By the end of the year, AMC customers will be able to pay for popcorn and movie tickets with bitcoin.
In an earnings call Monday, AMC’s chief executive Adam Aron confirmed that the biggest theater chain in the U.S. is wading into the cryptocurrency quagmire, making it the first major theater company to take the plunge. The move is less surprising considering that financial windfall AMC has enjoyed thanks to its explosive, Reddit-powered stock rally this year.
At the beginning of 2021, AMC’s shares traded for around $2. Its stock is now trading above $34, up nearly 1,500% year to date, according to MarketWatch. Much of that eye-popping gain has been fueled by the “memestock” frenzy the lifted Gamestock to similarly confounding heights.
“I’ve had to learn more in the past six months about blockchain and cryptocurrency than I learned about it in the entire decade before that,” Aron said on the call. “This increased knowledge has given me the confidence to tell you all today that AMC is hereby formally announcing on this call that by year end, we will have the information technology systems in place to accept bitcoin as payment for movie tickets and concessions if purchased online at all of our U.S. theaters.”
Aron said AMC would also begin accepting Apple and Google Pay, “since we had to do the IT programming to accept bitcoin anyway.” AMC did not immediately respond to a request for more detail about its cryptocurrency plans.
As of Tuesday morning, a single bitcoin was worth about 3,311 adult AMC movie tickets. AMC joins giants like PayPal, Wikipedia, Burger King, Subway and Microsoft in accepting the digital coin. Tesla CEO Elon Musk said the company would take bitcoin for its cars earlier this year, but reversed the decision after just two months, citing environmental concerns surrounding bitcoin mining.
An HSB survey published in 2020 found that 36% of small and midsize American businesses accept cryptocurrency. But the road to broad cryptocurrency adoption remains fraught with regulatory hurdles, volatility and consumer skepticism.
“This is still very contained consumer adoption of crypto and moves like this from AMC create more noise for the bitcoin market than actual transactions,” Dan Ives, managing director of equity research at Wedbush Securities, told The Post in an email. “Large ticket purchases are ideal for bitcoin down the road in a contained fashion, not a $12 movie ticket. “
Thirteen percent of Americans reported purchasing or trading cryptocurrency in the past year, according to a survey published in July from researchers at The University of Chicago.
Bitcoin has experienced wild popularity during the pandemic, as economic uncertainty and market volatility brought on by the coronavirus has pushed more people to consider alternative currencies. The digital coin, priced at less than a cent when it was created more than a decade ago, now has a market capitalization of more than $853 billion, according to CoinMarketCap.
Bitcoin’s rise has been marked by fierce volatility. The average bitcoin transaction fee – which rises and falls along with the coin’s value – is currently about $2.50, but it has swung as high as $60 in 2021. AMC did not immediately respond to a question about whether transaction fees would be passed on to customers.
AMC beat estimates with its earnings Monday, reporting $444 million in second-quarter revenue compared to the $19 million it took in at the same period last year. The company’s wild ride has helped it weather the apocalyptic impacts of the coronavirus on the entertainment industry, using sales of its shares to pay down debt and shore up its business. The company reported losses of more than $4.5 billion in 2020 as theaters across the nation shuttered.
Meanwhile, streaming boomed: worldwide subscriptions to video streaming services reached 1.1 billion in 2020, a 26-percent spike from the previous year according to data from the Motion Picture Association.
Many analysts have forecast that viewers, comfortable with their small screens, would not return to theaters, and that the direct-to-consumer model would be here to stay. The average U.S. household now spends $55 monthly on streaming and subscribes to 4.5 different providers, according to research from J.D. Power.
AMC’s shares rose more than 6.7% in reaction to the bitcoin announcement and its earnings.