Oh boy. Here we go. Owing to the COVID-19 crisis, many studios have had to make some tough choices regarding the films on their slate; for many, it meant pushing those films back by months or even years, but Universal Pictures took the bold step of releasing movies which were destined for theaters exclusively on VOD. Universal launched TROLLS WORLD TOUR earlier this month, and the move has proven to be a resounding success as it has seen nearly 5 million rentals and earned close to $100 million in digital rental fees. However, one organization who isn't happy about the success of TROLLS WORLD TOUR is AMC Theatres, and the chain has sent a harsh message to Universal Pictures.
"The results for Trolls World Tour have exceeded our expectations and demonstrated the viability of PVOD," NBCUniversal CEO Jeff Shell told the Wall Street Journal. "As soon as theaters reopen, we expect to release movies on both formats." Not so fast, Mr. Shell. AMC Theatres chair-CEO Adam Aron penned a letter to Universal Filmed Entertainment Group chairman Donna Langley which vowed that the theater chain will no longer play any Universal movies in their theatres across the United States, Europe, or the Middle East.
It is disappointing to us, but Jeff’s comments as to Universal’s unilateral actions and intentions have left us with no choice. 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. This policy affects any and all Universal movies per se, goes into effect today and as our theatres reopen, and is not some hollow or ill-considered threat. 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 distributor and we as exhibitor both benefit and neither are hurt from such changes. Currently, with the press comment today, Universal is the only studio contemplating a wholesale change to the status quo. Hence, this immediate communication in response.
"Universal’s unilateral pronouncements on this issue are unpalatable to us, as has always been the case, AMC is willing to sit down with Universal to discuss different windows strategies and different economic models between your company and ours," Aron continued. "However, in the absence of such discussions, and an acceptable conclusion thereto, our decades of incredibly successful business activity together has sadly come to an end." If they're serious, AMC Theatres may have to extend their threat to Warner Bros. as well as the studio announced last week that they will be making their animated Scooby-Doo film, SCOOB!, available both to rent (48 hour rental) and to buy digitally on May 15th.
What do you think? Is AMC in the right to do this?