The new agreement means films released by Universal Pictures and Focus Features can play in AMC Theaters for three weekends before hitting premium video on demand platforms, including AMC Theatres On Demand. AMC offered to collect 20% of the gross revenue from the premium video-on-demand rentals and receive a 2% reduction in film rental terms, according to a studio source who was not authorized to comment.
That marks a big change for the industry, where major films weren't released for home viewing before an average of three months in theaters.
During the pandemic, Universal had been experimenting with offering movies online while they're still in theaters, which AMC was not happy with.
AMC CEO Adam Aron said that "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". AMC and Universal squabbled earlier in the year following the release of Trolls World Tour on VOD, which proved to be a big success for the studio.
Donna Langley, chairman of Universal Filmed Entertainment Group, had this to say about the deal in a statement.
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The British Dietetic Association (BDA) cautiously welcomed the plans as a positive step, but urged the Government to go further. The Better Health campaign will be introduced with weight-management services expanded in the National Health Service.
It's unclear whether Universal will secure a similar agreement with other exhibitors, or whether other studios, such as Walt Disney Co., Paramount Pictures, Warner Bros. or Sony Pictures, would make a similar pact with AMC.
Theater chains have long resisted efforts by studios to shorten the release gap, known as the theatrical window, because they viewed such moves as a threat to their business model. With the new 17-day theatrical release window, however, the dispute between the two companies has been settled. Deadline suggests in its report that the 17-day window will be a USA experiment, and might not affect the way that Universal movies play out overseas. Until now, the theatrical window has lasted 90 days. "The partnership weve 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". Following the shortened window, new releases will be made available on iTunes, Amazon and other outlets including AMC's own AMC Theatres On Demand streaming platform.
It also includes a traditional distribution agreement, wherein AMC has agreed to distribute Universal films in its theaters for years to come.
While theaters are shut down due to the coronavirus, movie studios have been delaying releases.
It added: "Going forward, AMC will not license any Universal movies in any of our 1,000 theatres globally on these terms". This deal is sure to impact the industry even further. Exhibitors are now planning on a large-scale reopening by late August, with Warner Bros.' Tenet prepared to usher moviegoers back over the Labor Day weekend, after debuting a week earlier overseas.