Universal and AMC agree PVOD model
James R | On 29, Jul 2020
Universal and AMC Theatres have made peace and agreed upon a landmark new model that will allow the distributor to break the theatrical window.
The two companies butted heads this summer, after Universal led the way in releasing films online during the closure of cinemas amid the coroanvirus pandemic. Initially, Universal released The Invisible Man, The Hunt and Emma online earlier than would normally take place, given the traditional three-month theatrical window before a home entertainment release. It was the digital premiere of Trolls: World Tour, though, that proved the final straw, prompting AMC to threaten to boycott Universal movies in its venues – which would include Odeon cinemas in the UK.
Fast forward several months, and the pair have now reached an agreement that could pave the way for the industry’s future: Universal releases will be given a 17-day theatrical window at AMC cinemas, with Universal then given the option to make its titles available as a Premium VOD rental for a limited window. Deadline reports that if a film is performing well in cinemas, it won’t put the movie out on PVOD, while AMC will get a cut of any PVOD revenues. Otherwise, the usual windows of digital and home entertainment releases further down the line remain unchanged.
AMC CEO Adam Aron said: “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.”
“The companies 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,” the companies said in a statement.
The deal could well set the example for other studios and exhibitors to follow, after years of failed negotiations to agree upon a way for films to be released sooner online without leading to cinemas boycotting titles altogether, as many major chains do with Netflix films.
Cineworld, which also joined the heated debate following Trolls: World Tour’s online debut, has told Deadline it does “not see any business sense in this model”.
“While we don’t know the full details and we are always analysing any move in the industry, we will analyse it. People need to be aware that the first big movie from Universal is coming only in six months so there is no pressure here,” said CEO Mooky Greidinger. “But we clearly see this as a wrong move at the wrong time. Clearly we are not changing our policy with regards to showing only movies that are respecting the theatrical window.”
The AMC deal currently only applies to the US, but expect international markets to be up for discussion in the near future.
Odeon owner threatens Universal boycott after Trolls: World Tour goes online
29th April 2020
AMC Theatres, the parent company of Odeon cinemas, is threatening to boycott Universal movies in the future, in response to the studio’s release of Trolls: World Tour online.
Since the coronavirus outbreak earlier this year, lockdown measures have meant that cinemas are closed around the world. Studios have increasingly responded by turning to online platforms as a way to reach audiences in their homes, and Universal has led the way, releasing The Invisible Man, The Hunt and Emma online earlier than would normally take place, given the traditional three-month theatical window before a home entertainment release.
The studio went one step further this month to distribute Trolls: World Tour straight on digital, as a Premium VOD title (charging the higher £15.99 price tag for a rental, equivalent to a posh cinema ticket).
Universal has reported that it took in $100 million in rentals during the movie’s first three weeks in North America, which will help the film reach profitability. It also might lead to a change in strategy for Universal, after years of the industry negotiating (and failing to agree on) the viability of a standard PVOD model.
“The results for Trolls: World Tour have exceeded our expectations and demonstrated the viability of PVOD,” NBCUniversal CEO Jeff Shell told the Wall Street Journal. “As soon as theaters reopen, we expect to release movies on both formats.”
Now, AMC is hitting back with the threat of not showing any Universal movies at all in its venues – not just in the USA, but also in the Middle East and Europe, which would include the Odeon chain.
AMC CEO Adam Aron wrote a letter to Universal chairman Donna Langley, which Variety quotes as follows: “It is disappointing to us, but Jeff’s comments as to Universal’s unilateral actions and intentions have left us with no choice… Therefore, effectively immediately AMC will no longer play any Universal movies in any of our theaters in the United States, Europe or the Middle East.
“This policy affects any and all Universal movies per se, goes into effect today and as our theaters reopen, and is not some hollow or ill-considered threat. Incidentally, this policy is not aimed solely at Universal out of pique or to be punitive in any way, it also extends to any movie maker who unilaterally abandons current windowing practices absent good faith negotiations between us, so that they as distributor and we as exhibitor both benefit and neither are hurt from such changes.”
Aron noted that Universal is currently “the only studio contemplating a wholesale change to the status quo”, prompting AMC’s response. As well as Jurassic World and the ninth Fast & Furious film in 2021, the move would most notably impact James Bond sequel No Time to Die, which Universal pushed back from its planned April release to 12th November 2020 to wait for cinemas to reopen.
The odds on AMC’s cinema chain not showing what is expected to be one of the biggest films of the year seems unlikely. Indeed, he also said AMC is “willing to sit down with Universal to discuss different windows strategies and different economic models”.
A Universal Pictures spokesperson has issued this statement so far: “Our goal in releasing Trolls: World Tour on PVOD was to deliver entertainment to people who are sheltering at home, while movie theatres and other forms of outside entertainment are unavailable. Based on the enthusiastic response to the film, we believe we made the right move. In fact, given the choice of not releasing Trolls: World Tour, which would not only have prevented consumers from experiencing the movie but also negatively impacted our partners and employees, the decision was clear.”
“Our desire has always been to efficiently deliver entertainment to as wide an audience as possible,” Universal added. “We absolutely believe in the theatrical experience and have made no statement to the contrary. As we stated earlier, going forward, we expect to release future films directly to theatres, as well as on PVOD when that distribution outlet makes sense. We look forward to having additional private conversations with our exhibition partners.”
Should Universal continue with its planned PVOD move – which could pave the way for a wider shift in industry release models – you can expect those talks with AMC to be taking place with more urgency than ever before.
The row comes as the Academy has made changes for this year only to allow streaming releases to be eligible for Oscars.
For more on what movies are being released early online, plus reviews, recommendations, theatre and comedy picks and themed weekends, check out our QuaranStreamFest, which is running throughout the lockdown.