AMC Theaters and Universal Pictures Strike a Deal That Allows Theatrical Films to Debut on VOD Early
The way new films are going to be distributed is about to change in a big way. It’s a change we saw coming and a change that the industry is being forced to make because of the COVID-19 pandemic.
As you know, there was a lot of back and forth between Universal Pictures and AMC Theaters while they were in a bitter feud with each other after the studio started to release its films on VOD early or bypass the theatrical release altogether, as they did with Trolls: World Tour. AMC Theaters wasn’t happy with it, but Universal Pictures continued to work with them to try and work out some kind of deal.
Well, they’ve come to an agreement and have signed a multi-year deal that will allow the studio’s films to premiere on premium video-on-demand within three weeks of their theatrical debuts.
This is definitely going to reshape the way that movies are marketed and distributed. There’s also no doubt that other studios are going to start pushing for theater exhibitors to give them more flexibility with their film releases and determine when and how these movies can make their way onto home entertainment platforms.
I know a lot of people that are going to be happy with this. For me, as long as I have the opportunity to watch the movies I want to see in the movie theater, I’ll be happy. This is the best of both worlds for those that don’t like going to movie theaters, and for those who love it. I will always support the movie theaters!
As far as compensation goes, AMC’s CEO Adam Aron said that the company will “share in these new revenue streams.” This means that the theaters will also get a cut of any money made on VOD rentals. It’s also explained that Universal “only has the ability to put its movies on premium on-demand, meaning the rentals that go for roughly $20 a pop. It cannot sell films or rent them for lower on-demand fees, in the $3 to $6 range, until three months after they debut in cinemas.”
Most of the films that Universal will take advantage of with this deal will be the mid-budget movies that they produce. When it comes to big-budget upcoming films like Jurassic World: Dominion and Fast and Furious 9, they will most likely have a longer run in theaters. There’s going to be some flexibility with this stuff. It’s explained:
Even though Universal, under this new agreement, could theoretically debut the next “Jurassic World” or “Fast & Furious” installments on premium on-demand with 17 days of their debut, they will likely have longer exclusive runs in cinemas. Instead, the studio has the option to capitalize on its new freedom with mid-budget fare, comedies, and horror movies that might not have as robust runs in cinemas. But if smaller movies perform better than expected on the big screen, Universal can wait to put it digital rental services.
Some of Universal’s other films include Minions: The Rise of Gru, Halloween Kills, and the spy thriller 355. Donna Langley, chairman of Universal Filmed Entertainment Group said in a statement:
“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.”
Aron also added:
“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 theaters 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 theaters 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.”
What are your thoughts on the deal that Universal and AMC have made and the ramifications that it will have on the movie industry?
Source: Variety