The Trolls World Tour Dilemma
Things are getting ugly between AMC Theaters and Universal Pictures. In the wake of Jeff Shell’s (CEO of NBCUniversal) decision to open titles on premium and movies at the same time, AMC has decided not to play any film from the studio. This all essentially stems from Universal’s decision to release Trolls World Tour on PVOD on April 10th. According to the studio, Trolls World Tour has made about $100 million in premium VOD rentals since its release.
Shell stated:
“The results for ‘Trolls World Tour’ have exceeded our expectations and demonstrated the viability of PVOD. As soon as theaters reopen, we expect to release movies on both formats.”
Movies typically waited about ninety days after theatrical release to release a movie digitally, but this was before the country was essentially shut down due to the COVID-19 pandemic. This definitely irked AMC Theaters, whose chairman-CEO Adam Aron expressed that this broke the 90-day window. This disgruntled attitude was felt in a strongly worded letter to Universal Filmed Entertainment Group Chairman Donna Langley:
The Letter
“It is disappointing to us, but Jeff’s comments as to Universal’s unilateral actions and intentions have left us with no choice,” Aron said in the letter. “Therefore, effectively immediately AMC will no longer play any Universal movies in any of our theaters 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 theaters 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,” Aron said. “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,” he said. “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.”
This is definitely huge and could mean that AMC won’t play upcoming titles such as the next Fast & Furious film, Minions: The Rise of Gu, and even Jurassic World: Dominion. These seem like lucrative films that AMC will be missing out on due to hurt feelings.
Universal Response
A Universal Pictures rep stated back:
“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.”
They continued:
“Our desire has always been to efficiently deliver entertainment to as wide an audience as possible,” Universal said. “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.”
NATO Steps In
NATO also decided to weigh in on The Trolls World Tour controversy:
“This performance is indicative of hundreds of millions of people isolated in their homes seeking entertainment, not a shift in consumer movie viewing preference,” the trade group said. “It is not surprising that people under shelter-in-home ordinances for weeks on end with increasingly limited entertainment options would take advantage of the movie’s direct-to-VOD move to keep children entertained, even at a premium price. Further, Universal heavily marketed the title as a theatrical release, in theaters and elsewhere, for weeks on end. That is unlikely to recur in normal times, and those costs haven’t been disclosed.”
“Universal does not have reason to use unusual circumstances in an unprecedented environment as a springboard to bypass true theatrical releases,” said NATO president and CEO John Fithian. “Theaters provide a beloved immersive, shared experience that cannot be replicated – an experience that many of the VOD viewers of this film would have participated in had the world not been sequestered at home, desperate for something new to watch with their families. We are confident that when theaters reopen, studios will continue to benefit from the global theatrical box office, followed by traditional home release.”
What do you make of all this drama?
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