- AMC Theatres and Universal Pictures announced a deal on Tuesday that would shorten the theatrical window for Universal movies to 17 days, after which the movies could move to premium video-on-demand services.
- The deal ends a feud between AMC and Universal that began in April, when NBCUniversal CEO Jeff Shell said that future Universal movies would be released to both theatres and digital platforms.
- The agreement raises plenty of questions, notably whether other theatre chains and movie studios will follow suit.
- Jeff Bock, the Exhibitor Relations senior media analyst, is confident that they will and said that a dynamic change for the industry is long overdue.
- Still, Shawn Robbins, the chief analyst for Box Office Pro, said that the deal isn’t likely to impact major tentpole releases like Universal’s “Fast and Furious” movies, which drive huge profits at the global box office.
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After a three-month feud, Universal Pictures and AMC Theatres, the largest theatrical chain in the world, have reached a deal that could have major ramifications for the future of the movie business.
AMC and Universal announced on Tuesday that the much-debated theatrical window would shorten to 17 days, meaning Universal movies would be able to debut on premium video-on-demand services 17 days after premiering at AMC theatres. The previous theatrical window was between two to three months.
It’s a dramatic shift for a system that Jeff Bock, the Exhibitor Relations senior media analyst, characterised to Business Insider as “archaic.”
The agreement doesn’t mean that consumers could wait 17 days and get a standard-priced rental instead of going to a theatre, however. PVOD digital rentals at services like iTunes and Amazon are typically priced at $US20 a pop for new releases. Because of this, AMC is likely not as worried about a huge chunk of customers seeing PVOD as a deal relative to theatres, assuming the public health crisis of the coronavirus pandemic eventually dissipates.
The feud between AMC and Universal began in April after Universal’s “Trolls World Tour” hit PVOD platforms on the same day that it was scheduled to open in theatres, which have largely been closed across the US since March due to the pandemic. The movie’s apparent success sparked praise from NBCUniversal Jeff Shell, who said that “as soon as theatres reopen, we expect to release movies on both formats.”
This didn’t sit well with AMC Theatres CEO Adam Aaron, who sent a letter to Universal Filmed Entertainment Group chair Donna Langley refusing to play future Universal releases in any of the chain’s theatres.
But now that the two parties have reached an agreement, it raises plenty of questions, notably:
- What does this mean for other major chains like Regal? Will they follow the same path?
- If they don’t play ball, does that change Universal’s PVOD strategy?
There’s no clear answers to those questions right now, but Bock is confident that other theatre chains and movie studios will get in line.
“Universal and AMC’s deal basically forces the hand of the other studios and exhibitors to play a similar game, which could result in the most dynamic change the movie industry has seen since its inception,” Bock said.
Shawn Robbins, the Box Office Pro chief analyst, wasn’t as eager to declare such a seismic change for the industry given the uncertainty of the agreement. He also noted that Universal doesn’t have any major tentpole releases on the theatrical calendar until next year, so the impact of the deal may not be felt right away.
“The studio acknowledges the importance of the theatrical window, so it’s difficult to imagine them taking a film like ‘Fast 9’ or ‘Jurassic World: Dominion’ onto PVOD after just two or three weekends, particularly given the lack of international deals on the PVOD front and the heightened risk of piracy for any film once it’s available to stream,” Robbins said.
That’s an important point given that, according to The Wall Street Journal, AMC would collect a share of the revenue Universal movies earn from digital rentals.
Tentpole movies in Universal’s “Fast and Furious” and “Jurassic World” franchises drive huge profits at the global box office. Universal, and other studios if they follow suit, would likely evaluate movie releases on a case-by-case basis to determine what is suitable for an extended theatrical run and what should move quickly to digital.
After all, studios have already been doing this during the pandemic with theatres closed, with “Trolls World Tour” being the movie that really kicked things off. Studios have largely committed to theatres by rescheduling movies, sometimes indefinitely, such as Disney’s “Mulan.” But other movies have moved straight to streaming or digital, such as Warner Bros.’ “Scoob!”
Whatever happens, Bock thinks that movie theatres need to evolve to survive, especially after the pandemic hit the industry so hard.
“Streamlining the industry to cater more to consumer’s tastes is long overdue,” he said.
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