AMC Theatres, Universal Collapsing Theatrical Window to 17 Days in Unprecedented Pact

The studio will have the option of making any of its titles, as well as films from Focus Features, available on premium VOD after just three weekends of play in cinemas.

In a stunning reversal, AMC Theatres has struck a historic agreement with Universal that will allow the studio's movies to be made available on premium video-on-demand after just 17 days of play in cinemas, including three weekends, the two companies announced Tuesday.

The deal — which presently only covers AMC's U.S. locations — shatters the traditional theatrical window, a longstanding policy that has required studios to play their films on the big screen for nearly three months before making films available in the home. The unprecedented move on the part of a mega-exhibitor has far-reaching implications for the film business — particularly amid the ongoing coronavirus pandemic and related theater closures — and is a major coup for Universal.

AMC, the country and world's largest theater chain, is expected to share in the revenue from PVOD. The debt-laden company was hit particularly hard because of the pandemic, although recently found new institutional investors.

More than any other studio, Universal has pushed for years to shorten the theatrical window, but it has backed down in the face of boycott threats from AMC and other major exhibitors. And in March, AMC CEO Adam Aron, in a sharp rebuke, said his company was going to boycott all Universal titles after the studio said it would make Trolls World Tour  immediately available on PVOD and in any theaters that were left open in early April. (NBCUniversal CEO Jeff Shell has been an ardent advocate for early home offerings and revealed in a subsequent interview that Trolls made a huge $100 million in U.S. PVOD rentals.)

Tuesday's announcement did not say what the cost for premium VOD titles would be, but Trolls and other recent films have been priced at $19.99 for a 48-hour rental window. Sources suggest AMC may receive 10 percent of each rental.

The PVOD policy was part of a multiyear agreement in which AMC agreed to play Universal films. The deal includes at least three weekends of theatrical exclusivity for all Universal Pictures and Focus Features theatrical releases, at which time the studio will have the option to make its titles available across PVOD platforms. Universal said its traditional windows for electronic sell-through and regular VOD remain unchanged.

In the coming weeks, the two companies will begin PVOD discussions regarding AMC locations overseas in Europe and the Middle East.

At the onset of the pandemic, Universal decided to move many of its 2020 tentpoles to 2021, including F9 and the next Jurassic World installment. The studio, however, does have international distribution rights to November’s James Bond pic No Time to Die. It’s unclear whether the AMC-Universal deal could impact the film in those territories where AMC operates. (MGM is the Bond film's domestic distributor.)

In a joint release, Universal and AMC said they reached the historic agreement based on their "shared commitment to a mutually beneficial long-term partnership that is focused on serving consumers worldwide, while preserving and enhancing the theatrical experience." Insiders added that the deal provides consumers with options during uncertain times.

“The theatrical experience continues to be the cornerstone of our business," said Donna Langley, chair of Universal Filmed Entertainment Group. "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.”

Added Aron: “AMC enthusiastically embraces this new industry model both because 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. This multi-year agreement preserves exclusivity for theatrical viewing for at least the first three weekends of a film’s release, during which time a considerable majority of a movie’s theatrical box office revenue typically is generated."

The exact terms of the deal are not being disclosed.