Universal & AMC Theatres Make Peace, Will Crunch Theatrical Window To 17 Days With Option For PVOD After

After AMC CEO Adam Aron publicly threatened that he would never play Universal movies as along as the studio had a plan for simultaneous theatrical-PVOD releases like Trolls World Tour, the world’s No. 1 exhibitor and the Hollywood studio have broken bread with the following multi-year agreement:

Universal and Focus Features releases will play at AMC theaters for a 17-day exclusive theatrical window. After that time Universal has the option to make such titles available on PVOD platforms, including AMC Theaters on Demand. In the coming weeks, the two companies will begin talks surrounding international distribution agreements in the countries in Europe and the Middle East served by AMC. One of Universal’s big pics this year abroad is MGM’s Bond movie No Time to Die being released in November. From what I hear, if a movie is performing like gangbusters at the box office, i.e. like a Get Out, Fast & Furious movie, Illumination title or Jurassic World, Uni won’t simply cut and run and put the feature on PVOD. They’re apt to live the green of the theatrical run out.

Rival distributors are already calling the deal “seismic”. “It’s what we’ve been waiting for,” said one studio boss who foresees other studios falling in line and hammering out similar terms with AMC, and the other big chains, Regal and Cinemark.

Commenting on the agreement, Adam Aron said, “AMC enthusiastically embraces this new industry model both because we are participating in the entirety of the economics of the new structure, and because premium video on demand creates the added potential for increased movie studio profitability, which should in turn lead to the green-lighting of more theatrical movies.”

That means AMC is getting a cut of the PVOD revenues. The deal brings to mind AMC and Paramount’s deal on 2015’s Scouts Guide to the Zombie Apocalypse and Blumhouse’s Paranormal Activity: The Ghost Dimension. The difference with that deal is that when screens dropped below a certain hundreds level, Paramount could have the next home window kick in, with those theaters, AMC and other indies, sharing in the monies from that stream.

This latest deal is strictly between AMC and Universal.

Universal’s traditional windows for electronic sell through (EST) and video on demand (VOD) remain unchanged.  “The companies reached this agreement based on their shared commitment to a mutually beneficial long-term partnership that is focused on serving consumers worldwide, while preserving and enhancing the theatrical experience,” reads the release.

Said Donna Langley, Chairman, UFEG, “The theatrical experience continues to be the cornerstone of our business.  The partnership we’ve forged with AMC is driven by our collective desire to ensure a thriving future for the film distribution ecosystem and to meet consumer demand with flexibility and optionality.”

Vice Chairman and Chief Distribution Officer of UFEG Peter Levinsohn, who led negotiations on behalf of the studio, added, “Universal’s commitment to innovation in how we deliver content to audiences is what our artists, partners and shareholders all expect of us, and we are excited about the opportunity this new structure presents to grow our business.  We are grateful to AMC for their partnership and the leadership they have shown in working with us to reach this historic deal.”

The truce between AMC and Universal comes in the wake of Aron responding to NBC Universal CEO Jeff Shell’s victory lap in the Wall Street Journal back in April, in which the studio boss heralded the PVOD success of Trolls World Tour (at a near $100M at that point in time) and exclaimed  “As soon as theaters reopen, we expect to release movies on both formats,” indicating a day-and-date theatrical-VOD shift.

Aron further expounded, “This multi-year agreement preserves exclusivity for theatrical viewing for at least the first three weekends of a film’s release, during which time a considerable majority of a movie’s theatrical box office revenue typically is generated.  AMC will also share in these new revenue streams that will come to the movie ecosystem from premium video on demand.  So, in total, Universal and AMC each believe this will expand the market and benefit us all.  Focusing on the long-term health of our industry, we would note that just as restaurants have thrived even though every home has a kitchen, AMC is highly confident that moviegoers will come to our theatres in huge numbers in a post-pandemic world.  As people enjoy getting out of their homes, we believe the mystical escape and magical communal experience offered at our theatres will always be a compelling draw, including as it does our big screens, big sound and big seats not to mention the alluring aroma of our perfectly prepared popcorn.  Universal and AMC have partnered in bringing stellar movies to moviegoers for a full century.  With this historic industry changing agreement, together we will continue to do so and in a way that should drive success for us both.”

In response to the COVID-19 big exhibition shutdown, Universal was the first studio to put their current theatrical releases on PVOD (Blumhouse’s The Hunt, Invisible Man and Focus Features’ Emma) to generate cash at an unprecedented economic time. During the week in which the big circuits were closing down, the studio announced that the Easter weekend release of Trolls World Tour would be both theatrical and on PVOD, which promptly drew screams from NATO and exhibitors. The studio continued to put pics on PVOD and in whatever theaters were currently open, i.e. Focus Features The High Note and Irresistible. The Judd Apatow directed Pete Davidson comedy The King of Staten Island, initially for theatrical release, went straight to PVOD.

Despite the uproar, Universal did demonstrate to movie theaters that they’re faithful to the traditional window by moving their big 2020 event pics to next year, specifically Illumination’s Minions: The Rise of Gru and F9.  Instead of re-dating them constantly, which is what many major studios are unfortunately left doing as it has become harder to reopen cinemas during the pandemic, Uni has saved costs and resources in the process by simply just delaying its tentpoles.

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