Major Theater Chains Declare They Will No Longer Show Universal Studios Films Due to Coronavirus Response

(AP Photo/Orlin Wagner, File)

 

As the studio makes changes to its release platforms two cinema companies take a hardline stance.

With the pandemic creating both logistical challenges as well as effectively cutting off access to the target audiences, Hollywood has made a number of ongoing changes. One such move made by movie studios has been to transition its focus on the home streaming services. It has been a case of straining to find an audience in a completely unanticipated crisis, but one solution has rankled the nation’s largest theater chains.

With theaters closed down studios have been scrambling, some details we covered on this week’s episode of The Culture Shift. There has been a shift in numerous release schedules, to later dates, some as far out as next summer. The best measurement of the future for theaters has been the fact that the release of the latest title featuring The Minions, ”The Rise of Gru’’, has been pulled from the July 4th weekend. Meanwhile another anticipated hit, ”Wonder Woman 1984’’, has been shifted from its debut of next weekend to an August premiere. While these calendar adjustments are one solution the other has been what to do with current releases.

Universal Studios has become proactive with moving towards video on demand and that decision has been paying dividends. A number of its titles were released just prior to the closings, so a rapid segue into the VOD market was a sensible move. This broke formality, as normally a theatrical release does not reach the home market until three months following its debut in theaters; this is an agreement with exhibitors to allow them the full chance to enjoy a captive audience. Theaters being shuttered sees that agreement has been rendered null, at least for the moment.

That may change, going forward. Universal decided in March that the family animated sequel ”Trolls World Tour’’ – initially planned for a theatrical release – would make its debut on Premium Video On Demand, and this gambit paid off. Offered up for home viewing at $19.99 for a 48-hour viewing window, the title is coming close to matching the performance of the original. The first weekend saw ”Trolls WT’’ grossing $50 million, slightly edging out the debut of the original in theaters. To date, it has earned $100 million since its April 10 debut, almost at pace with the gross of the first entry.

This has the studio excited, and NBCUniversal CEO Jeff Shell was raving and hinted they would be exploring more such releases in the future. Said Shell, ”We expect to release movies on both formats.’’ While the exhibitors had little recourse currently with the options taken, the announcement that going forward Universal might be dispatching the release window agreement was met with a swift rebuke from the theater chains. AMC released a statement yesterday announcing Universal’s titles would no longer be shown on its screens.

This policy affects any and all Universal movies per se, goes into effect today and as our theaters reopen, and is not some hollow or ill-considered threat,” he continued. “Incidentally, this policy is not aimed solely at Universal out of pique or to be punitive in any way, it also extends to any movie maker who unilaterally abandons current windowing practices absent good faith negotiations between us, so that they as the distributor and we as exhibitor both benefit and neither are hurt from such changes.’’

The AMC decision was followed today by Cineworld, owner of the Regal movie theater chain. This morning’s announcement echoed that of AMC, in declaring it would cease showing Universal titles.

Universal’s move is completely inappropriate and certainly has nothing to do with good faith business practice, partnership and transparency,” Cineworld said.

It will be something to watch in the coming months to see if Universal alters course, considering something in the realm of 1,000 theaters would no longer be at its disposal. Or, whether it becomes seen that at least in the case of AMC that this is a toothless threat. Considering they have currently closed, a promise of denial is somewhat a delayed threat, but the other question to look at is whether AMC even survives this closing crisis.

As I covered earlier, depending on the length of the national quarantine, the economic conditions could spell doom for the AMC theater chain. It will not be something as simple as an opening date that can be looked at as a time of recovery. It is unknown how long it may take for audiences to return to normal levels. Factors such as anxiety to social distancing and how much disposable entertainment dollars remain will be unknown for many months to come.