A film needs to run in theaters before AMC and Universal strike deal goes digital


Still from the “Trolls World Tour”.

Universal

The feud between AMC theaters and Universal Pictures ended with the video on-demand release of “Trolls: World Tour” in March.

On Tuesday, the two companies announced a deal that would see AMC once again show Universal films on the big screen and provide Universal with a smaller theatrical window, so that it could make its titles available on-demand soon.

As part of the deal, Universal and Focus Features must play movies in theaters for at least three weekends or 17 days before releasing those films on the premium video on-demand platform. Previously, cinemas held exclusive rights to films for 90 days.

“AMC will also take part in these new revenue streams that will move from premium video to the film ecosystem,” AMC CEO Adam Aron said in a statement.

Nor did the company disclose the full terms of the deal, describing the deal as confidential.

“Theatrical experience remains the cornerstone of our business,” said Donna Langley, chairman of Universal Filmed Entertainment Group, in a statement on Tuesday. “The partnership we have 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 flexibility.”

The feud between AMC and Universal began in March. Due to growing concerns over the coronavirus epidemic, Universal released “Trolls: World Tour” in theaters and demanded on the same day.

On April 10, the “Trolls World Tour” became available as a digital rental for $ 19.99. With most theaters closed, save for a few drive-in locations, the film was seen primarily on-demand.

Three weeks later, Jeff Shell, CEO of NBCUniversal, postponed the film’s digital success, which had increased fares by nearly $ 100 million, and suggested that the company release more in the future.

While the figure was smaller than the $ 153.7 million that the first “Trolls” film collected at the domestic box office, what Universal earned was the same for both films because digital sales take one percent less than the studio’s earnings.

Theater owners typically take half of a film’s earnings, while 80% of the digital rent fee goes directly to the studio.

Exhibitors were already feeling conflicted by the simultaneous “trolls” release, leading AMC to announce that it would no longer showcase Universal’s film slate at more than 1,000 locations.

After prolonged theater shutdowns in the US, the result of increasing cases of coronoviruses, and the continued push of Hollywood films from the release calendar, AMC’s stance has softened and it has been able to strike a deal with Universal Was.

“AMC enthusiastically embraces this new industry model both because we are participating in the economics wholeness of the new framework, and because premium video film studios on demand create additional capacity to increase profitability, which in turn is green- Lighting should lead to more theatrical films, ”said Aron.

Disclosure: Comcast is the parent company of NBCUniversal and CNBC.

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