Universal has officially responded to AMC saying it will no longer show the studio's films in theaters when they reopen. In the weeks since the coronavirus pandemic took a turn for the worse in mid-March, most theaters have shut down and the movie release calendar has been virtually wiped clean until the middle of July. While the majority of delayed 2020 films have since been rescheduled or are expected to be, a select few have either gone or will go straight to streaming. Universal started this trend when it cancelled its original plans to release Trolls World Tour in theaters and moved it directly to VOD instead.
According to Universal, Trolls World Tour has already produced more revenue in less than three weeks of digital rentals than the first Trolls did after months in theaters. Because of this, the studio has announced its intention to release more films straight to VOD in the future, beginning with the Judd Apatow-Pete Davidson comedy The King of Staten Island in June. In response, AMC has announced it will no longer show Universal's movies once it's deemed safe for its theaters to reopen for business.
AMC's announcement has since gotten an official response from Universal, which you can read in full below:
Our goal in releasing Trolls: World Tour on PVOD was to deliver entertainment to people who are sheltering at home, while movie theatres and other forms of outside entertainment are unavailable. Based on the enthusiastic response to the film, we believe we made the right move. In fact, given the choice of not releasing Trolls: World Tour, which would not only have prevented consumers from experiencing the movie but also negatively impacted our partners and employees, the decision was clear. Our desire has always been to efficiently deliver entertainment to as wide an audience as possible. We absolutely believe in the theatrical experience and have made no statement to the contrary. As we stated earlier, going forward, we expect to release future films directly to theatres, as well as on PVOD when that distribution outlet makes sense. We look forward to having additional private conversations with our exhibition partners but are disappointed by this seemingly coordinated attempt from AMC and NATO to confuse our position and our actions.
The National Association of Theaters Owners (aka. NATO) has since issued its own response, claiming its statement about Universal was in no way coordinated with AMC's. You can read that in full below:
[On April 28] NATO issued a statement regarding Universal Studios’ public comments in the Wall Street Journal regarding that studios’ evaluation of the results of releasing the movie Trolls World Tour directly to the home without a theatrical release, and specifically that Universal would release future movies both theatrically and to the home.
Also today, according to various public press reports, AMC released a letter that company sent to Universal stating AMC’s individual company reaction to Universal’s public statement earlier in the day in the Wall Street Journal. NATO and AMC did not coordinate those statements in any way. Indeed, AMC had no comment on NATO’s draft statement when sent to NATO’s Board of Directors, nor did AMC participate in the Board deliberations regarding that statement. Regarding AMC’s reported letter to Universal, NATO had no involvement with nor knowledge of that letter before reading about it in the press.
Without any knowledge of the facts, or the common courtesy to inquire about those facts, Universal nonetheless made the reckless charge this evening that the company is “disappointed by this seemingly coordinated attempt from AMC and NATO to confuse our position and our actions.” Unfortunately Universal has a destructive tendency to both announce decisions affecting their exhibitor partners without actually consulting with those partners, and now of making unfounded accusations without consulting with their partners.
On the one hand, you can see where AMC is coming from. The window between major films releasing in theaters and streaming has been steadily eroding for years now, in spite of theater owners' best efforts to prevent this from happening. If anything, the pandemic will only cause the window to shrink even faster. At the same time (as Universal noted in their own response), Trolls World Tour is an unusual case and shows a VOD premiere can work, but only under the right circumstances. There's no guarantee The King of Staten Island or next month's SCOOB!(which Warner Bros. is also sending directly to VOD) will be as successful, even with everyone still stuck looking for new entertainment options at home. In other words, Trolls World Tour's success is mostly just further evidence of how much things have already changed in the era of streaming, and will only continue to evolve over the years ahead (well after the ongoing health crisis is over).
With Universal having delayed potential billion-dollar blockbusters like Fast & Furious 9 and Minions: The Rise of Gru to 2021 because of the virus (not to mention, it still has Jurassic World: Dominion scheduled for next year and plans to release No Time to Die internationally later this fall), it's also safe to assume AMC will eventually back down and once again agree to show their films after they've reopened for business. Given their financial issues both before and because of the pandemic, they'll have to for monetary reasons alone. Still, while it might be something of an empty threat, one can nevertheless understand why AMC would respond the way they did in this time of heightened uncertainty.
Source: Universal, NATO