Once upon a time, we watched a new film in movie theaters, and we then had to wait months for it to come out on DVD or On Demand. But like Bob Dylan wisely said, the times, they are a-changin’. Universal Studios and AMC Theaters have put aside their differences and struck a historic deal. Once declared that they would never be allowed to show their movies in an AMC establishment again, Universal has patched up their working relationship with the titan of movie exhibitors – with the caveat that Universal is allowed to digitally release their movies within 17 days of their theatrical debut.
In exchange, AMC gets a cut of those early digital sales, up until three months after the initial release. It should be said that all new Universal films on demand will only be available for rental during this period. Rental prices are also likely to be initially higher, due to splitting the profits with AMC.
AMC CEO Adam Aron said, “AMC enthusiastically embraces this new industry model both because we are participating in the entirety of the economics of the new structure, and because premium video on demand creates the added potential for increased movie studio profitability, which should in turn lead to the green-lighting of more theatrical movies.”
Universal chairperson Donna Langley added, “The theatrical experience continues to be the cornerstone of our business. 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.”
This isn’t just setting a precedent for Universal and AMC. This is setting a precedent for the entire system of how new films are released to the public. Before we know it, Paramount, Disney, and all the other big studios could be demanding such a deal from theater chains. Suffice it to say that the COVID-19 pandemic has changed the cinema landscape indelibly. The question is, will other movie theaters be able to adapt?
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