Universal and AMC Theaters have recently announced a multi-year agreement that will allow the largest theater chain in the U.S. to screen Universal titles for 17 days, whereupon these can hit Premium Video on Demand (PVOD) platforms. It’s a game-changing deal that further shrinks the theatrical window—traditionally spanning 90 days—that allows films to show in cinemas before they can be released to VOD services. This isn’t just a move that will change the future of two entertainment giants, but one that’s poised to reshape our movie-going habits: how exactly will it change the kind of films we may expect to watch on a big screen?
Admittedly, the debate over shorter theatrical windows has been raging for years, with cinemas notoriously cautious about trimming runs on their screens. Back in March, as theatres began to shut in response to the pandemic, Universal made the then-unprecedented decision to ship its Trolls World Tour straight to VOD instead of waiting for a theatrical turn, to which AMC responded by threatening not to show any Universal films on their screens anymore. What made the chain agree to a markedly shorter window just a few months later? Supporters of the deal contended that the old 90-day window didn’t exactly favor anyone anymore. As Austen Goslin observes over at Polygon:
These days, movies’ box office performance is largely front-loaded into their first few weekends of release. They’re quickly replaced by other films, often from the same studios that produced the previous hit. With this new quickened pace, the 70- to 90-day window of exclusivity doesn’t really make sense for anyone. Most movies would fall into a dead zone during which they were no longer in theaters and couldn’t be released on VOD or Blu-ray. In other words, no one was making money on them for almost two months. This new deal should help fix that problem.
Crucially, the agreement also grants AMC a slice of Universal’s PVOD revenues. As Box Office Pro’s Chief Analyst Shawn Robbins tells Brandon Katz at Observer, this could allow theatres to offset some of the loss of a longer theatrical window:
…but the expectation here is that Universal still recognizes the importance of those longer runs for films doing well at the box office. Conversely, if a film underperforms theatrically, the studio now has some leeway to push it across multiple platforms without the dead space between theaters dropping it after two weekends — to make room for more lucrative titles — and a home video release months later.
But as Chris Lee remarks at Vulture, the agreement is hardly a one-size-fits-all scenario. The exact figures around AMC’s PVOD revenue share haven’t been revealed yet, but it’d be naive to presume smaller and independent theatres will be in a position to negotiate the exact same terms as the nation’s largest cinema chain. The deal may turn into a win-win scenario for AMC-sized companies, but for less powerful businesses, it could be the last nail in the coffin. As Brent Lang, Rebecca Rubin and Matt Donnelly suggest at Variety:
The big [theatre] chains will be able to use their size to ink better deals, but smaller, mom-and-pop businesses won’t have the same kind of bargaining power. They’ll have to accept a new normal for their industry — the perimeters of which will be determined by mega conglomerates and corporate giants that don’t care how much popcorn they need to sell to keep the marquee lights on. Many of these cinemas were teetering on the edge of financial ruin. If the theatrical window keeps cracking, or people decide it’s too great a risk to return to cinemas in a pandemic, it could mean they’ll be forced to roll credits.
Regardless of their size and bargaining power, there’s a clear risk the deal could grow into a Trojan horse for all cinemas—further dissuading audiences from flocking to the theatres if films are available on their home screens faster than ever. That accounts for much of the skepticism some AMC competitors have expressed over the deal, among them Cineworld and Regal, which will continue to screen only films that respect the traditional theatrical window, Screen International’s Jeremy Kay reports.
But boycotting Universal titles is a choice not all theatres will be able to afford. As Rebecca Rubin argues at Variety, “more likely than not, many [theatres] will recognize it’ll be hard to pass up installments from big franchises like Fast & Furious and Despicable Me—the kinds of tentpoles that draw major crowds and generate huge popcorn sales.”
And herein lies what’s possibly the biggest concern surrounding the agreement: will theatres turn into a blockbusters-exclusive domain? Technically speaking, the deal doesn’t mandate that every new Universal release will move to PVOD in 17 days; it only means they have the option if a title performs below expectations. As Steven Zeitchik predicts at The Washington Post, major studio hits will presumably outlive their 17-day theatrical window:
Universal [is] unlikely to pull its biggest films to a low-revenue on-demand platform after just three weekends, when the company could still add more than 25 percent to its box-office total. “Jurassic World,” one of Universal’s biggest modern-day hits, garnered an extra $150 million after its third weekend on top of the $500 million it had already made.
Conversely, smaller films that need to build word-of-mouth are more likely to be shuttled onto PVOD. And this is catastrophic news. As former managing editor of The Playlist Kevin Jagernauth observed on Twitter, it took Bong Joon-ho’s Best Picture Oscar-winning Parasite 19 weeks in theatrical release to build up to playing in 2000 theatres across the country. And the chasm between blockbusters and smaller films is all the more problematic when you consider the deal with AMC covers Universal’s arthouse subsidiary Focus Features division. Some of the testimonies gathered by Brooks Barnes and Nicole Sperling at The New York Times echo Jagernauth’s concerns:
…art-house movies tend to build an audience slowly over months of theatrical play, unlike Universal’s core offerings, which sell most of their tickets in their first and second weekends. “Focus [Features] is part of this program, and they are one of the most important indie film distributors on the planet, so I’m really concerned about the future of independent film,” Ted Mundorff, the president of ArcLight Cinemas in Los Angeles, said in a phone interview. “I can’t see that indie film can survive with shortened windows.”
That’s largely because, as Matt Goldberg posits at Collider, the deal will make it harder to discover new voices:
The AMC-Universal deal probably won’t affect established talent in Hollywood, but it creates a new divide where smaller films and rising filmmakers who were already struggling to make their voices heard will have an even tougher time in a landscape that prioritizes blockbusters and shuttles mid-range and indie pictures to a PVOD wasteland where the consumer will ponder if they want to pay $20 to watch a movie, or if they’ll just flip over to other content on Netflix or Amazon. With a release window of just 17 days, there’s no time to build word of mouth for the next Lulu Wang.
The picture looks grim, but there’s still room for some cautious optimism. “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,” AMC CEO Adam Aron suggested in a statement quoted by Anthony D’Alessandro at Deadline. Wishful-thinking as that may sound, the deal may end up granting studios the freedom to put more movies on cinemas, thus diversifying their theatrical offers while decreasing the number of titles sent straight to streaming services. Whether or not those titles will be granted sufficiently long runs on the big screen remains to be seen, but to borrow again from Variety’s Brent Lang, Rebecca Rubin and Matt Donnelly, the hope is that studios will now be in a position to back movies that aren’t solely about superheroes:
The excuse from Hollywood, as of late, has always been that it’s too hard to build word-of-mouth for movies that are edgier or more challenging to market. Since it routinely costs tens of millions of dollars to advertise and distribute movies, it’s hard to make a profit on anything that doesn’t have a huge opening weekend. AMC and Universal’s deal would theoretically alleviate some of those pressures, enabling the studio to find alternate ways of earn money on a film that’s failing to catch fire at the box office. If better movies can come out of all of this tumult, that would be a win for studios, theaters, and audiences. That’s a Hollywood ending everyone could get behind.
The Current Debate is a biweekly column that connects the dots between great writing about a topic in the wider film conversation.