AMC to boycott future Universal films over distribution disagreement
posted Saturday May 2, 2020 by Scott Ertz
With movie theaters closed thanks to the COVID-19 lockdown, movie studios have had to make big decisions about the future of their films. Many studios have moved the release dates for their blockbusters into the far future, altering their timelines. Most notable has been the Marvel studios releases, some films being pushed over a year past their release dates. Other studios have adjusted their release styles instead. The biggest alteration was for Trolls World Tour.
The film was scheduled to release in theaters just after the lockdown began. But, Universal decided to forego the theater and release the movie directly to premium video on demand (PVOD), renting the film for $19.99. As a family movie, this rental price is lower than a trip to the theater and it allows everyone to enjoy it in the safety and comfort of their own home. A win-win for families for sure, but what about for Universal? As it turns out, the move worked wonders - possibly exceeding the box office gross it would have had if it had premiered in theaters. It definitely exceeded the take form the original movie in 2016, taking in more in three weeks of PVOD than the original did in 5 months of theater showings.
And therein lies the problem. It was far more lucrative for Universal to forego the theater and go direct to PVOD. Theaters, which are already in trouble because of months of lost revenue, do not want to hear that their business model is not good for the studios which make the films that keep them going. However, Universal recognizes that some films are simply made for the big screen, while others can thrive on a small screen. As such, the company has said that it will evaluate its release of future films, potentially breaking the longstanding tradition of the box office window.
This window is the gap between the theatrical exclusivity and additional release platforms. There is no legal requirement to maintain this window, but it has been around for a long time. Removal of the window would mean Universal might release movies in theaters and PVOD at the same time, immediately adjacent, or any other combination that they see fit. This did not sit well with the CEO of AMC, Adam Aron. In a letter sent to Universal chairman Donna Langley,
Effectively immediately AMC will no longer play any Universal movies in any of our theaters in the United States, Europe or the Middle East.
Don't expect this grandstanding to last, however, as this will do far more damage to AMC than it will to Universal if the last few weeks is any indication. That will become even more important as reports indicate that theaters, including AMC, might file bankruptcy following the lockdown.
