Universal Pictures and AMC Theaters have lifted the bitter flair and signed a multi-year contract that will allow studio films to be premiered on demand within three weeks of their theatrical debut.
A pact that will undoubtedly send waves across the exhibition industry could change the way films are sold and distributed. Rival studios are likely to start trying to give participants more flexibility when deciding when and how their theatrical releases can enter home entertainment platforms.
The financial terms of the agreement were not disclosed. However, in a statement, AMC CEO Adam Aron said the company would “share these new revenue streams”, which means it will reduce all the money earned from these digital rents. Universal has the ability to make its movies available only on demand, which means the rental costs around $ 20 for popularity. She can’t sell movies or rent them for lower fees at a asking price of $ 3 to $ 6 until they’re three months after their debut in movie theaters.
While under this new deal, Universal could theoretically debut other Jurassic World or Fast & Furious on-demand contributions within 17 days of their debut, they are likely to have longer exclusive theatrical performances. Instead, the studio has the opportunity to take advantage of its new freedom with mid-budget tickets, comedies, and horror movies that may not be as solid in movie theaters. But if smaller movies perform better than expected on the big screen, Universal can wait to provide digital rental services. Universal will also have Minions: The Rise of Gru, Halloween Kills with Jamie Lee Curtis and a 355 spy thriller with Jessica Chastain, Penélope Cruz and Lupita Nyong in its upcoming code.
The deal puts an end to the war between the studio and the world’s largest theater network, a chilling relationship that began after AMC promised to stop showing Universal films after last spring’s studio decided to open the Trolls World Tour simultaneously on digital platforms and Few theaters were still open during the coronavirus pandemic.
On Tuesday, both sides turned out beautifully: Universal praised the vitality of the big screen and AMC welcomed the decision as a willingness to innovate.
“Theater experience continues to be a cornerstone of our business,” said Donna Langley, president of Universal Filmed Entertainment Group. “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.”
Aron, for his part, said: “Focusing on the long-term health of our industry, we would like to point out that as restaurants thrive, even if all homes have kitchens, AMC is very confident that a lot of cinema-goers will come to our theaters. in the post-pandemic world. As people enjoy leaving home, we believe that the mystical getaway and magical community experience offered in our theaters will always be convincingly appealing, as well as the fact that it is made by our large screens, great sound and large seats, not to mention the enticing aroma of ours. . perfectly prepared corn corn. “
For many years, Universal and other studios pushed for the language of the window industry to shrink between the film’s theatrical performance and its home entertainment debut. Traditionally, that frame of exclusivity has lasted for 90 days, and theater owners have found it critical that customers not choose to skip cinemas and wait for the film to appear in their homes. However, studies have found that those concepts are difficult. They say the films earn most of their box office revenue in the first few weeks of release and, waiting three months for the films to debut on demand and on other platforms, demand that they spend more money to promote and re-introduce them to the public .
However, COVID-19 changed the dynamics of power in the relationship between studios and theaters. The virus has left most U.S. cinemas closed, and large-scale national renewal plans have been delayed over and over again as cases have increased on the South and West coasts. Theaters don’t have the leverage they once did and are looking for ways to make money at a time when it’s not clear if customers feel safe going to the theaters.
At the same time, Universal has achieved continued financial success with its strategy of bypassing theaters at a time when much of the country is still home. During the pandemic, platform outsourcing was thriving, and Universal estimated that five million people rented the Troll World Tour in the first few weeks and earned about $ 100 million in sales. Empowered by these individuals, she also debuted this summer in Judd Apatow’s comedy The King of Stethen Island for premium on-demand and released films such as Emma, an adaptation of Jane Austen from her indie label Focus on-demand. excretion was shortened due to coronavirus closure.
In the past, Universal was perhaps the most aggressive, pushing the boundaries of the theater’s release window and trying to find ways to offer its films to home entertainment users earlier, lurking in the exhibition community with its discontinued plans to offer Ben. Stiller and Eddie Murphy’s comedy Tower Heist on demand a few weeks after its debut in 2011. In this case, Universal supported its activities after theaters threatened to stop showing their films.
In the coming weeks, the two companies will begin discussions on international distribution agreements in Europe and the Middle East, served by AMC.
As cinemas across the country struggled to resume operations, AMC was caught up in concerns about its liquidity. Even before the pandemic closed its headquarters for four months, the company was heavily indebted to costly upgrades to its sites and bids for competitors such as Odeon and Carmike Cinemas. At one point, AMC looked at the threshold for filing for bankruptcy, but recently renegotiated its debt terms, which helped clean up its balance sheet.