AMC and Universal reach surprise deal to shrink theatrical windows

Trolls: World Tour
NBCU’s decision to push the “Trolls” sequel out to TVOD platforms and comments from CEO Jeff Shell resulted in AMC promising to no longer show Universal films in its theaters. However, it now looks like AMC and Universal have settled their differences. (DreamWorks/NBCUniversal)

AMC Entertainment and Universal reached a surprise deal to shorten the window between theatrical releases and premium streaming video releases.

The agreement includes at least three weekends (17 days) of theatrical exclusivity for all Universal Pictures and Focus Features theatrical releases, after which the studio will have the option to make its titles available across premium video on demand (PVOD) platforms, including AMC Theatres On Demand.

In the coming weeks, the two companies will begin discussions surrounding international distribution agreements in the countries in Europe and the Middle East served by AMC. Importantly, Universal’s traditional windows for electronic sell through (EST) and video on demand (VOD) remain unchanged.

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“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 in a statement.

RELATED: NBCUniversal smashes theatrical windows with early VOD releases

The agreement is something of an extension of what Universal and other studios have been doing since the beginning of the pandemic. In March, the NBCUniversal announced that DreamWorks Animation’s “Trolls World Tour,” which was scheduled to hit theaters on April 10, would also be available on the same day as a premium-priced on-demand option. The movie went out to many transactional VOD services at a suggested price of $19.99 for a 48-hour rental.

In April, NBCUniversal CEO Jeff Shell said there’s “no question” that theatrical will someday again be the central element for NBCUniversal’s and others’ film businesses.

“The flip side is the majority of movies, like it or not, are being consumed at home and it’s not realistic to assume that this part of the business isn’t going to change,” said Shell, who said his company chose to release “Trolls World Tour” on transactional VOD platforms on its original theatrical release date to “preserve the premium nature of movies.”

NBCU’s decision to push the “Trolls” sequel out to TVOD platforms and comments from Shell resulted in AMC promising to no longer show Universal films in its theaters. However, it now looks like AMC and Universal have settled their differences.

Lightshed analyst Rich Greenfield said the decision could have widespread positive impacts for various streaming video providers.

“Huge win for tech companies such as Netflix, Amazon and Apple as movie theaters refused to exhibit movies that did not, at least, adhere to 60 days before SVOD — appears those walls just crumbled,” wrote Greenfield in a tweet. “If PVOD becomes more regular — the biggest winner is @amazon, which has been by far the largest platform monetizing PVOD outside of Comcast/Sky.”

 

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