LOS ANGELES (CelebrityAccess) — The coronavirus pandemic continues to shake up Hollywood’s long-established theatrical release system where movie cinema operators get first crack at presenting the latest Hollywood blockbusters.
The latest fracture in the relationship between the studios and cinemas follows a public statement by NBCUniversal CEO Jeff Shell, who told the Wall Street Journal this week that the success of the release of Universal’s “Trolls World Tour” directly to streaming services for rental had been an unheralded success and would be replicated in the future with additional new releases.
“The results for ‘Trolls World Tour’ have exceeded our expectations and demonstrated the viability of PVOD (paid video on demand),” Mr. Shell said. “As soon as theaters reopen, we expect to release movies on both formats.”
The response to Mr. Shell’s comments from major theatrical chains was swift. On Tuesday, cinema chain AMC announced they will no longer license any of Universal’s films in their network of more than 1000 cinemas.
“We want to be absolutely clear, so that there is no ambiguity of any kind. AMC believes that with this proposed action to go to the home and theaters simultaneously, Universal is breaking the business model and dealings between our two companies. It assumes that we will meekly accept a reshaped view of how studios and exhibitors should interact, with zero concern on Universal’s part as to how its actions affect us. It also presumes that Universal in fact can have its cake and eat it too, that Universal film product can be released to the home and theaters at the same time, without modification to the current economic arrangements between us.”
Cineworld, the parent company of the Regal cinema chain issued a similar though less dire warning, noting that Regal would no longer present films that “fail to respect” the long-established theatrical window.
Universal later appeared to try to mend fences, and in a press statement said that it “absolutely believes in the theatrical experience and have made no statement to the contrary.”
However, other major studios are bypassing traditional theater-only releases, including Warner Bros. who will release their upcoming animated movie “Scoob” directly to video on demand while Disney has moved “Artemis Fowl” from a theatrical release to an exclusive on its own in-house VOD platform Disney+.
The actions by the two cinema chains are the latest moves in a long-simmering debate over the traditional theatrical release window which has increasingly come under strain in the era of streaming.
Traditionally, theaters had a window of at least 90 days where films would be exclusively available before making their way to VHS, DVD, Blu-Ray, and ultimately, video on demand services.
Theater chains have increasingly been facing declining attendance fueled by the rise of on-demand video services such as Netflix, inexpensive high definition home theater systems and increased competition for entertainment dollars from other facets of the entertainment industry.
Netflix in particular has presented challenges to the status quo, releasing high profile movies such as Martin Scorsese’s “The Irishman” and the Coen Brothers film “The Ballad of Buster Scruggs” directly to consumers on the streaming service, with very limited simultaneous theatrical releases in order to qualify the films for inclusion in the Academy Awards.