According to published reports, Amazon is interested in buying Landmark Theatres.
This shouldn’t come as a surprise after the $13.7 billion Whole Foods deal, one of Amazon’s most notable recent acquisitions, plus Amazon’s huge push for video content in recent years.
But, while Amazon needs physical locations to do a great job selling perishable groceries, does it really need that same presence to bring people movies and TV?
Here are three reasons why Amazon would want to buy a movie theater chain.
1. Prime Timing
Given the recent problems connected to MoviePass, this could be a great time for Amazon to consider adding a similar subscription movie service benefit to Prime.
The data-driven aspect of the MoviePass model made a lot of sense, but the company simply couldn’t absorb such short-term loss. Amazon can.
Amazon is already a data-driven company that puts its customers at the center of everything. Everything it builds is based around solving customer pain points.
With its vast well of user data, collecting even more data on Prime members would further allow it to target advertising for products and other services.
On the flip side, Amazon could use the data from its 100 million existing Prime members to custom-tailor added movie benefits to Prime memberships.
Amazon wants to dive deeper into original content to compete with Netflix. Owning a theater chain could add to that experience. Maybe Amazon would add movie perks for Prime members like heavily discounted ticket prices and affordable concessions.
2. Movie Theaters Can Offer a Prime Experience
Amazon has made an incredible impact in the film business through Amazon Studios.
The company’s “Manchester by the Sea” drama scored Oscar wins last year for Best Actor and Best Original Screenplay. It was the first film from a streaming service to be nominated for a Best Picture Oscar.
While Prime Video is a huge reason people sign up for Prime, what all its original content lacks is a big screen experience. Imagine if Landmark’s loyalty program became integrated into Prime and only members could enjoy their favorite Prime content at theaters in a way that’s just not possible at home.
By bringing Prime benefits to the movie theater industry, through exclusive access to certain features or discounts, Amazon could entice even more consumers to its 100-million strong premium loyalty program.
Just as Whole Foods customers enjoy Prime benefits, Amazon would be able to offer movie theater experience benefits to existing Prime members as well.
People do sign up for loyalty programs to get discounts, but they also want exclusivity. So, this would not only be a great opportunity to offer discounted tickets and concessions with a Prime membership, but also things like members-only movies, special seating, and VIP parking.
3. Movie Theaters Are Prime Real Estate
Amazon clearly has plans to merge the digital and physical worlds when it comes to retail.
It paid $13.7 billion for Whole Foods not only to get grocery right, but also as a physical space to offer Amazon products and services. For example, the Amazon Echo Dot was the top selling product at Whole Foods during the 2017 Thanksgiving weekend.
Landmark Theatres operates 53 theaters in 27 cities including New York, Philadelphia, Chicago, Los Angeles and San Francisco. That’s a lot of key places to get Amazon products into the public’s hands in the real world.
In addition to just pushing Amazon products, these locations could offer pickup of orders and drop-off of returns. They could even feature its own private label food brands at the concession stands and incorporate its cashier-less checkout technology like at Amazon Go stores.
Most importantly, it would be another opportunity for Prime to enhances the lives of its members which is what keeps them renewing membership.
Filling the House with Prime Members
For Amazon, the strategy has always been simple and straightforward. Figure out the pain points and take them away. It began with its ability to truly listen to its customers.
That’s why the company constantly uses data to improve the lives of Prime members by constantly rethinking the program benefits.
Consider that Prime had about 28 million members in 2014, and you can see the astonishing growth in the past four years. So many people enjoy the value in Prime and are willing to pay for those benefits.
Amazon has already spent billions a year on movies and TV content because it encourages shoppers to sign up for Prime and keeps them renewing year after year. At the end of the day, purchasing Landmark Theaters would just be another way to get more people into the Prime ecosystem.
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ebbo helps brands achieve their customer loyalty goals with full-service, end-to-end solutions and also creates original educational content straight from the experts to help loyalty marketers stay on the cutting edge of customer engagement.