AMC and Universal agree to let movies go from theaters to digital rentals much sooner

AMC Theaters and Universal have reached a new agreement that dramatically shortens the theatrical exclusivity window — the amount of time that films have to play in theaters before they’re allowed to be sold or rented in other places, like iTunes, Amazon, or AMC’s own On Demand service — down to just 17 days (ensuring that the films will hit at least three weekends in theaters).

The new deal marks a radical shift from the standard theatrical release window, which has typically been between 70 and 90 days in recent years, and could vastly alter the landscape of both theatrical and digital film.

Universal and AMC had previously been feuding over release windows after Universal — spurred on by the direct-to-digital success of films like Trolls: World Tour, which had skipped theaters due to the ongoing COVID-19 pandemic — planned to release future films on both digital and theatrical platforms. AMC Theaters CEO Adam Aron responded by calling Universal’s plan “unacceptable,” and threatened to ban all future Universal releases from AMC Theaters (although, given that theaters have yet to reopen, AMC never actually had to make good on that threat).

It’s not a completely straightforward shortening of the theatrical window. According to Variety, the deal only allows Universal to offer “premium on-demand” rentals in the roughly $20 range — regular priced $3 to $6 rentals (which could vastly undercut theater tickets) will still have to wait 90 days after the theatrical debut. That term would seem to also undercut the possibility of films jumping earlier to streaming services, like NBCUniversal’s new Peacock service. Additionally, Aron notes that AMC will “share in these new revenue streams” and get a cut of those early rentals, although the two companies haven’t revealed any details.

“The theatrical experience continues to be the cornerstone of our business,” commented Donna Langley, chairman of Universal Filmed Entertainment Group, in a statement to CNBC. “The partnership we’ve 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.”

Universal has the opportunity to offer early releases for any of its films, although the company isn’t expected to dramatically shorten the theatrical run of big blockbusters like the upcoming Fast & Furious or Jurassic Park sequels (which historically have been huge, $1 billion blockbusters). But it does give Universal the flexibility to release its smaller films earlier, and it gives customers the option to choose where they’d like to see those films (something that will likely be important as gradual reopening of theaters begins).

Right now, the new shortened window is just between Universal films and AMC, although by setting the precedent, it’s hard to imagine that other major studios like Disney, Warner Bros., Sony, and Paramount won’t try to negotiate similar terms in the future, too.

Comments

I’m actually excited by this news.. hopefully other studios follow suit because this will be awesome!

This helps justify my recent 65GX purchase and Atmos system.

I do wonder if they’ll also make the digital releases 4K + Atmos + HDR at the same time…

Ya that is my concern. They will come out bareboned and we’ll still have to wait on HDR/Atmos. Hope not!

The whole point of going to the theater is to get the best possible viewing experience, with a price to match, so I wouldn’t expect them to give away Atmos / Vision for free when the movie is still playing. They still want you to go to the theater.

It won’t be ‘free’, the reasonable solutions is different price points which we see already with HD and 4K film versions. Directors are concerned with the viewing experience whereas Studios are focused on profit. So if profits are greater via home release, release schedules will reflect this.

*solution is…

The recent string of straight to PVOD films were all available in their best format. Trolls, King of Staten Island etc are all on Apple TV in 4K HDR

Good point! Just hoping they stick with this instead of delaying certain formats. Not saying it’ll happen, but I just had this weird feeling about it when I first read this news.

Right? I bought an OLED a couple years ago and I don’t have a surround system, but I do have a banging 2.1 system. I’ve begun to hate the theater anyway because 3/5 movies I’ve gone to recently have ended up with astoundingly rude people in the crowd who ruin the experience.

It’s been the same experience in theaters for me as well. I go to my local Dolby cinema for the HDR and Atmos experience and always thought that the premium price would put certain people off from those screens but I somehow manage to get the person who takes their shoes off with no socks on and sneaks in some terrible smelling food…

which atmos system did you pair with it? I have a 65GX as well and thinking about their Gx soundbar to match.

I have a standalone Atmos system (5.1.4) with Marantz receiver and klipsch up-firing speakers to accompany my front towers and rear bookshelf units.

I actually have a Vizio Atmos bar (5.1.2) in the bedroom and that works great – given that it’s a small room. If you have high ceilings/large room, definitely opt for a more powerful Atmos system.

thanks, mine is in a master bedroom with standard ceiling height so I won’t need much in the way of power.

The theatrical business is going to need to reinvent itself beyond even the current model of trying to replicate the living room experience with plush recliner’s, order in food and plenty of people talking and texting during the film. I already get that at home for free.

