AMC's XL Theaters: A Strategic Gamble in the Fight Against Streaming?

In April 2025, AMC Entertainment made a bold move to counter the rise of streaming services by unveiling its first two Extra-Large Format (XLF) theaters in Kansas City. The AMC DINE-IN Studio 28 and AMC DINE-IN Prairiefire 17 now host XL auditoriums featuring screens at least 40 feet wide, paired with 4K Laser projection technology—a key component of AMC’s $1.5 billion Go Plan to redefine moviegoing. This marks the first U.S. rollout of a format already tested in Europe, where early results suggest strong demand for premium experiences. But can AMC’s gamble pay off in a market still struggling to recover from pandemic-era declines?

The XL Format: AMC’s Answer to Streaming

The XL initiative targets moviegoers craving a theater experience that can’t be replicated at home. With screens twice the size of standard auditoriums and laser technology for unmatched clarity, AMC is betting that audiences will pay more for immersive visuals. The format distinguishes itself from pricier premium large formats (PLF) like IMAX by offering a lower-cost, scalable alternative that still delivers spectacle.

By 2025, AMC aims to open up to 50 XL auditoriums nationwide, with long-term goals of 200–250 locations. This expansion is part of a broader strategy to compete with streaming by emphasizing comfort-driven upgrades—recliners, enhanced foodservice, and loyalty programs—that create a “can’t-miss” theatrical experience.

Financial Upside—and Downside

The XL rollout has already shown promise. On April 5, 2025, premium formats (including XL) accounted for 33% of total attendance during a record-breaking weekend, with AMC achieving its second-highest April box office since 2019. This suggests XL could drive incremental revenue through higher ticket prices and concession sales.

However, AMC’s financial health remains uneven. While theater performance is stabilizing, its media division (AMC Networks Inc.) reported a 11.7% year-over-year revenue decline in Q1 2025, dragging down overall results. Meanwhile, AMC’s debt load—currently over $875 million in senior notes—raises concerns about its ability to fund the Go Plan without straining liquidity.

Competing in a Crowded Field

AMC faces fierce competition. Rivals like Cinemark and Marcus Corporation are also upgrading theaters with premium seating and tech, while streaming giants like Netflix and Disney+ continue to poach audiences. AMC’s advantage? Its scale—900 theaters globally—and its multi-format strategy, which combines XL with established PLF options like IMAX and Dolby Cinema.

Yet AMC’s stock has underperformed peers this year, down 7.7% as of May 2025 versus a 16% drop for the sector. Investors remain wary of AMC’s reliance on blockbuster hits and its high debt levels.

Risks on the Horizon

• Execution Risk: Renovating theaters to XL standards requires precise timing and capital allocation. Delays or cost overruns could eat into margins.
• Content Dependency: XL’s success hinges on studios releasing tentpole films that justify large-screen viewing—a volatile variable in an era of uneven release schedules.
• Streaming Saturation: If audiences continue to shift toward home entertainment, even premium theaters may struggle to offset declining attendance (still 40% below 2019 levels).

Conclusion: A High-Stakes Bet with Potential

AMC’s XL theaters represent a compelling strategy to reclaim its edge in the theatrical space. The 33% premium attendance share in Q1 2025 and the $1.2 billion in annualized revenue from premium formats (implied by April’s results) suggest AMC could capitalize on demand for immersive experiences. However, the path to profitability remains fraught with debt, execution risks, and a fragile box office recovery.

Investors should monitor AMC’s Q2 2025 earnings for clues on how the XL rollout is impacting margins and attendance trends. While the format’s scalability could unlock growth, AMC’s ability to balance debt management with strategic investments will ultimately decide whether this gamble pays off—or becomes another chapter in its turbulent financial history.

In short, AMC’s XL theaters are a necessary move in a shifting landscape, but success hinges on execution and a box office rebound that’s far from guaranteed.