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AMC Theatres said it will not license any Universal Pictures movies after a studio executive shared plans to simultaneously release titles in theaters and premium video on demand (PVOD) following the success of “Trolls World Tour.”
The studio’s animated “Trolls” sequel was released directly to digital rental platforms this month after the coronavirus pandemic shuttered movie theaters around the world. The release ended up being a bright spot for the studio as the virus has forced people to stay home and battered the economy. The movie has brought in close to $100 million in rentals, The Wall Street Journal reported.
Jeff Shell, CEO of Universal’s parent, NBCUniversal, told the Journal that it’s an experiment in premium video on demand he’d been wanting to try for some time.
“The results for the ‘Trolls World Tour’ have exceeded our expectations and demonstrated the viability of PVOD,” he told the Journal. “As soon as theaters reopen, we expect to release movies on both formats.”
That’s “categorically unacceptable to AMC Entertainment,” CEO Adam Aron wrote in a letter to Universal Tuesday.
|AMC||AMC ENTERTAINMENT HOLDINGS INC||4.45||-0.04||-0.89%|
AMC, which is the largest theater chain in the world, said it wouldn’t play any Universal movies in the U.S., Europe or the Middle East as a result of Universal’s change in policy. Any other moviemakers that try a similar plan will also find its films barred from AMC theaters, according to Aron.
“AMC believes that with this proposed action to go to the home and theatres simultaneously, Universal is breaking the business model and dealings between our two companies,” he wrote. “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.”
A Universal spokesperson told FOX Business the studio’s goal in releasing “Trolls” on demand was “to deliver entertainment to people who are sheltering at home, while movie theatres and other forms of outside entertainment are unavailable.” Not releasing the movie would have also negatively impacted Universal employees and partners.
“Based on the enthusiastic response to the film, we believe we made the right move,” the spokesperson said.
Universal still expects to release future movies directly to theaters but also PVOD “when that distribution outlet makes sense,” the spokesperson said.