On today’s earnings call for the No. 1 financially challenged exhibitor AMC, CEO Adam Aron took the high road in not damning Disney for their recent seisimic-shifting choice to take Mulan to Disney+ instead of theaters where the streaming service is available.
“You might thing I’m disappointed that Mulan is moving, but AMC has no bigger friend than Disney. They provided us with more content last year than other studio in the world. As both companies do businesses, we will thrive,” said Aron.
“Disney just announced earnings. Just like AMC, they’re under duress. They are under pressure too and at some point need to monetize their slate. We’ll benefit from Disney titles with or without Mulan. We understand what they did,” he continued.
“Our biggest reaction to the Mulan announcement, is how much it reaffirms our wise decisions last week (with the Universal PVOD deal) to take the risk and sign on to PVOD because right now Disney’s choice under the current world order are two choices: Take it to the home or they take it to theaters. They can’t do both. Under PVOD, they could take it to PVOD and theaters at least with that 17-day lag.”
“I’d like to give them an opportunity to do an ‘and’ and not an ‘or. We’d make far more money on Mulan if it was released to our theaters then to PVOD, especially if we got a cut than if Mulan went to straight to the home and us not benefiting from it. Some of our competitors are are anxious about this change. Change is difficult for some to cope with.”
In regard to any potential hazards in the circuit’s Universal deal which entails a 17-day theatrical window for films, with an option for PVOD thereafter, Aron sees none. The studio isn’t allowed to market a feature going on PVOD, until after it’s 10th day of release in theaters. And again, not all films will go to PVOD.
“We think we’ll be compensated if they (movies go to the home,” said Aron.
“We would need for the incremental to be very small for us to be ahead of the game if cannibalization is going to come. We’re getting paid for everyone who watches at home and we’re getting a meaningful chunk of that revenue…We modeled this at high cannibalization rates, and we come out just fine. We modeled this very carefully and gone through a tremendous level of analysis and believe we’ll be ahead of the game,” said Aron.
Aron believes that this plan will entail more movies to be greenlit in the future….but NBCUniversal Jeff Shell said on last week’s earnings call for the conglom that the deal enables the studio to continue making movies at big budgets, not necessarily more movies.