As for Ms. Langely’s diplomatic, encouraging words, it’s all about the margins and the theatrical window is clearly an obstacle to growing those else the exclusive theatrical window wouldn’t be eroding in pace with the Malibu shoreline. We are probably 3 years away from day-and-date theatrical and on demand releases.

Bottom line is this: there is no urgency to go to the movies anymore unless it’s a big theatrical experience like Star Wars or a new Avatar movie. Then maybe I’ll shell out $14-$25 to see it in Imax 3D. I really wanted to see "1917" on the big screen back in December but never got around to it. Then it landed on Amazon for $15 and I thought, well, OK, not the same as a theater experience, but do I want to pay $15 to watch it on my TV? Nah. Two months later I rented it for $5.99. Really enjoyed it and didn’t feel like I "missed out" on anything by waiting.

As for something that’s just a run-of-the-mill theatrical? Something like "The Hunt" or "The Invisible Man" or even "Irresistible" with Steve Carell? $14-$20 at the local AMC theater? No thanks. Why? What am I missing out on that I couldn’t get at home from a Netflix or Hulu original? In fact, I wouldn’t pay $5.99 when they drop 90 days later in the on demand rental folder when I know I can watch the same movie on HBO, Showtime or Starz within 6 months of release.

Where’s the urgency to go out to the movies?

Invisible Man grossed over $100 million and is the definition of a theater experience. Which I think is the point of going to the movies. Sometimes you want to laugh or cry or be frightened. Id hate to live in a world where the only movies in theaters are Marvel, Star Wars, and Fast and the Furious.

Invisible Man grossed over $100 million and is the definition of a theater experience.

Debateable. Not it’s financial returns, being the definition of a "theater experience". While everything looks better on a big screen with immersive sound, Most movies don’t lose its impact to make you "laugh or cry or be frightened" with a smaller screen. If it is a well-written movie it will still be well-written on a 50" screen. Same if it’s well-acted, shot, or edited. It takes a hit on wow-factor… maybe, but not quality.

Id hate to live in a world where the only movies in theaters are Marvel, Star Wars, and Fast and the Furious.

Oddly enough these are the movies that ARE hard to replicate outside of the theatre… earth-shattering sound, larger than life imagery, 3D if you are interested. It’s exactly when the story is… fine… when the "theater experience" saves throw-away content. Besides, even Disney is moving those all to their streaming service so you may not even see them there if the numbers line up for them.

AMC will "share in these new revenue streams" and get a cut of those early rentals,

This surprised me. To me it just doesn’t seem like AMC has a lot of leverage in these negotiations. They could not afford follow through on their threat to ban Fast & the Furious and the Jurassic movies from their theaters.

AMC is the biggest theater chain in the US, and part of the biggest chain in the world. The vast majority of a film’s revenue comes from the box office.

Put these two together and they have enormous leverage. Plus Universal is just as desperate to get their theatrical revenues back and would lose billions from a boycott.

AMC is 4.7 Billion dollars in debt and will be in bankruptcy shortly. The theatre industry will likely be only partially open around the end of this year and may never reach it’s peak again.

There will be the faction that wants it in the theatre and the faction that wants it at home. I am very surprised that Universal didn’t push for simultaneous release and make the VOD 60 dollars.

The cut Universal gets from VOD is much higher than the theatre. Couple that with the fact that AMC will probably be available for pennies on the dollar later this year makes me question why they gave up so many weeks. Universal is cash strapped too, that is really why Trolls got released.

AMC is trying to delay the inevitable. The movie studios have a future without AMC. AMC has no future without the movie studios. Universal is in a much better position.

"The vast majority of a film’s revenue *comes from the box office."

*came

I predict by the end of the year Disney will buy AMC theaters and transform cinema rooms to live-action spectacles for their movies. I can already see Spiderman flying from the screen to your seat and Elsa making it snow while you chomp on your Mickey churro.

Table for 4, please

For $20 you should get the digital download when released

$30 is the standard right now for the Disc+digital release. I would have no issues paying $30 for a 48 hour rental, but when it’s available to own I get that too. It’s hard to rent for $20, when right now I buy for $30 and forgo the theaters altogether.

Hard to understate how massive this is. As the piece mentions, big billion dollar blockbusters will still have runs of 1-3 months because they can only make that money in the theater for that long. But make no mistake, it gives studios tons of flexibility. Is your movie stalling out after 30 days? Drop it on PVOD for $20 to get the people who don’t usually go to theaters. Do you have a big awards movie that you don’t want to spend the cash on slowly rolling out in theaters for months at a time? No problem. Do a national release for 17 days for awards consideration and then drop it on PVOD where the word of mouth will bolster it.

The theater is about to become an event venue. Indie films and mid-budget films will come almost as soon as they leave while the blockbusters stick around as long as they can to get those 10 figure grosses.

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