Universal, AMC Deal Rewrites Future Of Theatrical Distribution

Moviegoers of a certain age will remember a certain phrase: ‘held over by popular demand.’ That little note in the theater listings of their paper was a sign of a movie’s popularity. Now, it will be its debut on premium VOD a mere seventeen days after release.

 

 

Thanks to an industry-shattering agreement between Universal Studios and AMC Theaters, the window between a movie’s theatrical run and debut for at-home streaming has collapsed to less than three weeks. First reported by Variety, this agreement promises to fundamentally alter the landscape of how movies are consumed.

 

The deal mends some fences between Universal and AMC after the studio took its spring release Trolls World Tour direct to VOD. Under the new agreement, AMC’s CEO Adam Aron said the company will “share in these new revenue streams,” allowing the company to profit from Universal VOD rentals.

 

Universal can only put its movies on premium on-demand, for approximately $20. It cannot sell films or rent them for lower on-demand fees until three months after they debut in cinemas. This will allow AMC to continue to profit from showings of first-run films and VOD simultaneously.

 

 

With other studios, particularly Warner Bros. with Tenet, struggling to find an avenue to release their films in the current environment, this deal is likely to lead to more studios entering into similar pacts with theater chains, further altering the way people view movies.

 

Until now, theaters have fiercely resisted shortening the release window – typically ninety days or less – for films to debut on DVD/Blu-ray or VOD. But studios often cite the fact that a modern movie makes most of its money in the first few weeks of release.

 

Studios and theaters both need revenue right now, and provided that theaters open – a dicey proposition given the current circumstances in the United States – they need to acknowledge that the reality of people rushing out en masse to pack theaters has shifted, maybe permanently.