The threat comes after comments made by NBC Universal CEO Jeff Shell about what success means to the demand for family films for the future.
AMC Theaters Tuesday night delivered a blistering message to Universal Pictures, saying the world’s largest cinema network would no longer screen studio films after comments made by NBC Universal CEO Jeff Shell about the successful request from Troll World Tour and what it means for the future of the post-coronavirus pandemic that is happening in theaters.
Earlier in the day, Universal revealed that Troll World Tour according to the conglomerate’s estimate, renting out a $ 100 million premium VOD lease in the first three weeks in North America, more than enough to make the film a path to profitability. That’s not far behind the $ 116 million grossed out by the originals Troll in its first three weeks at the 2016 domestic box office en route to reach $ 153.7 million in the US and Canada and nearly $ 347 million globally, not adjusted for inflation.
Universal sends animated family films directly to PVOD amid the ongoing coronavirus pandemic and widespread theater closure.
“Results for Troll World Tour has exceeded our expectations and demonstrated the feasibility of PVOD, “said Shell That Wall Street Journal, The first reported the numbers. “As soon as the cinema reopens, we hope to release films in both formats.”
In a letter with harsh words to Universal Filmed Entertainment Group chairman Donna Langley, AMC Theaters CEO Adam Aron said Shell’s comments were unacceptable. AMC is the largest circuit in the world.
“This is disappointing to us, but Jeff’s comments about Universal’s unilateral actions and intentions have left us no choice. Therefore, AMC will effectively no longer screen Universal films in any cinema in the United States, Europe or Central. East,” Aron wrote.
“This policy affects every and all Universal films, which take effect today and when our cinema reopens, and is not an empty threat or a threat that is considered bad,” he continued. “Incidentally, this policy does not aim solely for Universal because of annoyance or to punish in any way, it also extends to any filmmaker who unilaterally abandons current windowing practices without negotiating good faith between us, so that they as distributors and us as exhibitors both benefited and no one was harmed by this change.Today, with today’s press comment, Universal is the only studio that is contemplating massive changes to the status quo.Therefore, this direct communication in response. “
Universal did not immediately respond to requests for comment.
Aron added: “Universal’s unilateral announcement on this issue is unacceptable to us, as is always the case, AMC is willing to sit down with Universal to discuss various window strategies and different economic models between your company and us. However, in the absence of such discussion that, and an acceptable conclusion to it, our decade of highly successful business activities together has ended miserably. “
AMC has been devastated because of its debt burden towards a pandemic. Following the closure of all AMC locations in the last half of March, Wall Street analysts predicted that the circuit would be forced to file Chapter 11 bankruptcy, but grew more bullish after the company issued a $ 500 million debt offer earlier this month (Aron himself was among the company’s staff on leave because closing).
The Aron letter closes in the afternoon high drama about Shell’s comments. The National Theater Owners Association is also considering, saying that while Universal might be happy with the PVOD results Troll World Tour, this result should not be interpreted as a “new normal” sign for Hollywood.
“Universal has no reason to use this unusual circumstance in an unprecedented environment as a stepping stone to cut the true theater release,” said NATO president and CEO John Fithian. “Theaters provide in-depth experiences and share loved ones that cannot be replicated – experiences that will be followed by many VOD viewers from this film if the world is not sequestered at home, desperately need something new to watch with their families. We are sure that when the theater reopens, the studio will continue to benefit from the global theater box office, followed by traditional home releases. “
For the most part, Universal – like other major Hollywood studios – has postponed film shows so they can have theater releases, including 59 and then Waiter.
Troll World Tour, together with Warner Bros. ‘ Scoob! and Disney Artemis Fowl, is an exception.
Cinema owners say they understand why some films may need to go straight to home entertainment, but Shell’s comments are shocking. “Universal has taken the first step to change the paradigm,” said a studio executive at another company, noting that film distributors had wanted to test PVOD early for years.
The current hope is that the theater will open on July 17 for Christopher Nolan’s Principle, followed by Mulan on July 24 and Wonder Woman 1984 in mid-August.
Read Aron’s complete letter to Langley, below.
During this national emergency and the corona virus wreaking havoc all over the world, I hope you and your loved ones are healthy and safe. I worry – and I hope for the best – for the health of all our industry partners. There has never been a more challenging time in our lives.
In the midst of a global pandemic as a background, I hope we avoid also having to overcome the different problems that arise from Universal’s ongoing actions.
For 100 years, AMC Theaters has served as a critical and very profitable distribution platform for filmmakers, during which the exclusivity of theatrical releases is fundamental. When a film is “Only in Theaters,” consumers think of it as high-quality entertainment. Countless filmmakers and cinema audiences believe that their creative work is best enjoyed by consumers on the big screen. And we all know that theatrical release actually increases publicity, positive word of mouth, critical acclaim and downstream income.
For the past four and a half years, I have had direct dialogue with Jeff Shell and Peter Levinsohn from Universal about the importance of a strong theater window for the feasibility of the film exhibition industry. During that time, AMC has stated its willingness to consider alternatives to the current windowing strategy that is common in our industry, where the aim of these alternatives is to increase studio profitability and the profitability of theater operators.
Universal said it was only pursuing a live entertainment release home for the “Troll World Tour” because the theater was closed and Universal was committed to a lucrative toy licensing agreement. We doubt that this is Universal’s full motivation, because Universal has long wanted to go to the home day and date. However, we accept this action as an exception to our long-standing business practices in an unprecedented period.
In the Wall Street Journal today, Jeff Shell is quoted as saying that:
“The results for the ‘Troll World Tour’ have exceeded our expectations and demonstrated the feasibility of PVOD,” said Mr. The shell. “As soon as the cinema reopens, we hope to release films in both formats.”
The radical change by Universal to the business model that currently exists between our two companies is nothing but a loss for us and is definitely unacceptable for AMC Entertainment, the largest collection of film theaters in the world.
Going forward, AMC will not license any Universal films among our 1,000 cinemas globally with this provision.
Therefore, we want to be very clear, so there is no ambiguity in any form. AMC believes that with this proposed action to go to the house and theater simultaneously, Universal violates the business model and transactions between our two companies. This assumes that we will humbly accept the reshaped views about how studios and exhibitors must interact, without paying attention to the Universal section about how their actions affect us. He also assumed that Universal could actually own the cake and eat it too, that Universal film products could be released to the home and theater at the same time, without modification to the current economic arrangements between us.
This was disappointing to us, but Jeff’s comments about Universal’s unilateral actions and intentions left us with no choice. Therefore, soon AMC will no longer screen Universal films in any cinema in the United States, Europe, or the Middle East. This policy affects any and all Universal films per se, taking effect today and when our cinema reopens, and is not an empty threat or a threat that is considered bad. Incidentally, this policy does not aim solely for Universal because of annoyance or to punish in any way, it also extends to any filmmaker who unilaterally abandons current windowing practices without negotiating in good faith between us, so that they as distributors and we as exhibitors both benefit and no one is harmed from these changes. Today, with today’s press comments, Universal is the only studio that is contemplating a wholesale change to the status quo. Hence, this direct communication as a response.
AMC has invested significant time and energy with Universal executives over the past few years trying to find out new windows models that will benefit both your studio and our theater operations. While Universal’s unilateral statement on this issue is not pleasant for us, as it always does, AMC is willing to sit down with Universal to discuss different window strategies and economic models between your company and us. However, in the absence of such discussion, and an acceptable conclusion to it, our decade of highly successful business activities together has ended miserably.
CEO and President
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