It was a strange feud that began with the release of Trolls: World Tour, which Universal sent direct to streaming, bypassing theaters entirely during the Coronavirus pandemic. Despite taking this risk, the movie did well, perhaps too well for some, as it prompted a frustrated response from the already struggling AMC Entertainment.
As a response to Universal's decision, AMC, perhaps motivated by its own financial troubles, attempted to strong-arm the company, announcing they would no longer screen Universal's movies until some sort of concession had been made. While the move was unlikely to be sustainable long-term, it seems to have spurred at least some attempt to compromise, with the two companies announcing a new agreement this week.
The key change in this deal is the "theatrical window," the amount of time the studio must commit to having its film in theaters before releasing alternative ways to view the film. For decades, theaters have remained staunch in their insistence that they have exclusive rights to films for 90 days. This is the primary reason why it takes so long for big movies to make themselves available for purchase after their initial showing. Universal's new deal with AMC shortens that time period considerably, reducing the theater exclusivity period to three weekends, a mere 17 days. The change allows Universal to make their films available for on-demand purchase as soon that exclusivity expires.
This change is unprecedented for theaters, allowing studios, for the first time in decades, to release their movies to other platforms within the first month of their theater debut. AMC also gets something out of the deal, with Universal stating that the agreement will be sharing the revenue streams from on-demand release with AMC in some capacity.
Universal's deal with AMC represents a significant change in the industry. For the first time in a long time, there is the sense that theaters are no longer kingmakers in the film world, and that big companies like AMC may have to adapt as they lose some of their influence to new platforms and delivery methods. While this new deal represents something of a compromise between studios and theaters, there is no doubt that both parties will be weighing their options carefully as they move further and further into this new cinematic era.
Source: CNBC