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In the latest blow to Netflix Inc., AMC Theatres, the biggest cinema chain in the world, said Tuesday it is launching a streaming service that will allow members of its loyalty program to rent or buy films and watch them at home, the first such offering from a cinema operator.
Starting today, the 20 million-plus U.S. households that have signed up to the company’s AMC Stubs program will be able to access about 2,000 films from every major studio. Later in the year, the service will be expanded to include films from AMC Networks’s AMCX, +0.29% IFC Films and RLJE Films. AMC Theatres will promote AMC Networks’ targeted streaming services, marking the first cross-platform marketing between the two companies. Those services include Acorn TV, Shudder, Sundance Now and UMC.
Customers can rent or buy films through the AMC Theatres AMC, +5.47% mobile app, Roku and SmartTVs with more services and devices to be added in the future.
“With more than 20 million AMC Stubs households, and with our website and smartphone apps already being visited hundreds of millions of times annually by movie fans, AMC Theatres is in a unique position to promote specific movies with greater personalization than has ever been possible before,” AMC Theatres Chief Executive Adam Aron said in a statement.
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AMC has agreements with every Hollywood studio to make select films available for rent or purchase, including new releases. Those will be made available after the traditional theatrical window set by studios has been observed. Consumers will be able to earn Stubs points that can be used for in-theater rewards.
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AMC shares rose almost 5% in early trade, while AMC Networks was down 1.2%.
The news is the latest threat to the dominance of Netflix NFLX, -0.02%, which has seen its stock fall 23% in the last three months as it awaits an onslaught of new competitors in the streaming world. Apple Inc. AAPL, +0.41% and Walt Disney Co. DIS, +0.78% are both set to debut streaming services in November that are cheaper than Netflix’s offering.
Comcast Corp.’s CMCSA, +0.45% NBCUniversal service and AT&T Inc.’s T, +0.81% HBO Max are due in spring 2020.
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Netflix, which will report its third-quarter earnings on Wednesday, is already competing with Amazon.com Inc. AMZN, +0.84% and Roku Inc. ROKU, +7.36%
AMC said late Monday that it has hired Sean Goodman, currently chief financial officer of Asbury Automotive Group ABG, +0.16% , as its CFO, replacing Craig Ramsey who is retiring on Feb. 28, in a long-expected move. Goodman has also done stints at Home Depot HD, +0.98% , Morgan Stanley MS, +1.44% and Deloitte & Touche in South Africa.
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Benchmark analyst Mike Hickey, who rates AMC a buy, said the U.S. box office has exceeded his expectations in the third quarter and expects it to benefit AMC when its reports its fiscal third-quarter earnings in early November.
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The box office rose 2.8% in the period, buoyed by releases including “Spider-Man,” “The Lion King,” “Hobbs & Shaw,” “Angel has Fallen,” and “It: Chapter 2.”
The analyst is expecting 5% growth in the fourth quarter buoyed by releases including “Joker,” “Gemini Man,” “Maleficent: Mistress of Evil,” “Terminator: Dark Fate,” “Doctor Sleep,” “Charlie’s Angels,” “Frozen 2,” “Knives Out,” “Jumanji: The Next Level,” and “Star Wars: The Rise of Skywalker.”
Netflix shares were down 0.9%.
AMC shares have fallen 15% in 2019, while the S&P 500 SPX, +1.13% has gained 19% and the Dow Jones Industrial Average DJIA, +1.15% has gained about 16%.
