April 28, 2020
by Carla Hay
On April 28, 2020, AMC Theatres (the world’s largest cinema company) announced that it is implementing a worldwide boycott of Universal Pictures because the movie studio broke the 90-day embargo for when a movie can be released on home video after being in movie theaters. The boycott was announced after Universal Pictures released the DreamWorks Animation film sequel “Trolls World Tour” directly to home video on April 10, 2020, the day that the movie had been scheduled to be released in movie theaters.
Corporate-owned movie theaters have traditionally refused to carry movies that are released on home video or streaming services within a 90-day period of the movies being released in movie theaters. These movies typically play at independently owned movie theaters, which do not have this strict 90-day embargo policy. It’s why Netflix movies do not play in major theater chains such as AMC, Regal, Cinemark and Cineplex.
Due to the coronavirus pandemic, AMC shut down all of its cinema locations in the U.S. and Canada, as of March 18, 2020. Almost all other movie theaters (corporate and independent) in the U.S., Canada and several other countries also closed the same week. As of this writing, most of the movie theaters have remained closed with no specific re-opening dates announced yet. The majority of AMC theater locations are in the United States, which has about 660 AMC theaters, making AMC the largest movie-theater chain in the U.S.
AMC Entertainment president/CEO Adam Aron issued a statement about the Universal Pictures boycott that read, in part: “Going forward, AMC will not license any Universal movies in any of our 1,000 theatres globally on these terms. Accordingly, we want to be absolutely clear, so that there is no ambiguity of any kind. 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. 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.”
The statement continues: “Therefore, effectively immediately AMC will no longer play any Universal movies in any of our theatres 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. 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. Currently, with the press comment today, Universal is the only studio contemplating a wholesale change to the status quo. Hence, this immediate communication in response.”
Universal Pictures released “Trolls World Tour” in North America at the premium video-on-demand (PVOD) rental price of $19.99, which allowed renters to watch the movie for up to 48 hours. Universal has not yet announced when “Trolls World Tour” will be available for purchase on digital, DVD or Blu-ray. On April 28, 2020, Universal Pictures announced that “Trolls World Tour” had revenue of $100 million in PVOD rentals in its first three weeks of availability in North America.
In the wake of the coronavirus pandemic, major and independent studios have dramatically changed their theatrical release schedules for their films, with most the theatrical releases getting pushed back several months. Universal Pictures movies whose theatrical release dates have been postponed and rescheduled include “Fast & Furious 9,” now due out on April 2, 2021; “Jurassic World: Dominion” (June 11, 2021); “Minions: The Rise of Gru” (July 2, 2021); and “Sing 2” (December 22, 2021). Universal Pictures’ next release after “Trolls World Tour” is the comedy “The King of Staten Island” (starring Pete Davidson and directed by Judd Apatow), which will be released directly to video on June 12, 2020, a week before the movie’s originally scheduled theatrical release date.
After the success of “Trolls World Tour” being released directly to video, Warner Bros. Pictures announced that it would follow a similar strategy for the animated Scooby Doo film “Scoob!,” which was originally scheduled to be released in theaters on May 15, 2020. The movie’s release date is still the same, but it will now be on digital and VOD. Unlike Universal’s rental-only strategy for “Trolls World Tour,” Warner Bros. is making “Scoob!” available for rent and purchase on the same day.
Meanwhile, AMC Theatres, like many other cinema companies, is reportedly running out of operational cash. The company is headquartered in Leawood, Kansas, but AMC is actually owned by the Chinese corporation Wanda Group. In October 2019, AMC began offering VOD rentals and purchases of digital film releases under the name AMC Theatres On Demand, but AMC’s studio boycott does not extend to that service. Universal Pictures titles (such as “The Invisible Man” and “The Hunt”) are still available on AMC Theatres On Demand.
So far, AMC is the only corporate-owned movie theater to announce that it is boycotting any studios that break the 90-day embargo. Alamo Drafthouse and Landmark are two of the independent cinema companies with several U.S. locations that do not limit their selections to movies that have a 90-day home-video/streaming service embargo, so this boycott war does not apply to them.
However, as long as any movie theaters are closed for an undetermined period of time, their financial clout has significantly weakened. Boycotted studios will just take their movies to other theaters that are willing to carry their films. And even after theaters have re-opened, no one knows yet how long it will take for business at movie theaters to get back to “normal,” or if the peak of cinema attendance is now a thing of the past.
April 29, 2020 UPDATE: Cineworld/Regal Cinemas has now joined the boycott. Click here for more details.
July 28, 2020 UPDATE: AMC Theaters and Universal Pictures have reached a truce in their feud. According to Variety, AMC has agreed to carry Universal’s films in AMC Theatres, as long as AMC can have those movies in AMC’s U.S. theaters for a minimum of 17 days, including three weekends.
After the 17 days, Universal will likely make the movies available through premium video on demand (PVOD), which allows viewers to rent a movie on digital and TV platforms for up to 48 hours, for about twice the cost of a regular, non-3D movie theater ticket. The agreement also says that three months after a movie’s theatrical release, the movie’s rental price can then drop to a regular VOD rental price range, which is about half the cost of a regular non-3D movie theater ticket.
The financial terms of the deal were not disclosed but AMC CEO Aron said that AMC will “share in these new revenue streams” with Universal. It has also not been revealed yet if AMC Theatres will have this policy for its locations outside the United States.
Click here for an updated list of other corona virus-related cancellations and postponements in the entertainment industry.
