AMC Theatres Will Demand New Terms on Premium VOD Titles

AMC Theaters Logo 2011

The country’s second largest circuit says plans for a new VOD service threatens the health of the exhibition business.

AMC Theatres will demand new economic arrangements for any film that’s slotted to play on a new premium VOD service that’s set to debut on DirecTV later this month.

AMC—the country’s second largest circuit—has informed Warner Bros., Fox, Sony and Universal that the premium VOD plan threatens the health of the movie business at a time when exhibitors are spending hundreds of millions on digital conversion, as well as coming up with new ways to up movie attendance.

“The p-VOD world as currently defined threatens that health,” AMC said in a statement.

“We have notified studios of our expectations regarding economic arrangements on movies that go p-VoD. It is not wise to discuss details in the press, and company policy precludes it, but as these windows shrink and threaten our industry’s future, it is only logical to expect AMC to adapt its economic model,” the statement continued.

AMC appears to be going one step further than Regal Entertainment and Cinemark Entertainment—the country’s two other largest theater chains. Regal and Cinemark have responded to the P-VOD plan by saying they will drastically curtail the number of trailers they play from the four studios.

AMC is sure to want a greater share of the revenues on those titles.

What’s unclear is if AMC will demand to know ahead of time if a film is going to play on P-VOD. Studios, however, may not know when they book a movie.

“We at AMC feel movie theatres are a critically important business to many parties: the 200+ million guests we host year after year who choose to view films on the large screen; the communities of which our theatres are an integral part; the artists who create the movies we show; and ultimately the entertainment industry for which our theatres generate the highest quality source of revenue,” the statement continued.

“We believe the theatrical experience has a bright future, and we are aggressively investing to prepare for it. We are in the midst of a multi-year, multi-million dollar rollout of digital projection and 3D, IMAX and our own proprietary ETX format. We are also introducing a new guest rewards program, better-for-you items, enhanced food and beverage offerings, dine-in theatre options and alternative, engaging programming for our guests to enjoy in our comfortable, state-of-the-art auditoriums. All activities we are currently engaged in have common goals – to increase attendance at our theatres and maintain the health of our industry.”

While it's true that circuits have made a major financial investment in converting their theaters to digital, studios have contributed a large share by paying what are known as "virtual print fees."