Today, AMC Entertainment Holdings, Inc. is known as one of the hottest stocks in the market, beloved by meme traders. But the company’s origins are decidedly more humble.
AMC was founded by Edward Durwood, a vaudeville performer. After his group disbanded, he bought a theater in Kansas City.
The year was 1920. Durwood was determined to enter the nascent movie business.
The tiny company grew, and in the postwar era, AMC created the first multiplexes. It was even first to offer reclining seats with cup holders, now de rigueur at theaters everywhere.
I was fascinated to learn of this history while digging into the Wall Street Journal’s weekend feature on AMC.
What struck me most was the company’s history of innovation. And AMC continues to innovate today, despite the headwinds it faces from high rents and substantial debt.
Much like Durwood entering the movie business at its beginning, AMC is taking advantage of new trends like cryptocurrencies and the popularity of the UFC. It is the only theater to accept crypto payments or screen the sought-after fights.
I think AMC’s best chance for a strong future lies in embracing and doubling down on that history of innovation. Here are some moves for them to consider:
1) Sell non-fungible tokens (NFT’s), rather than just giving them away as promotional items.
AMC has a powerful meme trader following. That group has substantial overlap with the crypto community.
AMC could also split the proceeds with the owner of the IP (such as Disney), a win-win proposition.
2) Screen Netflix content. Many Netflix subscribers would probably like to see their favorite movies and shows on the big screen.
But aside from a few very limited releases, customers are generally out of luck. This could be a huge source of exciting new content for AMC.
Meanwhile, Netflix gets to partner with a company that has more screens than any other.
3) Offer more extensive food and even alcohol.
Many upscale theaters offer restaurant-style meals, providing a major source of new revenue. Why stop with popcorn?
Alcohol could also be a massive new revenue stream with very high margins and less equipment needed than a restaurant. Licensing will be an issue, but other theaters have done this successfully.
Here’s hoping AMC will continue to innovate for another 100 years!
P.S. My one bone to pick with the WSJ article is its contention that there is no evidence of naked short selling. Persistent, large fails to deliver fly in the face of that claim, although they have moderated recently.
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