In an unprecedented turn of events, the AMC theater chain and Universal Pictures have made a deal for video-on-demand releases.
The deal comes after a dispute back in April where AMC announced it would no longer screen any Universal Pictures movies after CEO Jeff Shell said the studio would release movies through theaters and VOD simultaneously in the future.
Since movie theaters across the country are still closed due to the pandemic and with no current plan to safely open in the near future, movie theaters have been hurting, and AMC was on the brink of bankruptcy. Without theaters open many movie studios have made a pivot similar to Universal. Some have either scrapped a theatrical release all together, like Disney with Artemis Fowl, (which arguably was probably for the best), or pushing the date of VOD up by a few months as Warner Bros. did with the Ben Affleck movie, The Way Back.
In the past theaters have required films to play on the silver screen for at least 90 days before heading to VOD and digital platforms. This new deal will allow the film studio to release its movies on VOD after three weekends, or just 17 days, after the theatrical release in the U.S.
Both companies released statements about the historic deal:
“The theatrical experience continues to be the cornerstone of our business,” Universal Filmed Entertainment Group chairman Donna Langley said. “The partnership we’ve forged 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 optionality.”
“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,” said AMC CEO Adam Aron, noting that “a considerable majority of a movie’s theatrical box office revenue is typically accrued in the first three weekends of release.”
“Focusing on the long-term health of our industry, 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,” he added.
This deal is an incredible sign of the times we are in right now. It shows just how important it is to be flexible with your business models and to see how you can adapt to survive in an unpredictable environment. It also shows how important it is to help each other succeed. However, this is no guarantee that the deal will be able to save AMC, but it should be able to keep them afloat through the end of the year at least.