AMC Theatres, Universal reach deal to bring new movies to homes earlier

Brenda Watkins
July 29, 2020

AMC, the world's largest movie theatre chain, will receive a portion of the revenue that Universal generates from "premium video-on-demand" sales during the first weeks a film is offered to at-home viewers.

In a major shake-up to the movie business, AMC Theatres and Universal Pictures have partnered to bring new movies to premium VOD shortly after their initial release.

During the pandemic, Universal had been experimenting with offering movies online while they're still in theaters, which AMC was not happy with.

"AMC enthusiastically embraces this new industry model both because 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", AMC CEO Adam Aron said in a statement.

The deal follows a period when the pair came to blows over the decision by Universal to release Trolls World Tour straight to PVOD alongside theatrical distribution in a small number of drive-in theatres.

Universal Studios' chair, Donna Langley, said: "The theatrical experience continues to be the cornerstone of our business". The industry is already under pressure from the increasing popularity of streaming and a pandemic that's slashed box-office sales, and AMC's agreement with Universal adds another complication. The companies said they reached this agreement based on their shared commitment to a mutually beneficial long-term partnership that is focused on serving consumers worldwide while preserving and enhancing the theatrical experience. Studios, meanwhile, have increasingly sought to deliver new movies more quickly into the home.

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For the largest movie chain in America to announce that they wouldn't be showing movies from one of the major studios was a big deal, but it was clear that Universal was in the power position here.

The company in mid-March announced plans to move its theatrical releases to digital retailers, charging $20 for a 48-hour rental of movies, including "The Invisible Man" and "Emma". The shortened window only applies to premium video-on-demand - which often means digital rentals of $20 - not standard on-demand or other home platforms.

In response, AMC blasted Universal for going around theaters and said it would no longer show the studio's movies in its 1,000 global locations.

Universal has consistently maintained that it is committed to theatrical releases and that PVOD is only being considered as a possible option for certain titles like "King of Staten Island", which also moved to PVOD this summer as theaters remained closed.

"We would note that just as restaurants have thrived even though every home has a kitchen, AMC is highly confident that moviegoers will come to our theatres in huge numbers in a post-pandemic world". So, in total, Universal and AMC each believe this will expand the market and benefit us all.

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