AMC Entertainment Chief Talks Netflix’s ‘Crouching Tiger’ Sequel, MoviePass Trial and Theater Innovations

Imitation may be the sincerest form of flattery, but AMC Entertainment CEO Gerry Lopez could do with a little less praise.

The country’s second-largest theater chain is investing more than $600 million over five years to outfit its locations with reclining seats and alcoholic beverage service. It’s a strategy that most of AMC’s major rivals are embracing as they look for ways to entice audiences to get off their couch, turn off their computers and e-readers, power down their smartphones and hit the multiplexes.

“I don’t need to be this flattered,” Lopez jokes. “It doesn’t fill my ego… The reality is the history of our sector and our industry is that people copy the pants off of each other, and it can be annoying as hell.”

AMC has already introduced what it calls its second-generation recliner — chairs with more settings that also take up less room, meaning that the company will not have to sacrifice as many seats in order to offer customers greater comfort. In the past, outfitting theaters with luxury seating has meant sacrificing two thirds of the chairs. Lopez also stresses that other AMC programs such as reserved seating and a rewards program that gives customers $10 back for every hundred they spend help the company stand out from the pack.

“It’s not just better seating,” said Lopez. “It’s all those things we do around the seating to make it a better experience. We think that’s going to be trickier to replicate than someone just dialing up the local La-Z-Boy dealer.”

The amenities helped AMC trump quarterly projections this week. Despite an industrywide box office slump last year and declining admissions, AMC bested estimates on the strength of record concessions sales, much of it related to its alcoholic beverage service.

Things are looking up after 2014’s box office dip. The exhibition industry leader is confident that 2015 will be a record-breaking year for the movie business. Ticket sales are already running more than 7% ahead of the year-ago period on the strength of hits such as “American Sniper” and “Fifty Shades of Grey,” and Lopez is bullish on a summer and holiday season that brings new installments in the “Jurassic Park,” “Star Wars” and “Avengers” franchises.

“There’s no way the year doesn’t go right through the $11 billion mark,” Lopez said, predicting that that the business will pass that barrier for the first time in history. “You have movies that appeal to broad audiences. There’s hardly a month between here and December where you don’t look at a movie that’s coming out and say, ‘Oh wow, that thing could be a blockbuster.'”

AMC may be salivating at the slate of sequels and comic book movies to come, but the exhibition industry still faces galvanic challenges. It’s not just the popularity of video games and new technologies. Studios and movie companies have shown a greater appetite of late to play around with when, where and how they release movies.

After terrorist threats prompted Sony to cancel “The Interview” and then refashion it as a simultaneous video-on-demand and theatrical release, some entertainment industry analysts predicted it was a sign of things to come. More movies will bypass theaters entirely or couple their bigscreen release with a home entertainment debut, they argue. Lopez isn’t buying it. He notes that “The Interview” may have done more than $40 million worth of business on home entertainment platforms, but it will still likely lose money because the studio spent tens of millions marketing the picture and recouped only $6 million theatrically.

“People keep saying shorter windows are coming, but I can’t find the economic rationale,” said Lopez. “It’s not like studios haven’t tried it. I like to keep an open mind, but show me the money. It ain’t there.”

The showdown over the “The Interview” wasn’t the only one between exhibitors and movie companies over the sanctity of a theatrical release window. Netflix’s plans to release a sequel to “Crouching Tiger, Hidden Dragon” in Imax theaters at the same time that it debuts on streaming services left most major chains threatening a boycott.

The picture is being produced by Harvey Weinstein and brings back star Michelle Yeoh, but will not be directed by Ang Lee, the maestro behind the first “Crouching Tiger, Hidden Dragon.” AMC indicated it would not show the film when an announcement was made, and Lopez didn’t alter that initial stance, saying that the details remain murky.

“These many months later, we still don’t know what the deal is,” he said. “We don’t know anything about the movie other than it’s coming and it’s coming in August.”

“There’s been no proposal, just a bunch of headlines,” he added. “You don’t have the same storytellers, the producers, the director. It’s hard to believe it’s not a specialty product that’s made for video, but good luck to them.”

AMC is taking one cue from Netflix. It’s experimenting with launching a subscription service and has partnered with MoviePass, a ticketing startup, to allow users in Boston and Denver to see a movie a day for monthly memberships that run between $30 to $35. Lopez is pleased with the pilot program and may expand it to other cities.

“I’m a convert to the subscription model,” he said. “Six years ago, I thought the last thing people need in their lives is another monthly bill. But in entertainment specifically, if you look at HBO or Showtime or Sirius, subscription is the key to their success. We need to give it a shot and figure out a way to make it work rather than list all the ways it won’t work.”

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