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Universal and AMC Theatres strike a deal allowing new films to play at home sooner

Universal and...

Posted: Jul 29, 2020 7:12 AM

Universal and AMC are mending their frayed relationship in a deal that not only reverses the theater chain's ban on Universal's movies but also appears to upend the traditional exclusivity model that studios and theaters have followed for decades.

Under the agreement, Universal's new films will have just three weekends — or 17 days — of exclusivity, rather than the customary 70 days. After that, Universal and its sister studio, Focus Features, has the option of releasing films on video on demand platforms.

That means that when "F9," the next film in the "Fast & Furious" franchise, hits theaters on April 2, 2021, consumers will have the choice to either see it in theaters or wait three weeks to buy or rent it at home.

That doesn't mean, however, that "F9" will pop up on NBCUniversal's new streaming service Peacock on day 18, but rather that consumers can watch it on a platform like iTunes at a premium price or in theaters.

The new multi-year dea applies only to AMC's US theaters, and it's unclear whether other studios will enter this new model in the future.

The announcement between Universal and AMC is a watershed moment for Hollywood.

Theaters and studios have been grappling for years over the "theatrical window" — or how long a film should be available in theaters before being offered on other platforms. The window usually ran for about 70 days, but now — at least for Universal — has been cut down to just 17.

For Universal, the studio is given the choice to release films for at home rental and purchases much faster than it has in the past. It can also keep films in theaters past the 17-day mark if wants.

Universal's announcement earlier this year that many of its new films would be bypassing theaters and heading to on-demand created a rift between the studio and AMC, which banned Universal's films in response.

The studio was also ahead of the curve by pushing many of its titles to next year earlier on rather than delaying them to later in 2020.

"The theatrical experience continues to be the cornerstone of our business," Donna Langley, Universal's chairman, said in a statement. "The partnership we've forged with AMC is driven by our collective desire to ensure a thriving future for the film distribution ecosystem and to meet consumer demand with flexibility and optionality."

For AMC, it would seem that the world's largest movie chain is throwing in the towel, but Adam Aron, AMC's CEO, said in a statement that "AMC enthusiastically embraces this new industry model."

"We are participating in the entirety of the economics of the new structure, and because 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," Aron said in a statement.

Aron added that the deal "preserves exclusivity for theatrical viewing" for at least the first three weekend of a film's release, "during which time a considerable majority of a movie's theatrical box office revenue typically is generated."

"AMC will also share in these new revenue streams that will come to the movie ecosystem from premium video on demand," he said. "So, in total, Universal and AMC each believe this will expand the market and benefit us all."

The coronavirus pandemic has upended AMC's business by shuttering its theaters worldwide since earlier this year. The chain announced last week that it would open theaters with new health measures next month.

"Universal and AMC have partnered in bringing stellar movies to moviegoers for a full century," Aron said. "With this historic industry changing agreement, together we will continue to do so and in a way that should drive success for us both."

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