AMC Theatres CEO Adam Aron Says Early PVOD Will Become "Industry Standard"

Adam Aron - Getty - H 2020
Amy Sussman/FilmMagic

The executive said a 17-day window would have been a perfect solution for Hollywood tentpoles such as 'Mulan.'

AMC Theatres CEO Adam Aron took a victory lap Thursday when discussing a historic agreement with Universal Pictures that shatters the traditional theatrical window and gives Universal the option of debuting a movie on premium VOD 17 days after it opens on the big screen.

“I expect this to become the industry standard,” Aron said during an earnings call in which he repeatedly stressed that AMC will receive an undisclosed, but handsome, cut of each PVOD rental. “This potential dramatic expansion of revenue should protect AMC against the cannibalization that will admittedly occur as some people shift straight to home viewing.”

For decades, exhibitors such as AMC have threatened to boycott any studio film that doesn't adhere to the traditional window of roughly three months. That posture has changed with the pandemic.

Aron said AMC is offering “similar arrangements” to all of its studio partners.

AMC, the world’s largest theater circuit, has been gutted by the pandemic, in part because of its previous debt load. On Thursday, the company reported the worst quarter in its 100-year history.

Aron said PVOD will result in more movies being made. He referred to a private correspondence from a studio exec that read: “Adam, you’re going to take heat for this action, but AMC just saved exhibition. Honestly, we were going to greenlight fewer and fewer movies.”

As for Disney's announcement earlier this week that Mulan will now go straight to Disney+ at a premium price of $29.99 in the U.S. and other select markets, Aron said he understands the decision.

Mulan was supposed to go to market. It got delayed and delayed. They are under pressure. At some point they have to monetize their movie product. They have a huge slate for 2020 and we will benefit mightily,” Aron said. “Most of all, it reaffirms the risk of [AMC] singing on to PVOD. The 17 days window would have been perfect for them.”

Without such options as PVOD, Aron said that more and more projects will go straight to Netflix and other streamers. “Exhibition will not receive a penny on any of these movies. Our capital cost in someone 's couch at home is precisely zero.”

Aron praised Warner Bros. for sticking to a traditional theatrical release for Christopher Nolan’s Tenet, which will begin opening late August, saying the studio is “doing something heroic.”