AMC Theatres announce they will no longer play Universal films - studio respond
Universal were yesterday celebrating the success of Trolls World Tour on premium VOD, with The Wall Street Journal revealing the film had secured more profit via digital release than the original, due to the higher revenue split taken from digital sales. NBCUniversal CEO Jeff Shell said in the artcle: "The results for Trolls World Tour have exceeded our expectations and demonstrated the viability of PVOD. As soon as theatres reopen, we expect to release movies on both formats."
However, this prompted a sharp response from AMC Theatres - owners of the Odeon chain - with CEO Adam Aron writing a strongly worded letter to Universal Filmed Entertainment Group chairman Donna Langley: "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 theatre reopen, and is not some hollow or ill-considered threat," said Aron. "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."
Universal were quick to respond with a statement that read: “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," the statement added.
The reality of the situation is this is likely to be cleared up in behind closed doors meetings over the coming weeks and months. Much has been said by industry experts about the possibility of AMC being forced to file for Chapter 11 bankruptcy due to the closure of their cinemas. Although a $500 million debt offering earlier this month has given them some breathing space for the time being.
Simply put, Universal cannot do without AMC, and AMC cannot survive without Universal. The studio's next film in cinemas is currently scheduled to be Candyman at the end of September, and with franchises such as James Bond, F&F and Jurassic Park all set to release films over the next couple of years, there isn't a major cinema chain that can afford to miss out on the revenue they will guarantee. Which, as cinema chains slowly try to recover from the devastating effects of the coronavirus over the next 2 years, will be badly needed.