Universal Pictures has struck a historic deal with cinema exhibitor AMC Entertainment Holdings Inc. that allows the production studio to make its films available for premium video-on-demand after just 17 days of play in U.S. theaters.
The deal is a radical shift from the long-accepted industry standard 90-day window before studios can make their movies available for home viewing. It leaves just three full weekends for AMC’s U.S. theaters to enjoy exclusive showing rights to Universal’s films. With about 1,000 theaters and 11,000 screens across the globe, AMC is the largest movie exhibitor in the world.
Also included in the agreement are titles from Focus Features, a division of NBCUniversal.
The companies said in a statement they “will begin discussions surrounding international distribution agreements in the countries in Europe and the Middle East served by AMC,” in the coming weeks.
The deal marks the end of a public conflict between Universal and AMC regarding video-on-demand’s potential to undercut the traditional theater model.
In April, Universal made headlines when it debuted children’s title “Trolls World Tour,” as a $19.99 rental on home video-on-demand platforms, forgoing the theater experience entirely as most cinemas had closed due to the coronavirus.
The film was an immediate hit, grossing more than $100 million in home rentals in the North American market in its first three weeks. Pleased with the movie’s performance, NBCUniversal Chief Executive Jeff Shell told the Wall Street Journal, “The results for ‘Trolls World Tour’ have exceeded our expectations and demonstrated the viability of PVOD. … As soon as theaters reopen, we expect to release movies on both formats.”
His sentiment struck a nerve with AMC Chief Executive and Chairman Adam Aron in suburban Kansas City, Mo., who sent a letter to Universal Filmed Entertainment Group Chair Donna Langley in Universal City.
“It is disappointing to us, but Jeff’s comments as to Universal’s unilateral actions and intentions have left us with no choice,” the letter said. “Therefore, effectively immediately AMC will no longer play any Universal movies in any of our theaters in the United States, Europe or the Middle East.”
The deal represents a middle ground between distributor and exhibitor.
In a statement announcing the deal, Universal Filmed Entertainment’s Langley said: “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.”
However, some exhibitors are displeased with the deal’s implication that the future of moviewatching may increasingly take place in the home and less so in theaters.
Mooky Greidinger, chief executive of Cineworld, which runs the world’s second-largest theater chain in Regal Cinemas, told Deadline, “We do not see any business sense in this model. … We are not changing our policy with regards to showing only movies that are respecting the theatrical window.”