Regal joins AMC in renouncing Universal’s proposed VOD future

Last Updated on August 5, 2021

Hot on the heels of yesterday's AMC Theater drama, the National Association of Theater Owners and Universal, Regal Entertainment owner Cineworld Group has offered their take on the release window dispute with respect to the straight-to-VOD distribution of TROLLS WORLD TOUR.

In commenting on its policy of bringing new films to the masses while adhering to an agreed-upon schedule, Cineworld Group said that its blueprint with regard to the window "is clear , well known in the industry and is part of our commercial deal with our movie suppliers… We make it clear again that we will not be showing movies that fail to respect the windows.” Cineworld then added that Universal's move to present DreamWorks Animation's TROLLS: WORLD TOUR via PVOD was "completely inappropriate." Still fuming, Cineworld also stated that Universal's decision to premiere the animated sequel in homes “certainly has nothing to do with good faith business practice, partnership and transparency.”

Today's heated update comes after AMC boss Adam Aron yesterday penned a letter to Universal Studios Chairman Donna Langley, as a response to NBC Universal CEO Jeff Shell’s statements in the Wall Street Journal focusing on the $95 million dollar PVOD success of TROLLS WORLD TOUR. In the article, Shell had told the oulet, “As soon as theaters reopen, we expect to release movies on both formats,” signaling a day-and-date theatrical-VOD pivot.

This reveal then prompted Aron to speak up, “Going forward, AMC will not license any Universal movies in any of our 1,000 theaters globally on these terms.” To be clear, this bold move also refers to AMC sites in the U.S., Europe and the Middle East. That's a lot of theater space, and a lot of dollars being cast into the ether. Aron then continued by saying that “any movie maker who unilaterally abandons current windowing practices absent good faith negotiations between us, so that as distributor and exhibitor both benefit and neither are hurt from such changes.”

Here is Cineworld's full statement from today:

Here is Cineworld’s statement in full from today:

Cineworld’s policy with respect to the window is clear, well known in the industry and is part of our commercial deal with our movie suppliers. We invest heavily in our cinemas across the globe and this allows the movie studios to provide customers all around the world to watch the movies in the best experience. There is no argument that the big screen is the best way to watch a movie.

Universal unilaterally chose to break our understanding and did so at the height of the Covid-19 crisis when our business is closed, more than 35,000 employees are at home and when we do not yet have a clear date for the reopening of our cinemas.

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

Mooky Greidinger, Cineworld’s CEO approached Brian Roberts, the Chairman of Comcast, back in 19th of March (after Universal announced that Trolls 2 would be released in breach of the window) and told him among other things that:

“Nice words from your team are worthless if we cannot trust you as a partner. The message that the media has portrayed is: “Hollywood breaks the window” – well, this is not true! All our partners called us in timely manner and told us that in the current situation they want to shorten window for movies that were already released as cinemas are closing, most importantly, they all reassured us that there will be no change to their window policy once the cinema business returned. Unfortunately I missed similar message in Universal’s announcement… not only did Universal provide no commitment for the future window – but Universal was the only studio that tried to take advantage of the current crisis and provide a ‘day-and-date’ release of a movie that was not yet released”.

Cineworld’s roots go back 90 years in the industry and it was always open to showing any movie as long as the rules were kept and not changed by one sided moves. Today we make it clear again that we will not be showing movies that fail to respect the windows as it does not make any economic sense for us.

We have full confidence in the industry’s current business model. No one should forget that the theatrical side of this industry generated an all-time record income of $42 billion last year and the movie distributors’ share of this was about $20 billion.

It's to be understood that there are powerful opinions and policies on both sides of this raging river. In looking at the exchanges between those involved, it would appear as if theaters know that they're losing money if VOD becomes a viable platform for major studio productions. With the success of TROLLS WORLD TOUR, AMC understands that there's a potential for them to lose money. Perhaps their threat to Universal serves as something of a warning to other studios? If Regal and other major chains follow suit, AMC could be of the mind that they can make Universal back down. Here's the rub though, you should never question a movie studio when profits are on the line.

What do you think of this Hatfields and McCoys business between film studios and the theaters that screen their product? Is VOD a viable option going forward for films across the board, or should restrictions be implemented that would keep potential blockbusters theater-first, above all else? Let us hear your thoughts in the comments section below.