UNIVERSAL CITY (CNS) - Universal Pictures and AMC Theatres announced a historic deal today that will result in home audiences getting much earlier access to major film releases.
Under the agreement, Universal's movies will be available to video-on-demand platforms after screening for 17 days in AMC theaters in the United States. The theater chain will share in the revenue generated by the on-demand business.
“The theatrical experience continues to be the cornerstone of our business. The partnership we've forged with AMC is driven by our collective desire to ensure a thriving future for the film distribution ecosystem and to meet consumer demand with flexibility and optionality,'' said Donna Langley, chair of Universal Filmed Entertainment Group.
Executives of both Universal and AMC -- the nation's largest theater chain -- said the deal represents a new model for the industry, one that will provide greater flexibity.
“AMC enthusiastically embraces this new industry model both because we are participating in the entirety of the economics of the new structure, and because premium video on demand creates the added potential for increased movie studio profitability, which should in turn lead to the green-lighting of more theatrical movies,'' AMC CEO Adam Aron said.
“This multi-year agreement preserves exclusivity for theatrical viewing for at least the first three weekends of a film's release, during which time a considerable majority of a movie's theatrical box office revenue typically is generated. ... So, in total, Universal and AMC each believe this will expand the market and benefit us all.''
Previously, the major studios have showed new releases exclusively in theaters for about three months before making them available for home viewing, but the Universal-AMC deal could have wide-ranging effects on that model.
The agreement also applies to releases from Universal's Focus Features.
The full terms of the deal are not being disclosed. Although Tuesday's announcement only applies to U.S. distribution, the two companies said they will begin discussions surrounding international distribution agreements in the coming weeks.
The agreement represents a 180-degree reversal of the companies' earlier positions, in which Aron threatened to boycott all Universal films after the studio said it would make “Trolls World Tour'' available in any cinemas that were open and on VOD.
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