All hell broke loose this week, when AMC Theatres, the world’s largest theatre company, threatened to ban Universal Studios movies from playing in its theatres. Things became even messier when another prominent theatre chain, Cineworld, which operates Regal Entertainment, threw its weight behind AMC Theatres, and joined in the chorus. So what is the matter, which has reached boiling point, all about? Let’s find out.
Universal Studios, Hollywood’s largest movie production house, was the first U.S. movie maker to release its much-awaited movie ‘Trolls World Tour’ on digital VOD in the wake of the coronavirus shutdown. Interestingly, Universal arrived at the aforementioned decision even before the shutdown of theatres was announced. Though several theatre owners were unhappy with Universal’s move they kept mum looking at the COVID-19 situation on hand.
Now, this week, The Wall Street Journal announced that Universal’s move to release Trolls World Tour on VOD had hit pay dirt. The Trolls sequel had been more profitable for Universal than the original, because of its on-demand release, and not having to pay theatres 50% of the box office collection, which studios conventionally do.
Not only did Universal gloat over this fact, but also made a controversial announcement that made AMC see red. Jeff Shell, NBCUniversal’s CEO, suggested that Universal might start to simultaneously release some movies in theaters and on-demand, even after the pandemic subsides.
In a statement to the Wall Street Journal, Shell said, “As soon as theaters reopen, we expect to release movies on both formats,” which apparently means that Universal plans to shift to a business model where it will release its movies simultaneously in theatres and on digital, even after theatres reopen.
AMC Theatres retaliated by proclaiming that it was banning Universal Studios and would no longer play Universal movies in its theatres.
Universal Studios then put out a statement clarifying their position on the matter, which read, “Our goal in releasing Trolls: World Tour on PVOD was to deliver entertainment to people who are sheltering at home, while movie theatres and other forms of outside entertainment are unavailable. Based on the enthusiastic response to the film, we believe we made the right move. In fact, given the choice of not releasing Trolls: World Tour, which would not only have prevented consumers from experiencing the movie but also negatively impacted our partners and employees, the decision was clear. Our desire has always been to efficiently deliver entertainment to as wide an audience as possible. We absolutely believe in the theatrical experience and have made no statement to the contrary. As we stated earlier, going forward, we expect to release future films directly to theatres, as well as on PVOD when that distribution outlet makes sense.”
Soon, the National Association of Theatre Owners (NATO) jumped into the fray, by putting out their view on the raging controversy. It said, “The success of Trolls World Tour on VOD is due to hundreds of millions of people being isolated in their homes and seeking entertainment, not a shift in consumer viewing preferences.”
Added NATO president and CEO John Fithian in a statement to the media, “Universal does not have reason to use unusual circumstances in an unprecedented environment as a springboard to bypass true theatrical releases. Theaters provide a beloved immersive, shared experience that cannot be replicated – an experience that many of the VOD viewers of this film would have participated in had the world not been sequestered at home, desperate for something new to watch with their families.”
“While Universal may be pleased with the PVOD results of ‘Trolls World Tour,’ this outcome should not be interpreted as a sign of a ‘new normal’ for Hollywood,” added NATO.
Even as matters came to a head, Regal Entertainment owner Cineworld Group joined in the chorus against Universal Studios the next day. It released a statement saying that it would not play movies that failed to respect the windows. It said, “There is no argument that the big screen is the best way to watch a movie. Universal unilaterally chose to break our understanding and did so at the height of the Covid-19 crisis when our business is closed, more than 35,000 employees are at home and when we do not yet have a clear date for the reopening of our cinemas. Universal’s move is completely inappropriate and certainly has nothing to do with good faith business practice, partnership and transparency.”
“Cineworld’s roots go back 90 years in the industry and it was always open to showing any movie as long as the rules were kept and not changed by one sided moves. Today we make it clear again that we will not be showing movies that fail to respect the windows as it does not make any economic sense for us,” added Cineworld.
Watch this space at Binged.com for further updates on this issue.
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