When Universal and AMC in July unveiled a new deal enabling the studio to release movies on demand within weeks of their theatrical debut, rival theater owners publicly and privately decried the change. They feared the agreement would be detrimental to their businesses.
In the pandemic era, it may ironically end up being a saving grace.
Exhibitors initially were concerned that audiences wouldn’t pay to see a movie in theaters if they could wait just 17 days to watch it at home. Traditionally, films play on the big screen for 75 to 90 days before landing on digital rental platforms. Theater operators were particularly cantankerous because the pandemic had already been ruinous to the film industry, and they worried that shattering the theatrical window — the term for the amount of time a movie exclusively plays in theaters — could push struggling multiplexes over the edge.
That was before plans for a grand moviegoing revival failed to take off. The hope, after prolonged cinema closures, was that the debut of Christopher Nolan’s “Tenet” in September would give studios the confidence to continue ushering out potential blockbusters. Instead, it helped spur a mass exodus on the release calendar, leaving movie theater operators desperate for something, anything fresh to offer customers. As a result of the carnage, Robert De Niro’s poorly reviewed “War With Grandpa” and rereleases of the 1993 Halloween classic “Hocus Pocus” and “Star Wars” have been atop box office charts in recent weeks.
“New product helps bring in repeat business. Smaller titles are going to put up small numbers, but they get people thinking about coming back to theaters,” said Eric Handler, an exhibition industry analyst with MKM Partners. “At this point, theater operators are trying to break even. They’re willing to take just about any movie that can help bring in an audience.”
When it comes to major studios, Universal is one of the only to have any movies left for 2020 with (an arguably weaker than usual) lineup that includes animated family film “The Croods: A New Age” on Nov. 25, slasher comedy “Freaky” on Nov. 13 and the Tom Hanks-led Western “News of the World” on Dec. 25. “Promising Young Woman,” from Universal-owned specialty label Focus Features, is also slated for Christmas Day.
Warner Bros.’ comic book sequel “Wonder Woman 1984” is still scheduled for Dec. 25, but unless movie theaters in major U.S. cities like New York and Los Angeles reopen, it’s highly unlikely that will hold. Before the year ends, Ryan Reynolds’ action comedy “Free Guy,” Kenneth Branagh’s whodunit “Death on the Nile” (both from Disney) and Paramount’s “Coming 2 America” with Eddie Murphy are slated for December. Meanwhile, independent studios are continuing to debut smaller titles like Liam Neeson’s “Honest Thief,” romance drama “2 Hearts” and “After We Collided,” a sequel to the 2019 YA film “After.”
Though release dates have been rapidly shifting, often on a weekly basis, the crop of titles from Universal are the rare few expected to stick. That’s because the deal between AMC provides something of a safety net until studios feel comfortable unveiling major tentpoles. If audiences don’t turn out in large numbers, Universal can put movies on home entertainment after three weekends without having to sweat additional marketing costs. Plus, the movies slated to premiere have smaller price tags, making them less of a risk for the studio. (There’s a reason why “Croods 2” and “Freaky” are still on track to open, while mega-budgeted franchise fare like “Fast and Furious 9” and “Jurassic World: Dominion” moved to 2021).
Granted, nobody expects “The Croods” sequel, “Freaky” or “News of the World” to reach blockbuster status, but exhibitors aren’t picky these days when it comes to filling screens. AMC might be the only company that gets a cut of Universal’s digital profits, but rival cinemas don’t have the leverage they once did to refuse new product.
Universal is still considering how long to wait before putting upcoming titles on-demand, though sources say “Freaky” is eyeing 21 days of big-screen exclusivity and “The Croods” sequel is planning 24 days, putting the animated adventure on home entertainment ahead of the Christmas Day debut of Pixar’s “Soul” on Disney Plus. Per the agreement with AMC, Universal movies have to be priced at $20 or higher until the film reaches its traditional home entertainment window.
As it stands, Universal is the only studio and AMC is the lone theater chain to engage in a PVOD agreement, though others have begun exploring the option. Robert Fishman, an analyst at research film MoffettNathanson, recommends theater owners explore similar agreements “as a lifeline to get more product on movie screens.”
“Studios are in a very difficult position themselves of figuring out when the right time will be to release their new movies,” Fishman said in a report last week. “Having additional flexibility to move their product to other windows could help to reduce some of the extra risk involved to commit to a specific release date.”
The future could be here faster than theaters want to acknowledge. Just yesterday, Disney reorganized its corporate structure with an emphasize on providing more content for its streaming services. And Warner Bros. has been encouraged to make more movies for HBO Max, a signal that strengthening digital video output is critically important.
Some analysts are skeptical that the upcoming movies set to populate movie theater marquees will be enough to keep smaller cinemas in business. Already, exhibitors have struggled to recover after the industry attempted a large-scale reopening in early September. Regal, one of the biggest theater chains in the country, closed down over 500 U.S. venues after only a few months back open. Alamo Drafthouse, a specialty circuit, shuttered some venues in Dallas and Omaha. Ticket sales hadn’t been strong enough to justify keeping the lights on at those venues, particularly without many new theatrical releases on the horizon. According to Comscore, only 48% of U.S. cinemas are currently open. During the time surrounding “Tenet’s” release, nearly 70% of theaters were open.
“The lifeblood of theaters is blockbuster films, and there aren’t any,” said Jeff Bock, a box office analyst with Exhibitor Relations. “Theaters are losing money because they can’t show top-tier blockbusters.”
Source: Read Full Article