During the on-going COVID-19 pandemic, the flames of conflict between theatrical and digital releases in Hollywood have been flamed. Studios have been forced to make massive decisions with huge titles in recent weeks regarding whether to delay big screen distribution or simply make content available online, and companies that have opted for the latter route have earned the ire of the world's biggest cinema chains. Now it seems that the conflict has reached a boiling point of sorts, as AMC Theaters has announced that they will no longer screen films from Universal Pictures following the premium VOD release of the animated Trolls World Tour and comments made by NBCUniversal CEO Jeff Shell.
The news of this split comes from the The Hollywood Reporter, which has posted an open letter written by AMC Theatres chair-CEO Adam Aron to Universal Filmed Entertainment Group chairman Donna Langley. What sparked the move was a comment made by Jeff Shell earlier today following the studio releasing numbers showing that Trolls World Tour had made over $100 million in digital rentals. After noting that the numbers exceeded his expectations, he added, "As soon as theaters reopen, we expect to release movies on both formats.” In reaction to these said intentions, Aron wrote that his company was left with "no choice."
Therefore, effectively immediately AMC will no longer play any Universal movies in any of our theaters 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 theatres reopen, and is not some hollow or ill-considered threat.
In case it isn't clear to you, this is a rather massive stance to take, as what we are seeing here is the biggest theater chain in the world going toe-to-toe with one of the biggest movie studios in the world. Universal has a rather massive slate of films set to come out in the next couple of years, including F9, Halloween Kills, Jurassic Park: Dominion, and Minions: The Rise Of Gru, and by not releasing them AMC Theaters is sacrificing the sale of a lot of tickets a.k.a profit. The problem for the studio is that it's going to be seriously hard for those titles to make money if they aren't playing in the 10,000+ AMC locations around the world.
Taking things a step further, Adam Aron's letter also notes that his company's policy won't necessarily be limited to the current conflict with Universal. He notes that the same moves will be made against any company that makes moves to significantly disrupt the current status of theatrical and digital distribution. The executive wrote,
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.
Those who have been following the film industry in the last decade or so are aware that this is definitely not a new conflict, but it now has most certainly reached a new level of escalation. The ever-growing ubiquity of both high speed home internet and streaming services have led many to start questioning the Hollywood distribution system that has been in place for decades, and as a result theater chains have had to go on the defensive. The battle between the big screen experience and the comforts of home has been tense for a long time now, and the COVID-19 pandemic has unfortunately evolved things to a scary place.
What comes next will be Universal Pictures' response to the bold move made by AMC Theaters, and it will either be one of contrition, or potentially one that goes on the offensive. Needless to say, this is a development that has arrested our attention, and we will continue to deliver updates as the situation progresses.