Why AMC Theatres Thinks It Can Stay Open While Other Theater Chains Plan To Close

Scream 2 movie theater

At this point, it seems like we'll likely be writing off the rest of 2020 when it comes to theatrical film releases. While there are still a couple of big movies still planning to hit theaters, like Pixar's Soul and Wonder Woman 1984, other films, like No Time To Die have been delayed into 2021, and as a result, Regal Cinemas, the second-largest theater chain in the U.S. has made the decision to shut down all the locations that only recently reopened. However, AMC Theaters will be staying open, largely, it seems due to the chain's recent VOD deal with Universal.

With Regal deciding to pause operations due to the lack of theatrical content on the horizon, it would be natural to turn one's eye to the other major chains, AMC and Cinemark, and see what their plans are. At this point, it seems that both are planning to remain open, and AMC's specific explanation for why it makes sense for the chain to do so is especially interesting because it's touting the recent agreement it made with Universal, a deal that only came about after AMC vowed to stop screening movies distributed by Universal entirely.

In the early days of the pandemic following the closing of all major theaters, Universal was the first studio to release a movie that had been planned for theaters, as a Premium VOD option. Following the release of that movie, Trolls World Tour, Universal said that PVOD was going to become a standard part of the studio's release strategy. This resulted in AMC saying the theater chain would stop screening Universal films entirely.

However, this past July the two sides came to an agreement that will see Universal releasing some films at home only 17 days after their theatrical premiere. In a statement to THR, AMC's Chairman-CEO Adam Aron said that, because the deal between the two companies means that AMC will see some share of the revenue from Universal's PVOD sales, it makes sense for the theaters to stay open. According to Aron...

Fortunately for AMC, our groundbreaking agreement with Universal Studios announced earlier this summer puts AMC in a position where we can open our theaters when others may feel the need to close. We are fully comfortable showing Universal films in our theaters, even as they implement premium video on demand as we have mutually agreed. This is because AMC will share in premium revenues coming from their early availability in the home.

While not specifically stated, it seems certain that AMC only gets to share in the PVOD revenue if the movies in question actually screen in AMC theaters, thus if the chain shuts down it not only loses whatever theatrical revenue is coming in, but it will also lose out on the PVOD money as well.

Having said that, there are only three Universal movies still on the theatrical schedule for this year. The Blumhouse horror-comedy Freaky, the animated The Croods: A New Age, and News of the World. However, there are also some potentially big movies coming in early 2021 as well, like the Jessica Chastain led action movie The 355 and the Jennifer Lopez rom-com in February.

The balance between the studios and the theaters is a tough thing to maintain right now. Movies get delayed, which results in one major theater chain losing and that decision could cause other movies to get delayed, which will have a negative impact on the theaters which remain open. At this point, we really have no idea when or how it all ends.

Dirk Libbey
Content Producer/Theme Park Beat

CinemaBlend’s resident theme park junkie and amateur Disney historian, Dirk began writing for CinemaBlend as a freelancer in 2015 before joining the site full-time in 2018. He has previously held positions as a Staff Writer and Games Editor, but has more recently transformed his true passion into his job as the head of the site's Theme Park section. He has previously done freelance work for various gaming and technology sites. Prior to starting his second career as a writer he worked for 12 years in sales for various companies within the consumer electronics industry. He has a degree in political science from the University of California, Davis.  Is an armchair Imagineer, Epcot Stan, Future Club 33 Member.