Just a few weeks ago, AMC Theatres was in the news for its struggle to pay its bills. Now the cinema chain, which is on the verge of filing for bankruptcy, is making not just threats but full-blown strikes against one of the major Hollywood studios. In an open letter to the head of Universal Pictures, AMC’s CEO, Adam Aron, announced a worldwide boycott of the studio’s movies.
“Effectively immediately,” reads the letter, addressed to Chairwoman Donna Langley, “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 theaters reopen, and is not some hollow or ill-considered threat.”
Here’s what led to this decision: as movie theaters began restricting attendance and then were forced to close because of the COVID-19 pandemic, Hollywood began moving most of its film releases to future dates. Universal’s latest Fast & Furious installment, F9, for instance, was delayed almost a year. Instead of opening on May 22, 2020, the sequel won’t hit screens until April 2, 2021.
But Universal also chose to maintain the release date of one of its upcoming titles by dropping the animated sequel Trolls World Tour onto VOD the same day as its theatrical opening — which only consisted of drive-in showings due to indoor cinemas being closed. Since then, the studio has also slated Judd Apatow’s latest, The King of Staten Island, for a similar release in June.
AMC’s response (without coordination from the National Associaton of Theatre Owners), came not after Universal’s announcement of the Trolls World Tour strategy but following NBCUniversal’s revelation of the movie’s financial figures. And not its initial record-breaking numbers but last week’s disclosure to the Wall Street Journal that the movie grossed $95 million in rentals over 19 days.
Obviously, NBCUniversal wanted to celebrate that amount as a win because that’s what corporations do. This was a relatively unprecedented gamble on their part, and it worked. The release was a success. But that’s not actually the issue. Here’s the quote from CEO Jeff Shell that really got AMC’s goat: “As soon as theaters reopen, we expect to release movies on both formats.”
Now, releasing some movies in theaters and releasing some movies straight to VOD is not even a new idea for any studio. The problem for AMC and theatre owners as a whole is when a movie is released simultaneously on both at the same time — that’s called “day-and-date” release. Many indie distributors do it. Even Lionsgate has done it. Sony once had to do it for a special situation.
Shell doesn’t say anything about releasing titles day-and-date after theaters reopen. He’s just pointing out that there may be some bigger releases that avoid theatrical release in favor of VOD. Trolls World Tour likely performed better the way it went out than it would have with a normal release because of the circumstances and because of box office trends with animated features lately.
Warner Bros. may come to the same conclusion with Scoob!, the animated Scooby-Doo film that will skip its originally intended wide theatrical release for a day-and-date opening next month. Disney has already been experiencing the benefits of dropping some of its movie releases to stream on Disney+ instead of going to theaters. Artemis Fowl will be their next to do so, this June.
Despite the claims in the AMC letter, the attack does appear to be a petty one, and it’s also hard to believe given that AMC would be giving up millions of dollars by not playing such movies as F9, the James Bond installment No Time to Die, and Minions: The Rise of Gru (a much more highly-anticipated animated sequel, hence its theatrical release hold rather than going the Trolls 2 route).
Yet doing so would also hurt the studio given that AMC is the largest movie theater chain in North America. Meanwhile, AMC needs NBCUniversal in the form of Fandango, the ticketing service partly owned by the media corporation. Again, that’s something that would suck for both of them if all partnerships between them ceased. AMC could be shooting their own industry in the foot.
For decades, there’s been an understanding that the theater industry needs Hollywood, and to a lesser extent there’s been an understanding that Hollywood needs the theater industry. Studios have gotten away with bullying and getting their own way sometimes because of the slightly unbalanced interdependence, but the industries have an unbreakable mutualistic bond.
Universal very well might have made more money by releasing Trolls World Tour in theaters and receiving half its box office gross, and then releasing the movie to VOD and receiving additional income there. Typically, it’s better for studios to have such tiered earnings windows, with theatrical release functioning as marketing for subsequent platforms as much as it’s its own moneymaking tier.
These are difficult times right now, and every company and industry is trying to do what’s best for the moment and the future. It’s probably not the best context for such a move, but this may be the only opportunity for AMC and NATO to have an upper hand and pressure Universal and the rest of Hollywood to stay away from further day-and-date releases after this is all over.
Unfortunately for AMC, their public negotiating strategy is all too transparent and they’re receiving more of the scrutiny from media big and small. Personally, I love my closest AMC option over the local competition, I subscribe to their monthly A-list plan, and I don’t want to see them go out of business. I also want to see Jurassic World: Dominion on one of AMC’s Dolby screens.
Fortunately for me and everyone else, they’ll make up. There’ll be some dealings to make it happen, just as there are when cable companies and networks dispute and settle following blackouts and threats of blackouts. Perhaps this won’t blow over as soon as July 10th, when Universal is still expected to put out the next Purge sequel, The Forever Purge, but it probably will if that date holds.
Ironically or intentionally, The Forever Purge would be another easy title to just drop to VOD if theaters aren’t actually open by midsummer. Then again, the Purge movies are among the few franchises that continue to exponentially increase worldwide box office with each installment. Trolls World Tour might look like the industry gamechanger now, but The Forever Purge could be instead.
Universal did make a bit of clarification in their rebuttal to AMC following the boycott announcement: “We absolutely believe in the theatrical experience and have made no statement to the contrary,” the studio’s official statement reads. “Going forward, we expect to release future films directly to theaters, as well as on PVOD when that distribution outlet makes sense.”
When that distribution outlet makes sense might be for the time being. But it’s clearly something that’s necessary for Universal and for consumers right now. The VOD and general home entertainment market is becoming bare with regards to major titles, and that just means Netflix, in particular, will continue to rise during the pandemic, and neither the studios nor theatre owners want that.
The industries need to look at this all as, hopefully, temporary measures. Just as theater owners shouldn’t be concerned about the new Academy Awards concession to allow straight-to-VOD titles to qualify this year — with strict guidelines that this is a special circumstance and films are only eligible if they’d had a theatrical date already — they shouldn’t be up in arms over the rest.
That said, Hollywood studios ought to be more conscious of what’s going on with movie theaters and their staff during the pandemic. Chains as big as AMC and independent cinemas alike are hurting and have few options the way studios and distributors have. The ones kicking back and finding ways to share what little wealth is to be made right now are doing the right thing.
Capitalism or not, we’re all in this together right now. And most of us, whether we’re makers, exhibitors, or viewers of movies, can’t wait to see those images on the big screen again as soon as we’re all safely permitted to do so. In the meantime, if we’re going to be complaining about each other, here’s an open letter to AMC from me: your popcorn is the worst; spend this time to fix that.