Out of all of the public spats to have surfaced in the face of the coronavirus, no one could have predicted that one of the most controversial came from two of the most prominent entertainment companies in the industry.
After movie theaters shut down worldwide last month due to the coronavirus, many movie studios had to pivot to streaming their films on demand in order to make a profit. One of the more popular studios to have found success in this format was Universal Studios. Its most recent films The Hunt and The Invisible Man were among the first releases to be made available on VUDU, while Robert Downey Jr.’s Dolittle was released later on down the road. But one of the most successful rentals is, oddly enough, Trolls World Tour, which set the record for the most streams in a weekend release, surpassing even Jurassic World: Fallen Kingdom’s streaming numbers, according to Deadline.
“The results for ‘Trolls World Tour’ have exceeded our expectations and demonstrated the viability of [premium video on demand],” NBC Universal CEO Jeff Shell said to The Wall Street Journal. “As soon as theaters reopen, we expect to release movies on both formats.”
Well, that interview ended up being the worst possible thing Jeff could have done, because after that, AMC Theatres declared that it would no longer screen any of Universal’s movies in its 1,000 theaters across the globe.
In a strongly-worded letter, AMC Entertainment President and CEO Adam Aron wrote to Universal conveying the company’s disappointment, expressing explicit frustration over Shell’s “release movies on both formats” comment.
“AMC believes that with this proposed action to go to the home and theatres simultaneously, Universal is breaking the business model and dealings between our two companies,” Adam writes. “It assumes that we will meekly accept a reshaped view of how studios and exhibitors should interact, with zero concern on Universal’s part as to how its actions affect us. It also presumes that Universal, in fact, can have its cake and eat it too, that Universal film product can be released to the home and theatres at the same time, without modification to the current economic arrangements between us. It is disappointing to us, but Jeff’s comments as to Universal’s unilateral actions and intentions have left us with no choice.”
What does this mean for Universal? Going forward, you can expect any film with a Universal logo on it to not be playing at any AMC or Regal theater, including the upcoming Fast & Furious 9, animated Illumination movies such as Despicable Me and Minions, and future sequels to the Jurassic Park franchise. At the moment, you could still watch Universal movies from Cinemark or Harkins theaters, but that’s assuming if they don’t pull out later on like AMC or Regal Cinemas did. With AMC and Regal being the largest movie theater chains by far, you can expect Universal to be absent from over 18,000 screens across the world.
I get AMC’s frustrations with Universal. In his letter, Adam says they accepted Universal to originally stream Trolls World Tour to homes as an exception due to “unprecedented times.” He even says that they were willing to sit down with Universal and discuss different strategies and economic models that would benefit both companies, especially in the face of this pandemic.
So when Jeff completely disregards all of those conversations and investors and unilaterally decides this is the “new normal,” I can understand why AMC is more than peeved at his comments to the press. Yet, I can’t help but feel this might be a slight overreaction on AMC’s part. As part of Hollywood’s “Big Five” studios, Universal holds 11% of the market share, slightly behind Sony Pictures’ 12.1% and more than double of Paramount’s 5%. Universal’s movies have consistently placed among the year’s highest grosses, competing against Columbia Pictures, TriStar, 20th Century Fox, New Line Cinema, and even Warner Bros. Saying that a big chunk of movies would be missing from movie theaters is a severe understatement, and with that, a large chunk of the market as well.
“We absolutely believe in the theatrical experience and have made no statement to the contrary,” Univeral wrote in a response statement to AMC. “As we stated earlier, going forward, we expect to release future films directly to theaters, as well as on [premium video on demand] when that distribution outlet makes sense. We look forward to having additional private conversations with our exhibition partners.”
What do you guys think? Do you feel this is an overreaction on AMC’s part, or do you think they’re right to shut out all future Universal releases? Comment below, let me know. I’ll see y’all when the theaters reopen.
– David Dunn
SOURCE: The Hollywood Reporter, Wall Street Journal, Deadline