron tweeted about the partnership this morning, both AMC stock and DIS have been rising. As of this writing, the popular meme stock is up more than 3% for the day while its digital investor army celebrates this news. DIS has only risen 0.16% so far, but it appears to be on an upward trajectory.
This isn’t the first time the two companies have joined forces. On Aug. 28, 2022, they staged Disney+ Day, offering popular Disney film screenings at a discounted price. The event did not serve to boost AMC stock, but that is likely because it only lasted for one day and did not attract national attention. However, this new partnership has the potential to generate positive market momentum for both companies. Let’s dive into what AMC stock apes and DIS stock investors alike can expect.
What This Means for AMC Stock
AMC apes have been in typical form since this news broke this morning. To summarize, they are happy about the partnership, regarding it as a growth opportunity for AMC stock. Company CEO Adam Aron announced it in an enthusiastic tweet, highlighting some important aspects of the deal:
Disney and AMC do huge movie business together. And I have said for years that the consumer’s voracious quest for content allows both movie theatres and steamers to thrive. So I am thrilled that tens of millions of Disney+ subscribers now get perks — exclusively at AMC Theatres! pic.twitter.com/4DDI8KYKRv
— Adam Aron (@CEOAdam) September 12, 2022
There’s no denying that AMC is offering some perks that will certainly tempt Disney+ subscribers. At only $8 per month for ad-free streaming, the platform is one the less expensive options. As competitors like Netflix (NASDAQ:NFLX) continue their forays into incorporating ads, platforms without them will continue to tempt viewers.
While it’s true that Disney+ is highly geared toward younger audiences, programs such as “The Mandalorian” have helped the platform remain competitive in a crowded market. Now, AMC is giving cinema lovers another reason to subscribe in the form of special screenings. But that’s not the only reason that investors should be paying close attention to this deal.
In his tweet, Aron notes that “the consumer’s voracious quest for content allows both movie theatres and steamers to thrive.” This calls to mind something important. Since the Covid-19 pandemic changed how viewers consume digital entertainment, theater and streaming companies have been at odds. When streaming services such as HBO Max began showing popular blockbuster releases, many wondered if viewers would ever return to theaters. Even as the world returns to pre-pandemic trends, the question remains as to what the future of cinema looks like.
Coming Soon
According to Aron, the future of cinema looks just fine, despite the recent misfortune of other theater chains. The AMC CEO sees an opportunity to build a bridge between his industry and the sector that threatened to run his company into the ground.
In June, Fortune made the argument that theaters and streaming services would need to “cooperate” if both were going to survive. Aron is the first theater CEO to recognize this and to formulate a plan. He has given both DIS and AMC stock the opportunity to grow by working together and creating incentives for consumers to patronize both their businesses. This could be the catalyst the AMC apes have been waiting for.
On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
