We never thought that Trolls World Tour would be the movie that changed Hollywood, but we also didn’t expect a global pandemic to completely disrupt the already shaky balance between movie theaters and at home steaming. Even so, this is where we are, in a world where the success of Trolls World Tour made AMC pictures declare they won’t show any Universal movies.
AMC CEO Adam Aron announced the shocking decision on Tuesday in a letter to Universal Chairman Don Langley. The decision to ban all Universal movies came after Universal’s CEO Jeff Shell gave an interview to The Wall Street Journal celebrating the success of the direct to streaming release of Trolls World Tour.
Shell was understandably happy that Trolls made nearly $100 million on the VOD release. After dozen of films delayed their releases entirely, Trolls took the risk of going direct to a “premium rental” release, and it worked, with Trolls World Tour out-grossing the original’s theatrical release (it also helps that the movie is way better than the first). For Universal, or at least for Shell as he was speaking to the WSJ, this was proof of concept leading him to declare “soon as theaters reopen, we expect to release movies on both formats.”
The idea that AMC would be competing with streaming was “unacceptable” to Aron, as he stated in his letter to Universal. AMC apparently allowed the release of Trolls World Your direct to streaming without protest because of the “unprecedented times” due to the coronavirus shutdowns. But the possibility that Universal would keep this up after theaters reopen is not something AMC is willing to take. And thus, they reacted like an angry toddler and took their ball because Universal wanted to play with other kids.
“It is disappointing to us, but Jeff’s comments as to Universal’s unilateral actions and intentions have left us with no choice,” Aron explained. “Therefore, effectively immediately AMC will no longer play any Universal movies in any of our theatres in the United States, Europe or the Middle East.”
This, of course, leaves many asking: can they do that?
Well, yes, they can. The idea that studios don’t control their own distribution or own theaters is actually foundational to how Hollywood has operated for the past fifty-plus years. It all goes back to a Supreme Court Case called United States v. Paramount that ruled it was a monopoly for studios to own theaters, and thus the old Hollywood studio system (where studios owned not only theaters but everyone who made movies was on contract) slowly eroded away. But the rules that kept studios from reestablishing those sorts of monopolies are now themselves eroding, thanks to actions by the Trump administration. Oh, and a massive exception to those rules? Disney.
We’ve all been talking for years about the theatrical window is closing. With best picture nominees going right to Netflix and the Oscars just yesterday saying that movies don’t need a theatrical release to be nominated this year, it could very well be that the coronavirus is what changes theaters and movie-watching forever.
But even so, banning ALL Universal movies from their theaters is a huge move for AMC. The movies that they now say they won’t show include includes Fast 9 and the Jurassic World franchise, and that’s a huge blow to both AMC and Universal. AMC is the biggest movie chain in the country, but as the success of Trolls has shown Universal can still make money without theaters. AMC, not so much. Last month, the company was reportedly close to filing for bankruptcy, but things may have turned around, according to their own reports.
Universal responded to the move by AMC by saying … pretty much what had already been said. They expressed disapointment in AMC’s little fit, reaffirmed their commitment to the “theatrical experience,” and defended their (correct) decision to release Trolls World Tour digitally.
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 theaters, 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.
It will be more than interesting to see how this plays out in the coming weeks and even years. If nothing else is clear it’s that the way we see movies, which was already changing, may never be the same when the theaters open up again.
(via: CNN Bussiness, image: Universal/Dreamworks)
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