After months of confusion, constantly postponed openings and uncertainty for the future, at least one aspect of the current apocalyptic film industry seems to have been cleared up: The beef between AMC Theatres and Universal Pictures has been put to bed. The two companies had been in conflict ever since the VOD release of Trolls: World Tour back in March, with AMC stating that it wouldn’t display any Universal releases. That turned out not to matter much, given the pandemic that kept pretty much all movie theaters closed, but the result of the spat is huge: A sweeping change to the traditional system of 90-day exclusivity for theatrical exhibition.
The companies have announced a new agreement, one that will apply specifically to Universal’s films in AMC Theaters, which will states that movies from Universal and Focus Features will play for at least three weekends, or 17 days, in AMC Theatres before they can be released on premium VOD platforms. That’s a huge reduction from the previous window of 90 days, meaning that you’d theoretically be able to rent or buy some Universal features within three weeks of them debuting in theaters. In exchange for that loosening of the exhibition window, “AMC will also share in these new revenue streams that will come to the movie ecosystem from premium video on demand,” according to Adam Aron, CEO of AMC. The theater chain will essentially be getting a cut of VOD, in this instance, but full details of the agreement haven’t been released.
“The theatrical experience continues to be the cornerstone of our business,” said Donna Langley, chairman of Universal Filmed Entertainment Group. “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.”
This is obviously a huge upending of the system that has been place for theatrical distribution for decades, and it’s fascinating that this deal applies ONLY toward Universal properties at the moment, suggesting that all the other studios will have to negotiate with AMC directly if they want similar treatment. Likewise, it’s not clear how other theater chains, such as Regal, will feel about a studio like Universal releasing its films to VOD after only a few weeks, given that they won’t be in on the revenue sharing like their competitors at AMC. This deal feels like the first in a series of many that will transform theatrical distribution as we know it, helped along by the transforming factor that is the coronavirus pandemic. It could also be a potentially devastating development for smaller independent or second run theaters, which had relied on showing films later in the former 90-day exhibition window.
“This presents a significant evolution of the exhibitor-studio relationship, but one that seems to acknowledge compromises on both sides in an effort to keep things harmonious,” said Shawn Robbins, chief analyst at Boxoffice.com. “The ability for a major theater chain to reap some benefits from PVOD releases could offset some of the loss of a long theatrical window, but the expectation here is that Universal still recognizes the importance of those longer runs for films doing well at the box office. If managed smartly, this could be a win-win type of precedent for many players, but it’s something we’ll have to see unfold in the coming years and reassess at a later point in time.”