AMC Theatres, the global chain that owns Odeon Cinemas, has told Universal Pictures it will no longer screen its films anywhere in the world, as it makes a stand against the prospect of releasing new movies on domestic digital platforms.
The controversy erupted when, on Tuesday, NBCUniversal CEO Jeff Shell spoke to The Wall Street Journal about the success of Trolls World Tour - the sequel to the animated 2016 hit Trolls - which it released to rent on platforms like Apple TV and Amazon Prime because of the coronavirus pandemic
The experiment, forced on Universal in the absence of functioning cinemas, had exceeded the movie-maker’s expectations, and as a result, Shell said, “as soon as theatres reopen, we expect to release movies on both formats.”
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AMC, the largest cinema chain in the world, took strong exception to this change in release policy being announced unilaterally.
“This radical change by Universal to the business model that currently exists between our two companies represents nothing but downside for us and is categorically unacceptable to AMC Entertainment,” wrote AMC Theatres CEO and president Adam Aron, in a letter sent to Universal Studios chair Donna Langley.
He continued: “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 is disappointing to us, but Jeff’s comments as to Universal’s unilateral actions and intentions have left us with no choice,” Aron wrote. “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.”
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The retaliation sets up a confrontation that strikes at the heart of the future of film and cinema. Of course, it remains to be seen how films released in the two formats compete without economic lockdowns in place, but still, the success of Trolls World Tour in consumers’ living rooms was striking.
“The film, released three weeks ago, has reportedly generated $100m (£80m) as a premium video-on-demand (PVOD) title, priced at $19.99, with 5m rentals on services such as Apple TV and Amazon Prime Video,” The Guardian reports.
“Universal gets a greater cut of revenue from streaming services than cinema box office take, which means the film has made it the same amount of money as the first Trolls film did during its entire run in US cinemas.”
In response, Universal seemed unperturbed by AMC’s decision - setting up the prospect of an ongoing competition between physical cinema and on-demand digital platforms for new-release films.
“Going forward, we expect to release future films directly to theatres, as well as on PVOD when that distribution outlet makes sense. We look forward to having additional private conversations with our exhibition partners but are disappointed by this… attempt from AMC… to confuse our position and our actions,” a Universal representative said.
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