AMC Theaters and Universal’s new VOD deal could see a radical change in the film business

Universal Pictures was one of the film studios to quickly respond to the COVID-19 epidemic, which quickly pushed its films into VOD and thus plunged into hot water with AMC Theaters, the world’s largest movie theater chain. But after a month of public controversy, the two companies have come to a multilateral agreement, which should keep both sides happy – and indicate a seismic change in the way the films are distributed.

The conflict started in March, before we had any idea how long the film theaters would be closed at Universal Cinemas Troll world tour At the same time it was scheduled to hit theaters on premium VOD platforms.

AMC shortened the traditional theatrical “window” – the period during which films run exclusively in theaters – in direct form, and announced in retaliation that it would no longer show any universal films. (This poses a very irrelevant threat, as American movie theaters have been closed since March.)

On Tuesday, the two companies announced that they had agreed to a 17-day new theatrical window or three weekends before Universal Film could be sold on premium VOD. This is a significant small part of the back window, which was close to 90 days for physical home-video releases and about 75 days for digital releases.

Here’s what it means in practice: the next Jurassic Park film, Jurassic World: Dominion, Is scheduled to debut in theaters on June 11, 2021. Assuming that theaters are open until then, you can go to your local multiplex to see Jurassic World Triology’s conclusion – or you can just wait until June 28, and see it for $ 19.99 for rent. But keep it on your TV at home.

Owen Grady (Chris Pratt) in 2015 Jurassic World.
Picture: Universal Pictures

Despite these short plays, Universal’s business model still relies heavily on movie theaters. Of 2015 Jurassic World Grossed over $ 1.67 billion at the global box office. And it also shows the importance of a three-weekend window. During the first three weekends of release, Jurassic World Drawn in $ 500 million at the domestic box office – more than 76% of its final tally of $ 652 million, ending five months after its theatrical run.

“Theatrical Experience remains the cornerstone of our business,” said Donna Langley, Chair of Universal Pictures, in a news release. “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.”

While this new window may seem frighteningly low for AMC theaters, it is probably positive in the long run. The old theatrical window, as recently as the mid-2000s, was close to six months old, was built around the arrival of the home-video market in the 1980s, so that studios could find a film on VHS, DVD, etc. To prevent the issuance of copies of. , While it was still running in theaters.

But it was also built on the idea of ​​films that were long-lasting at the box office, still making money two or three months after the premiere in theaters. These days, the box office performances of the films have largely surfaced in the first few weekends of release. They are quickly replaced by other films, often from the same studios that produced previous hits.

With this new accelerated speed, the 70- to 90-day window of exclusivity doesn’t really matter to anyone. Most films fall into a dead zone, during which they were not in theaters and could not be released on VOD or Blu-ray. In other words, no one was spending money on them for about two months. This new deal will help fix that problem.

Under its agreement with AMC Theaters, Universal can release a film on premium video-on-demand (PVOD) platforms – charging upwards of $ 19.99 to rent it – once it is three weekends ( Minimum 17 days) playing exclusively in theaters. AMC will also get these PVOD sales reductions, which are revenues it can desperately use, with the United States still dramatically back in a massive question mark.

“AMC will also take part in these new revenue streams, which will come from premium video to the movie ecosystem,” said AMC Theaters CEO Adam Aron. “So, overall, Universal and AMC each believe that this will expand the market and benefit all of us.”

There’s no word on how exactly AMD will share in the PVOD market – through its own AMC Theaters on Demand app, which will be one of several digital homes for Universal films. For now, no other film studio has come to an agreement with AMC for adjusted theatrical windows, and Universal has not announced a partnership with any other major theater chain such as Regal Cinema. However, with the fall of this first domino, it is possible that other announcements are taking place in the near future.

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