AMC Theaters had a harsh message for Universal Pictures on Tuesday — they’re breaking up. AMC has declared that they will no longer show any movies from Universal in any of their theaters. This announcement comes after NBCUniversal CEO Jeff Shell made some choice comments about the on-demand success of Trolls World Tour.
The Dreamworks movie, which is distributed by Universal, has had unprecedented success with on-demand streaming. Trolls World Tour was scheduled to have a wide release this year starting April 10. However, after the coronavirus pandemic resulted in the closing of movie theaters, Universal rushed the film to on-demand. According to CNBC, the movie earned over $100 million in rental fees in only three weeks, while the first Trolls movie made $153.7 million in five months.
In an interview with The Wall Street Journal, Shell confirmed Universal’s incredible success with PVOD (or Premium video on demand) services for the film.
“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.”
Shell’s statements did not sit well with AMC, the largest chain of movie theaters in the world. As reported by Entertainment Weekly, Adam Aron, the CEO of AMC, addressed a strongly worded letter to the CEO of Universal Filmed Entertainment Group, Donna Langley.
“It is disappointing to us, but Jeff’s comments as to Universal’s unilateral actions and intentions have left us with no choice. 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,” Aron wrote in part.
As a rule, movie theaters usually require at least a 90-day on-screen run before allowing a film to be released to a digital platform. According to The Hollywood Reporter, theater owners understand why distributors would see the need to rush some films to digital during a pandemic. Yet, once the health crisis is over, proposing to release films to movie theaters and digital streaming simultaneously would drastically alter the existing business models between theaters and distributors.
The National Association of Theatre Owners also issued their own statement on Shell’s comments.
“This performance is indicative of hundreds of millions of people isolated in their homes seeking entertainment, not a shift in consumer movie viewing preferences.”
Aron’s letter concludes by saying that AMC is willing to sit down with Universal executives and discuss new strategies. But until then, the two will not be doing business.