Cinema chains have long argued against the notion of simultaneous theatrical/VOD releases of major movies. While studios have repeatedly shown an interest in shortening the theatrical release window of films, theaters have used their leverage to maintain the current system. For example, in 2011, Universal experimented with releasing Ben Stiller movie Tower Heist in a compressed three-week window before going straight to the home market. Theaters revolted and refused to screen it, forcing them to abandon the plan.
But in 2020, things are very different. The Coronavirus lockdown has forced every major domestic theater chain to close and as yet there are no firm plans for when they’ll reopen. Even when they can, most predict that they’ll be mandated to maintain social distancing. This will mean that they can only sell half the number of tickets they normally could. All this could be the death knell for companies like AMC Entertainment, which was already laden with debt and in dire financial straits even before Coronavirus.
So, Universal deciding to skip a theatrical release for Trolls World Tour, taking it straight to VOD and then bragging about how successful it’d been, was the straw that broke the camel’s back. AMC (and later Regal) announced that it would no longer be screening any Universal movies. This would include box office heavy-hitters like Fast and Furious 9, No Time to Die and Jurassic World: Dominion.
Now, Universal has responded and they’re not backing down. CEO Jeff Shell discussed the matter in today’s Comcast Q1 earnings call, saying:
“The question is when we come out of this, what is going to be the model. I would expect that consumers will return to the theaters and we will be part of that. And I also expect that PVOD is going to be a part of that in some way. It’s not a replacement, it’s going to be a complementary element. We’re just going to have to see how long that takes and where it takes us.
There’s no question that theatrical will some day be a central element to our business and film business, it’s how people make their movies and how they expect their movies to be seen. But the flip side is the majority of our movies, whether we like it or not, are being consumed at home, it’s not realistic to assume that we’re not going to change, that this part of the business isn’t going to change like all parts of the business are going to change.”
For major theater chains, this is basically their worst nightmare come true. The last thing they need is to have to deal with a competing “complementary element” in their business. After all, audiences being able to watch major releases at home on the same day as a theatrical release (or soon after) undercuts their exclusivity.
Shell went on to talk specifically about the release of Trolls World Tour, explaining:
“We’re in an unprecedented environment. We had a number of films, including Trolls (World Tour) that were ready to go. We had worked really hard on them and invested a lot of money in them. And we really had a choice: do we delay those movies to a time when we think theaters are going to be back open again, we did that with Fast and Minions, or do we sell them or move them to streaming — some of our other competitors have done that, or do we try something new to try and preserve the nature of movies, and that’s how we came up with the PVOD offering. First of all, I couldn’t be more pleased with Donna Langley and her team in how they executed, as the numbers you mentioned are really interesting. We provided consumers with a product they desperately needed at home, particularly if you have a bunch of 7 year olds and 5 year olds running around. And it was good for employees as it kept them working on something, and gave us an ability to make money on something that we were proud of.”
So, who’s going to come out on top? Well, as I see it, Universal holds most of the cards here. And while boycotting all Universal movies might be a big threat in normal times, it’s somewhat blunted when AMC can’t show any movies for the foreseeable future. Whatever happens next though, it’s going to mean a very different entertainment landscape in a year’s time.
from Movies – We Got This Covered https://ift.tt/2Ykhz3K
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