What AMC and Universal's deal to shorten the theatrical window to 17 days means for the future of movies

vin diesel fast and furious

  • AMC Theatres and Universal Pictures announced a deal on Tuesday
    that would shorten the theatrical window for Universal movies to 17
    days, after which the movies could move to premium video-on-demand
    services.
  • The deal ends a feud between AMC and Universal that began in
    April, when NBCUniversal CEO Jeff Shell said that future Universal
    movies would be released to both theaters and digital
    platforms.
  • The agreement raises plenty of questions, notably whether other
    theater chains and movie studios will follow suit.
  • Jeff Bock, the Exhibitor Relations senior media analyst, is
    confident that they will and said that a dynamic change for the
    industry is long overdue.
  • Still, Shawn Robbins, the chief analyst for Box Office Pro,
    said that the deal isn’t likely to impact major tentpole releases
    like Universal’s “Fast and Furious” movies, which drive huge
    profits at the global box office.
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After
a three-month feud
, Universal Pictures and AMC Theatres, the
largest theatrical chain in the world, have reached a deal that
could have major ramifications for the future of the movie
business.

AMC and Universal announced on Tuesday that the much-debated
theatrical window would shorten to 17 days, meaning Universal
movies would be able to debut on premium video-on-demand services
17 days after premiering at AMC theaters. The previous theatrical
window was between two to three months.

It’s a dramatic shift for a system that Jeff Bock, the Exhibitor
Relations senior media analyst, characterized to Business Insider
as “archaic.”

The agreement doesn’t mean that consumers could wait 17 days and
get a standard-priced rental instead of going to a theater,
however. PVOD digital rentals at services like iTunes and Amazon
are typically priced at $20 a pop for new releases. Because of
this, AMC is likely not as worried about a huge chunk of customers
seeing PVOD as a deal relative to theaters, assuming the public
health crisis of the coronavirus pandemic eventually
dissipates.

The feud between AMC and Universal began in April after
Universal’s “Trolls World Tour” hit PVOD platforms on the same day
that it was scheduled to open in theaters, which have largely been
closed across the US since March due to the pandemic. The
movie’s apparent success
sparked praise from NBCUniversal Jeff
Shell, who said that “as soon as theaters reopen, we expect to
release movies on both formats.”

This didn’t sit well with AMC Theatres CEO Adam Aaron, who sent
a letter to Universal Filmed Entertainment Group chair Donna
Langley refusing to play future Universal releases in any of the
chain’s theaters.

But now that the two parties have reached an agreement, it
raises plenty of questions, notably:

  • What does this mean for other major chains like Regal? Will
    they follow the same path?
  • If they don’t play ball, does that change Universal’s PVOD
    strategy?

There’s no clear answers to those questions right now, but Bock
is confident that other theater chains and movie studios will get
in line.

“Universal and AMC’s deal basically forces the hand of the other
studios and exhibitors to play a similar game, which could result
in the most dynamic change the movie industry has seen since its
inception,” Bock said.�

Shawn Robbins, the Box Office Pro chief analyst, wasn’t as eager
to declare such a seismic change for the industry given the
uncertainty of the agreement. He also noted that Universal doesn’t
have any major tentpole releases on the theatrical calendar until
next year, so the impact of the deal may not be felt right
away.

“The studio acknowledges the importance of the theatrical
window, so it’s difficult to imagine them taking a film like ‘Fast
9’ or ‘Jurassic World: Dominion’ onto PVOD after just two or three
weekends, particularly given the lack of international deals on the
PVOD front and the heightened risk of piracy for any film once it’s
available to stream,” Robbins said.

That’s an important point given that, according to
The Wall Street Journal
, AMC would collect a share of the
revenue Universal movies earn from digital rentals.

Tentpole movies in Universal’s “Fast and Furious” and “Jurassic
World” franchises drive huge profits at the global box office.
Universal, and other studios if they follow suit, would likely
evaluate movie releases on a case-by-case basis to determine what
is suitable for an extended theatrical run and what should move
quickly to digital.

After all, studios have already been doing this during the
pandemic with theaters closed, with “Trolls World Tour” being the
movie that really kicked things off. Studios have largely committed
to theaters by rescheduling movies, sometimes indefinitely, such as
Disney’s “Mulan.” But other movies have moved straight to streaming
or digital, such as Warner Bros.’ “Scoob!”

Whatever happens, Bock thinks that movie theaters need to evolve
to survive, especially after the pandemic hit the industry so
hard.

“Streamlining the industry to cater more to consumer’s tastes is
long overdue,” he said.

SEE ALSO: Horror,
disaster, and sports: Exclusive data reveals what movies audiences
have watched during the pandemic


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What AMC and Universal's deal to shorten the theatrical
window to 17 days means for the future of movies