Just a few months (in fact, exactly three months to the day) after the theatre chain proclaimed it would no longer play movies from the studio, AMC Theatres and Universal Pictures have signed a multi-year agreement that will allow the studio’s films to premiere on premium video on demand (including the theater’s own, AMC Theatres On Demand) within just three weeks of their theatrical debuts.
In the past, that timeframe traditionally lasted for three months, a time period that theater owners have said is crucial in order to prevent customers from simply skipping theatrical runs in favor of watching at home.
The pact is as unprecedented and game-changing as it is surprising, considering AMC’s hostile reaction to Universal’s releasing “Trolls World Tour” simultaneously on digital platforms and in the few theaters still open during the coronavirus pandemic. Lauding the success of that film’s straight-to-VOD release, NBCUniversal’s CEO Jeff Shell’s suggestion that the company may continue to simultaneously release some movies in theaters and on-demand led to the cinema chain cutting ties.
But it seems that’s water under the bridge, as this new agreement means gives studios unprecedented control in when and how their theatrical releases head to home entertainment platforms. Financial terms of the agreement haven’t been disclosed, but AMC’s CEO Adam Aron has said the company will “share in these new revenue streams,” presumably meaning that they also stand to get a cut of the money made on these new digital rentals.
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“The theatrical experience continues to be the cornerstone of our business,” said Donna Langley, chairman of Universal Filmed Entertainment Group. “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 said, “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.”
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This could all mean a number of things – it theoretically means that Universal’s blockbuster films such as the “Jurassic Park” films or the upcoming “Fast & Furious 9” could hit VOD after just three weekends. The more worrying implications are that mid-budget and independent (or just non-superhero) will be even more pushed aside due to the higher risk of betting on a theatrical run, limited to arthouse cinemas or digital only release. The deal as a whole also puts these smaller independent theaters in a weaker position than ever, unable to negotiate in the same way that a giant like AMC can.
It remains to be seen whether or not other major studios (and other cinema chains) will follow suit, seeing as Netflix already follows such a model and Disney more or less do whatever they want. In any case, cinemas aren’t open yet, and the coronavirus pandemic has (potentially permanently) altered the dynamics in the relationship between studios and theaters as well as cinema audiences themselves.
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Though national reopening of theatres has been planned for late August, it’s a plan that has already been delayed multiple times as cases continue to surge. It’s still unclear if customers will feel safe going to cinemas even when this does happen. Either way, this deal will certainly alter how studios handle the releases that have already been pushed back, as well as theatrical releases far into the future. But hey, we might get to see Vin Diesel have a supercar swing from a rope sooner than anticipated.
