AMC Theatres and Universal have made a deal that could change the way you see movies, whether it’s in the theaters or at home.
The new deal allows Universal to make its films available on premium video on-demand after three weekends in cinemas, or about 17 days total, the companies announced Tuesday.
The deal — which only covers AMC Theatres in the U.S. — gives AMC the chance to run the films for the peak weekends before Universal can take it to streaming and digital.
“The deal ... shatters the traditional theatrical window, a longstanding policy that has required studios to play their films on the big screen for nearly three months before making films available in the home,” according to The Hollywood Reporter. “The unprecedented move on the part of a mega-exhibitor has far-reaching implications for the film business — particularly amid the ongoing coronavirus pandemic and related theater closures — and is a major coup for Universal.”
What’s more, AMC and Universal will share the revenue from the on-demand releases, too.
Universal has been pushing the digital release in recent weeks considering the success of its animated film “Trolls World Tour,” which came out at the beginning of the coronavirus pandemic through digital release since movie theaters closed down.
In the immediate aftermath, NBC Universal CEO Jeff Shell said “Trolls World Tour” had so much success that the studio would release films in theaters and on digital release.
“The results for ‘Trolls World Tour’ have exceeded our expectations and demonstrated the viability of PVOD.”
AMC Theatres told Universal that it would no longer show Comcast or Universal films in their theaters. In fact, AMC Theaters chairman-CEO Adam Aron called the decision “unacceptable.”
“This policy affects any and all Universal movies per se, goes into effect today and as our theaters reopen, and is not some hollow or ill-considered threat. Incidentally, this policy is not aimed solely at Universal out of pique or to be punitive in any way, it also extends to any movie maker who unilaterally abandons current windowing practices absent good faith negotiations between us, so that they as distributor and we as exhibitor both benefit and neither are hurt from such changes.”
The National Association of Theatre Owners joined in on the drama, saying Universal “has a destructive tendency to both announce decisions affecting their exhibitor partners without actually consulting with those partners, and now of making unfounded accusations without consulting with their partners.”
But Snell never backed down. He doubled-down on the idea that the model for releasing films would change.
“The question is when we come out of this (pandemic), what is going to be the model? I would expect that consumers will return to the theaters and we will be part of that. And I also expect that PVOD is going to be a part of that in some way. It’s not a replacement, it’s going to be a complementary element. We’re just going to have to see how long that takes and where it takes us.”
“But the flip side is the majority of our movies, whether we like it or not, are being consumed at home. It’s not realistic to assume that we’re not going to change, that this part of the business isn’t going to change like all parts of the business are going to change.”
At the end of June, AMC appeared to warm to the idea of bringing Universal back into its theaters. Of course, the theater chain — which has been nearing bankruptcy — worried about releasing films too early from theaters, making their industry almost irrelevant.
“Our concern is that Universal said that once theaters reopened, they were going to try to take movies to the home and theaters at the same time,” Aron told CNN Business. “It wasn’t ‘Trolls’ we were concerned about. It’s the movies after ‘Trolls’ that we’re concerned about. And if they take movies to the home and theaters at the same time, they’re the ones who are changing the status quo and they would make it unprofitable for us to play Universal movies in our theaters.”
Now, it seems like the two sides have a deal, one that will offer people a chance to see new movies after three weekends in the theaters.
Movie theaters may not be an option for people with severe health risks as COVID-19 continues to run through the country. Once the pandemic ends, there still may be some caution from going back to theaters.
Allowing digital releases like this will give moviegoers a chance to avoid the theaters but still see new movies and provide some additional revenue from theaters. And it’s a sign that the theater industry is shifting.