Universal movies to go to PVOD after three weekends of theatrical release in landmark deal

Comcast-owned Universal has struck a deal to enable its films to go to premium video-on-demand only 17 days after exhibiting in AMC Entertainment4 theatres across the US in a move that is likely to have significant ramifications for the cinema and VOD businesses in the country and beyond.

The agreement includes at least three weekends, or 17-days, of theatrical exclusivity for all Universal Pictures and Focus Features theatrical releases, at which time the studio will have the option to make its titles available across premium VOD platforms, including through AMC Theatres On Demand. In the coming weeks, the two companies will begin discussions surrounding international distribution agreements in the countries in Europe and the Middle East served by AMC.

Universal’s traditional windows for electronic sell through and video on demand remain unchanged.

The deal follows a period when the pair came to blows over the decision by Universal to release Trolls World Tour straight to PVOD alongside theatrical distribution in a small number of drive-in theatres. Suggestions that Universal would expand this experiment to other movies, including after COVID-19 restrictions were lifted, brought about a rupture with AMC, which claimed that the studio was breaking the business model that existed between the two companies.

UFEG is working with AMC and other exhibition partners on plans to restart theatrical releases with a slate of films upcoming instalments in the blockbuster Fast & Furious, Jurassic World and Illumination’s Despicable Me/Minions franchises, among other titles.

The full terms of the deal are confidential and are not being disclosed.

Donna Langley, chairman, Universal Filmed Entertainment Group, said: “The theatrical experience continues to be the cornerstone of our business. The partnership we’ve forged with AMC is driven by our collective desire to ensure a thriving future for the film distribution ecosystem and to meet consumer demand with flexibility and optionality.”

Vice Chairman and Chief Distribution Officer of UFEG Peter Levinsohn, who led negotiations on behalf of the studio, said; “Universal’s commitment to innovation in how we deliver content to audiences is what our artists, partners and shareholders all expect of us, and we are excited about the opportunity this new structure presents to grow our business. We are grateful to AMC for their partnership and the leadership they have shown in working with us to reach this historic deal.”

AMC CEO Adam Aron said that “AMC enthusiastically embraces this new industry model both because we are participating in the entirety of the economics of the new structure, and because premium video on demand creates the added potential for increased movie studio profitability, which should in turn lead to the green-lighting of more theatrical movies”.

Aron said that the 17-day period would cover the three weekends when “a considerable majority of a movie’s theatrical box office revenue typically is generated” and added that “AMC will also share in these new revenue streams that will come to the movie ecosystem from premium video on demand”.

Aron said “that just as restaurants have thrived even though every home has a kitchen, AMC is highly confident that moviegoers will come to our theatres in huge numbers in a post-pandemic world”.