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The new AMC Theaters & Universal VOD agreement could radically change the film business



Universal Pictures was one of the cinema studios that responded quickly to the COVID-19 pandemic, forcing its films to use premium VOD early on and land in hot water with AMC Theaters, the world’s largest cinema chain. But after months of public talk, the two companies have reached a multi-year deal that should be happy for both parties – and that shows a seismic change in the way the films are distributed.

The conflict began in March, before we imagined how long public spaces such as movie theaters would be closed when Universal was launched. Troll World Tour at the same time it was to be shown in theaters.

The AMC saw this shortening of the traditional theater “window” – the period during which films are played only in theaters – as a direct insult and announced in revenge that it would no longer show universal films. (This proved to be a rather insignificant threat, as U.S. cinemas have remained closed since March.)

On Tuesday, the two companies announced that they had agreed on a new theater window for just 17 days or three weekends so that Universal’s film could be sold using premium VOD. This significantly shortens the previous window, which was closer to 90 days for physical home video shows and about 75 days for digital shows.

Here’s what it means in practice: Another film, Jurassic Park, Jurassic World: Domination, is currently scheduled to debut in theaters in 2021. June 11 If you assume theaters are open, you can contact your local multiplex to see the findings of the Jurassic World trilogy – or you can just wait until June 28 and watch it on TV at home for rent for $ 19.99.

Owen Grady (Chris Pratt) encounters three dinosaurs in the Jurassic world

Owen Grady (Chris Pratt) in 2015 maritime world.
Image: Universal Pictures

Despite these abbreviated theatrical performances, Universal’s business model is still heavily dependent on movie theaters. 2015s maritime world earned more than $ 1.67 billion at the global treasury. It also shows the importance of the three-weekend window. During the first three release weekends maritime world he raised $ 500 million at the local box office, more than 76% of his potential $ 652 million, following a theatrical performance that ended five months later.

“Theater experience continues to be a cornerstone of our business,” said Universal Pictures chairman Donna Langley in a press release. “The partnership we have established with AMC is driven by our collective desire to secure a prosperous future for the film distribution ecosystem and to respond flexibly and selectively to consumer needs.”

While this new window may seem catastrophically shorter for AMC theaters, in the long run it is probably positive. The old theater window, which was closer to six months back in the mid-2000s, was created as the home video market approached in the 1980s to prevent studios from releasing copies of the film on VHS, DVD, and more. while he was still playing in theaters.

But it was also based on the idea that films have long tails at the box office, still making money two or three months after their premiere in theaters. These days, box office shows are usually delivered on the first few weekends of their release. They are quickly replaced by other films, often the same studios that created the previous hit.

Because of this new acceleration, the 70-90 day exclusivity window really makes no sense. Many of the films will end up in a dead zone where they were no longer in theaters and could not be released on VOD or Blu-ray. In other words, for almost two months, none of them made money. This new agreement should help to solve this problem.

Under an agreement with AMC Theaters, Universal can release the film on top-quality video-on-demand (PVOD) platforms for $ 19.99 if it spends three weekends (at least 17 days) playing only in theaters. AMC will also reduce these PVOD sales, which is revenue it could use desperately to reopen a huge question mark in the U.S. at the theater.

“AMC will also share these new revenue streams that will enter the movie ecosystem from premium video on demand,” said Adam Aron, CEO of AMC Theaters. “So overall, Universal and AMC believe it will expand the market and benefit us all.”

There is no word on exactly how AMC will share the PVOD market – other than through its AMC Theaters on Demand program, which will be one of many universal digital homes. So far, no other film studio has reached an agreement on coordinated theater windows with AMC, and Universal has not announced a partnership with any other major theater chain, such as Regal Cinemas. However, with the fall of this first domino, it is possible that other messages will appear in the near future.


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