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AMC and Universal agree to shorten the theatrical window before heading online

Under a new agreement between AMC Theaters, the world’s largest theater chain, and Universal Pictures, one of Hollywood’s leading studios, movies will now play in theatres for significantly less time before moving to home video, completely changing how Hollywood has done business for decades.

For Universal’s movies that are carried in AMC chains, the theatrical window will shorten to 17 days from the current 75. So instead of waiting 2½ months to watch a new movie at home, viewers will be able to see the studio’s titles just 2½ weeks after they premiere in theaters.

This settles a public beef between the two companies that led to AMC’s CEO Adam Aron vowing that his company would ban Universal’s movies after the studio said it would consider simultaneously releasing films in theaters and on digital rental services such as “Trolls World Tour”, which hit PVOD platforms on the same day it was scheduled to open in theaters that were largely closed since March due to the ongoing pandemic.

The Take

This deal will likely put pressure on the rivals of both companies to follow the same path. Jeff Bock,  Exhibitor Relations senior media analyst said, “Universal and AMC’s deal basically forces the hand of the other studios and exhibitors to play a similar game, which could result in the most dynamic change the movie industry has seen since its inception.”

Theaters have historically considered it essential for their businesses to be able to exclusively play movies before consumers can watch them other ways. Studios have previously attempted to push for shortening the exclusivity period as they’d be able to avoid executing two costly marketing campaigns, months apart, for the same movie, as well as expand to audiences who are unable or unwilling to leave home.

Universal doesn’t have any major tentpole releases scheduled until 2021, so the impact of this historic deal may not be immediately felt.

Tentpole Universal movies such as the “Fast and Furious” and “Jurassic World” franchises drive huge global box office profits and it’s difficult to see them taking these films straight to PVOD after a couple of weeks, given the lack of international PVOD opportunities as well as the increased piracy risk that occurs once any film is available to stream.

Although this is a watershed moment for the home entertainment industry, you can expect Universal to evaluate movie releases on a case-by-case basis to determine what movies should move fast to digital and which ones should have an extended theatrical run. After all, this is exactly what NBCUniversal CEO Jeff Shell told investors in April his strategy was going forward.

Related: Six Movie Business Questions After Universal and AMC’s Historic Deal. Variety

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