In a summer when global pandemic has plagued the movie industry with a rash of theater closures, turning soundstages into ghost towns and infecting the global filmmaking and distributing ecosystem with job losses, AMC and Universal have agreed to roll up the window. That is to say, America’s largest theater chain and one of Hollywood’s five major studios have agreed to put aside their well-publicized differences to strike a historic deal permitting Universal’s movie releases to stream on paid video-on-demand platforms a mere 17 days after they are shown in theaters.
Such a move dramatically shortens the so-called theatrical “window”: the 70-day to three-month span between when a film typically arrives in multiplexes and when the powerful film-exhibition industry has permitted the movies to move onto digital platforms such as premium video, cable, or streaming services. Under the agreement, AMC — the world’s biggest theater chain, which teetered near bankruptcy this year but recently re-collateralized billions of dollars in debt to avoid Chapter 11 — will share in revenue from the studio’s paid video-on-demand rentals, although specific details have not yet been announced.
In addition to shattering all precedent at a time when Hollywood is operating in a blind panic, uprooting the release dates of megabudget popcorn movies such as Tenet and Mulan almost weekly in real-time response to spiking COVID-19 infection rates and continuing theater shuttering, the agreement has wide implications for the film biz, with the potential to fundamentally reorder how, when, and where moviegoers see major titles going forward. The deal also establishes a new profit-sharing model intended to bolster the exhibition community at a cultural inflection point when theaters are facing existential peril from the so-called “streaming wars.”
Under the deal’s multiyear, U.S.-only terms, when a tentpole release like, say, Minions: The Rise of Gru arrives in wide release on July 2, 2021, fans will have the option of watching the animated sequel in theaters or waiting almost three weeks to either rent it or buy it (films will not be available on NBCUniversal’s new OTT service Peacock). Prior to Tuesday when the deal was announced, such a theatrical release and PVOD drop could not peacefully coexist. Back in 2011, when Universal experimented with offering its comedy-thriller Tower Heist on video on demand three weeks after its theatrical bow, several of America’s largest theater chains announced they would ban booking the film in retaliation. But amid the new normal, Universal could theoretically keep Minions at the multiplex beyond the newly allotted 17 days in addition to making it available online. And exhibitors will share the wealth whether fans buy tickets or watch the film on a television, tablet, or phone.
In a statement, AMC Theatres chief executive Adam Aron contextualized the deal as a kind of catalyst that will galvanize movie production up and down Hollywood. “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,” he said.
Easy enough to forget then that in March, Aron announced that his company would effectively ban all Universal releases from its theaters after the studio made a surprise announcement that the animated tentpole Trolls World Tour would skip its planned theatrical debut and become available straight to PVOD. From there, NBCUniversal CEO Jeff Shell poured salt on the wound by publicly announcing that Trolls had hauled in a surprisingly robust $100 million from paid video rentals.
“The theatrical experience continues to be the cornerstone of our business,” Universal’s chairperson Donna Langley said in a statement. “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.”
But industry observers were quick to note that the AMC-Universal agreement was not a one-size-fits-all sweetheart deal. Matt Goldberg, senior editor for Collider and president of the Southeastern Film Critics Association, noted that the deal raises more questions than it answers. Will Universal (and its art-house subsidiary Focus Features) films only play at AMC theaters? “Why would Regal want to show Emma if it’s going to be on VOD in 17 days?” “And does this mean that other studios try their own partnerships? Can you only see Disney movies at Cinemark? Can you only see Sony movies at Regal?”
Kevin Jagernauth, former managing editor of the Playlist, further pointed out that it took writer-director Bong Joon Ho’s Best Picture Oscar–winning Parasite 19 weeks in theatrical release to build up to playing in 2,000 theaters. “This is devastating news for mid-size and indie studios,” he wrote.