News: AMC and Universal in War of Words Over Theatrical and Home Releases

Earlier this week, NBC Universal CEO Jeff Shell made statements in the Wall Street Journal regarding the success of Trolls World Tour's direct to home theater rental experiment.  The statements said that the movie earned $95 million and that NBC Universal: “As soon as theaters reopen, we expect to release movies on both formats,” which alludes to the idea that it would be releasing new movies in home streaming format day and date with the theatrical release.

In response to this, Adam Aron, head of AMC, sent a letter to Universal Studios Chairman Donna Langley with some firm language.  In the letter, Aron recognizes that Trolls World Tour's release was a situational occurrence due to the worldwide pandemic and closing of theaters.  However, he drew a line in the sand with respect to future direct to home theatrical releases once theaters reopen.  He stated that: “Going forward, AMC will not license any Universal movies in any of our 1,000 theatres globally on these terms.” That includes AMC sites in the U.S., Europe and the Middle East.  Aron's statements were directed at Universal, but he made sure to note that it would be extended to any movie maker that abandons the theatrical first model.

With upcoming direct to home releases like Disney's Artemis Fowl and Warner Bros. Scoob! testing the direct to home waters, there might be more and more of these types of statements released.  Aron's comments are not surprising, given that it will already be difficult to get consumers back into theaters once life returns to normal.  AMC will need new movies to drive consumers back to cinema.  With social distancing measure likely to reduce the number of seats in theaters and add costs for cleaning, AMC is looking to protect its business model.  Only time will tell what happens in this feud, and if other movie studios join in, but it will be interesting to watch!