Summary
– AMC Theatres has announced that it will add Virtual Reality attractions to its theaters.
– Despite the hype, this is not a reason to buy the stock.
– However the price is right, the dividend is high and it is worth buying anyway.
– I am long.
I used to own some shares in AMC Entertainment Holdings, Inc (NYSE:AMC) and have just bought in again. The last time I owned it, it was selling for about two and a half times the current price. The stock has been beat down by a lot of negative press about the future of movie theaters generally. It has been characterized as “dead money” more than once, usually by executives or others with a pro-digital media bias who forget that modern cinema projection is also digital. As Robert J. Lenihan, AMC’s President of U.S. Programming, declared-referencing Mark Twain:
“Reports of our death are greatly exaggerated.”
He said this as a panelist at “The Future of Film” session at the Digital Hollywood conference in Los Angeles on October 11, 2017. He went on to describe how AMC will roll out Virtual Reality attractions to pull audiences back into its theaters.
On September 26, 2017, AMC announced a strategic partnership with Dreamscape Immersive, a start-up doing location-based VR entertainment. The press release, quoting AMC president Adam Aron, said:
“Dreamscape entertainment ushers in an exciting new world in virtual reality and reminds us through its trail-blazing technology that we really are living in the 21st Century. A dazzling future is now at hand.”
As VR hype goes, this is actually pretty mild. If I seem skeptical, it’s because I’ve been here before, even as the new generation of VR mavens seems determined to ignore or forget the past.
In the 1980s and ’90s I made my living as a technical trade magazine journalist. I was a contributing editor at CyberEdge Journal and at Advanced Imaging magazine, and I covered the nascent VR industry as it rode that wave of hype to its ultimate destruction. But the dream of immersive location-based entertainment never died. Virtual Reality and the Exploration of Cyberspace, my best-selling book, was published in 1993.
I know a thing or two about VR.
Source: Seeking Alpha