No More Universal Studios Movies at AMC Theaters
Home Releases of New Movies Said to Continue and AMC Won’t Stand for It
In this article:
— The effects of the COVID-19 lockdown on theatrical releases and the newer, and very successful direct-to-home releases.
— A letter from AMC Entertainment CEO declaring the industry-changing break-up with Universal Entertainment.
After a decades-long relationship between AMC and Universal Studios, AMC has announced it will no longer be showing Universal’s movies from now on.
What brought on the break-up?
When the world went on lockdown, theater doors across the nation were slammed shut and locked until further notice. With no certainty, regarding the timeline for re-opening, many businesses have had to become very creative in order to maintain some amount of cash flow.
Universal Studios saw an opportunity in the crisis and decided to release several of their feature films (Trolls: World Tour, The Invisible Man, The Hunt), originally slated for a theatrical release, straight to your TV for your more private viewing pleasure.
This seemed fantastic! A bit of good news for the hungry cinephiles (aka, movie lovers — I still feel like I’ve said a bad word every time I speak this out loud) among us, patiently awaiting Black Widow, A Quiet Place 2, and others.
You could do what you’ve always wanted to: You stretch out on a cozy bed, not getting kicked in the head by the kid in the seat behind you, with a smorgasbord of snacks at your side (that you didn’t have to smuggle in under your hoodie while you pretended to be pregnant — no guilt), nobody shushing you for crackling of the dang candy wrapper it takes you an infinitely annoying amount of time to open, and all while wearing your favorite pajamas.
It made a lot of sense and it was awesome! Many of us gleefully took advantage of these opportunities.
Yet, some of us deeply long for the experience of being in a real, live movie theater: The Dolby Surround Sound that rattles you in your seat, the deep-black-color range from top-tier projectors that your home TV can’t match, the (somehow, unique) popcorn smell that fills your nostrils the moment you walk in the door, and the immensity of those wonderfully large screens which evoke a sense of awe in me that I’ve enjoyed since I was a young tike watching my first films like Teenage Mutant Ninja Turtles (the grittier, live-action one) on the BIG SCREEN. The explosions are more explosive, the jokes are funnier because everyone is laughing, and all of the emotions strike more deeply in a strange mob-feels kind of way. An experience.
AMC exists for this reason: To bring you that very same experience. The chain, obviously hurting during the closures, furloughed all 600 or so corporate staff members and a greater number of other employees across the nation. With hope, they’d recover when things come closer to normal — but when will that be? It’ll likely be a very long time from now, if ever. Consider, even after they open, the close proximities of those sitting in the theaters and the perpetuating fears and necessary precautions enacted by the governments and the people.
In the midst of all of this, Universal decided that their unprecedented success with regard to their home releases makes way for a new era in how we consume blockbusters. By simultaneously releasing their newest features in theaters and home theaters, they intend to win on both fronts.
Here’s what the CEO of AMC Entertainment, Adam Aron, had to say in response to that move:
At this time of national emergency and the coronavirus wreaking havoc on the entire world, I hope that you and your loved ones are healthy and safe. I worry — and I wish the best for — the health of all of our industry colleagues. Never in our lifetimes has there been a more challenging time.
Amidst a global pandemic as a backdrop, I wish we were spared from also having to address a different issue that arises from Universal actions currently underway.
For 100 years, AMC Theatres has served as a strategically critical and highly profitable distribution platform for movie makers, and for all that time the exclusivity of the theatrical release has been fundamental. When a movie is “Only in Theaters,” consumers perceive it to be higher quality entertainment. Countless filmmakers and moviegoers believe that their creative works are best enjoyed by consumers on the big screen. And we all know that those theatrical releases indeed boost publicity, positive word-of-mouth, critical acclaim and downstream revenues.
For much of the past four and a half years, I have been in direct dialogue with Jeff Shell and Peter Levinsohn of Universal about the importance of a robust theatrical window to the viability of the motion picture exhibition industry. Throughout that time, AMC has expressed a willingness to consider alternatives to the current windowing strategy common in our industry, where the aim of such alternatives is to improve both studio profitability and theater operator profitability.
Universal stated it only pursued a direct-to-home entertainment release for “Trolls World Tour” because theaters were closed and Universal was committed to a lucrative toy licensing deal. We had our doubts that this was wholly Universal’s motivations, as it has been a longstanding desire by Universal to go to the home day and date. Nonetheless, we accepted this action as an exception to our longstanding business practices in these unprecedented times.
In today’s Wall Street Journal, Jeff Shell is quoted as saying that:
“The results for ‘Trolls World Tour’ have exceeded our expectations and demonstrated the viability of PVOD,” Mr. Shell said. “As soon as theaters reopen, we expect to release movies on both formats.”
This radical change by Universal to the business model that currently exists between our two companies represents nothing but downside for us and is categorically unacceptable to AMC Entertainment, the worlds largest collection of movie theatres.
Going forward, AMC will not license any Universal movies in any of our 1,000 theatres globally on these terms.
Accordingly, we want to be absolutely clear, so that there is no ambiguity of any kind. AMC believes that with this proposed action to go to the home and theatres simultaneously, Universal is breaking the business model and dealings between our two companies. It assumes that we will meekly accept a reshaped view of how studios and exhibitors should interact, with zero concern on Universal’s part as to how its actions affect us. It also presumes that Universal in fact can have its cake and eat it too, that Universal film product can be released to the home and theatres at the same time, without modification to the current economic arrangements between us.
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 theatres 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 theatres 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. Currently, with the press comment today, Universal is the only studio contemplating a wholesale change to the status quo. Hence, this immediate communication in response.
AMC has invested significant time and energy with Universal executives over the past few years trying to figure out a new windows model that would be beneficial both for your studio and for our theatre operations. While Universal’s unilateral pronouncements on this issue are unpalatable to us, as has always been the case, AMC is willing to sit down with Universal to discuss different windows strategies and different economic models between your company and ours. However, in the absence of such discussions, and an acceptable conclusion thereto, our decades of incredibly successful business activity together has sadly come to an end.
Sincerely,
Adam Aron
CEO and President
AMC Entertainment
