Universal Pictures and AMC Theatres have ended a months-long feud over the distribution of the studio’s movies in both theaters and on premium VOD services. The battle, which began in April with Universal’s decision to premiere Trolls World Tour on PVOD instead of waiting for a theatrical release, had AMC CEO Adam Aron vowing at one point to ban all Universal product from AMC screens.
According to Deadline, films released under a new multi-year agreement between the world’s biggest exhibitor and one of its largest content producers will have a 17-day exclusive theatrical window at AMC facilities, after which Universal is free to make the title available on PVOD services, including AMC’s own AMC Theatres on Demand.
Universal reportedly has the option to keep a film on AMC screens after the 17 days are up if the picture is performing exceptionally well, and let it stay until the theatrical window has run its course. AMC gets a share of the PVOD revenues as well, with the company noting that most of a film’s box office earnings are generated in those first three weekends covered under the deal.
AMC and Universal will also hold talks in the weeks ahead over similar international agreements for the theaters that AMC owns in territories like Europe, the Middle East and more.
Aron said in a statement, “AMC enthusiastically embraces this new industry model both because we are participating in the entirety of the economics of the new structure, and because premium video on demand creates the added potential for increased movie studio profitability, which should in turn lead to the green-lighting of more theatrical movies.”
Universal chairperson Donna Langley stated, “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.”
Vice Chairman and Chief Distribution Officer of Universal Peter Levinsohn added, “Universal’s commitment to innovation in how we deliver content to audiences is what our artists, partners and shareholders all expect of us, and we are excited about the opportunity this new structure presents to grow our business. We are grateful to AMC for their partnership and the leadership they have shown in working with us to reach this historic deal.”
The hot war between AMC and Universal began back in April after Universal decided to release Trolls World Tour on PVOD following the worldwide shutdown of movie theaters due to the COVID-19 pandemic. The experiment was deemed a success, and as Trolls neared $100 million in online revenue, NBCUniversal CEO Jeff Shell hinted that a same-day release in theaters and on VOD for future films–even after the pandemic had ended–might be the path forward for the studio.
That drew a sharp rebuke from Aron at AMC and other exhibitors, with Aron saying at the time, “AMC believes that with this proposed action to go to the home and theatres simultaneously, Universal is breaking the business model and dealings between our two companies.” He vowed that no Universal films would play in AMC outlets unless a new agreement was reached.
Universal acted quickly last spring in the wake of the pandemic and the subsequent shutdown of all movie theaters, placing then-new releases like The Hunt and The Invisible Man immediately on PVOD as other studios followed suit. Universal and Focus have since also issued movies like You Should Have Left, Irresistible, and The King of Staten Island via the same platforms.
But the company did defer to the eventual reopening of physical theaters as well by moving event fare like the ninth Fast and Furious adventure and Minions: The Rise of Gru out of 2020 completely and into next year. Its next big release is Nia DaCosta’s Candyman, due out for now on Oct. 16.
AMC and Regal announced plans earlier this week to begin reopening theaters in mid-to-late-August, after several false starts and pending new coronavirus developments.
Two things remain to be seen: whether Universal can hammer out a similar deal with other major chains like Regal (the just-announced agreement is between Universal and AMC only) and if the other major studios follow suit with arrangements of their own. If the other studios propose similar agreements, and the exhibitors are open to them, this could potentially change the way we watch movies permanently.
In other words, with the precedent set today by Universal and AMC, the possibility now exists that if you don’t feel safe going to see Christopher Nolan’s Tenet on Labor Day weekend in theaters, you might be able to just wait and see it three weeks later on demand–if the exhibitor and Tenet distributor Warner Bros. Pictures can cut a deal.