The war between on-demand streaming and traditional theatrical releases is heating up. AMC Theaters and Cineworld (parent compnay of Regal Entertainment) have joined together in the banning of Universal movies once their cinemas reopen. The decision to do so comes after NBCUniversal CEO Jeff Shell made comments regarding the successful premium on-demand release of Trolls World Tour, specifically his mention of releasing movies in theaters and premium VOD simultaneously.
"The results for Trolls World Tour have exceeded our expectations and demonstrated the viability of PVOD," Shell previously told The Wall Street Journal. "As soon as theaters reopen, we expect to release movies on both formats."
In response to Shell's comments, AMC Theatres chairman and-CEO Adam Aron issued a strongly worded letter to Universal Filmed Entertainment Group chairman Donna Langle (via Hollywood Reporter).
"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 theaters 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 theaters 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."
Just one day later, Cineworld joined in on the Universal boycott. In a statement (via Variety), Cineworld also said it would not be showing Universal movies once its opens back up.
"Today we make it clear again that we will not be showing movies that fail to respect the windows as it does not make any economic sense for us,”
Trolls World Tour brought in an estimated $100 million in premium VOD rentals in its first three weeks in North America. That's just slightly below the $116 million earned domestically by the original Trolls movie in its first three weeks. The 2016 film went on to earn $153.7 million in the U.S. and Canada and nearly $347 million globally.
While Trolls World Tour has been a successful trial run for Universal, it's hard to say if this sort of model will continue to work once the world returns to normal, theaters open back up, and people are no longer confined to their homes. With most of the world self-isolating, the availability of Trolls World Tour gave families some much-needed entertainment. Would it have been as successful otherwise?
It's hard to say definitively, but it seems Universal is trying to walk back some of Shell's comments. The studio issued its own statement saying it remains dedicated to the "theatrical experience."
“We absolutely believe in the theatrical experience and have made no statement to the contrary. As we stated earlier, going forward, we expect to release future films directly to theaters, as well as on PVOD when that distribution outlet makes sense. We look forward to having additional private conversations with our exhibition partners but are disappointed by this seemingly coordinated attempt from AMC and NATO to confuse our position and our actions.
"Our goal in releasing Trolls World Tour on PVOD was to deliver entertainment to people who are sheltering at home, while movie theatres and other forms of outside entertainment are unavailable. Based on the enthusiastic response to the film, we believe we made the right move."
What happens next is anyone's guess. The coronavirus has certainly uprooted a ton of industries, traditional movie theater chains being one of the biggest areas impacted. It's hard to imagine everything will return to normal immediately, even once restrictions are lifted. There's no guarantee people will flock to theaters once they reopen. So is it possible Universal could be better off going the PVOD route?
It will be interesting to see how the industry responds post-coronavirus pandemic. Will you still prefer going to theaters or do you think you'll embrace premium VOD rentals?