AMC's Ban On Movies From Universal Is Very, Very Silly

Movie theaters are closed around the world because of the COVID-19 pandemic. Social distancing and shelter in place orders are in effect in many places in the United States. Even if Americans wanted to go to movie theaters, they can't. As a result, many movie studios are delaying release dates or just going right to on-demand rentals. Because of this, Universal Pictures realized that VOD is a viable way to make money on new movies, and in turn, AMC Theaters--the largest movie theater chain in the country--is pissed.

To give a quick rundown of how all this happened, Universal couldn't release Trolls: World Tour in theaters, so it went straight to on-demand rental. After three weeks, the movie sequel made more revenue for the studio than the original did after five months in theaters, mainly because of the higher percentage the studio takes from digital rentals compared to box office sales. This led Universal CEO Jeff Shell to say that in the future, the studio could release movies both in theaters and as VOD rentals.

AMC boss Adam Aron released a statement saying that the theater chain will no longer screen Universal films, and Universal responded restating that they're still releasing movies in theaters--when they reopen--and the choice to turn to VOD was to give people staying at home something to watch. Obviously, continuing to make money when movie theaters are closed was probably another key factor as well.

This is just the longtime tension between Hollywood studios and movie theaters chains over VOD and streaming coming to a head. We're beginning to see a trend of high-profile films, like Martin Scorsese's The Irishman, launching on streaming services like Netflix over debuting in the theater. As revealed in a recent investor call, Netflix has 182 million subscribers globally--69 million of which are in the United States--as of March 31, 2020. Disney+ just hit 50 million subscribers, globally. Even the Oscars have changed their stance on streaming films--at least for this year--as they will allow streamed movies for Best Picture for the 2021 Academy Awards.

Meanwhile, the US box office saw a drop in $600 million during the first quarter of 2020 compared to Q1 of 2019. While many states began sheltering in place towards the end of Q1, the pandemic itself is making people want to stay home. So of course, movie theater chains are terrified of a future where all movies go straight to on-demand instead of to their theaters.

However, banning a studio's films isn't going to help. This is a very silly pissing contest. When Fast & the Furious 9---F9: The Fast Saga--hits its release date next year, it will still be in theaters, and you can bet it will also be in AMC theaters because that franchise brings in a boatload of cash. For AMC to pretend otherwise is laughable.

By saying "no thanks" to Universal movies, AMC is also saying "no" to these upcoming movies in 2020 and 2021:

Universal 2020 films:

• Candyman (September 25)
• Halloween Kills (October 16)
• The Croods 2 (December 23)

Universal 2021 films:

• The Boss Baby 2 (March 26)
• F9 (April 2)
• Jurassic World: Dominion (June 11)
• Minions: The Rise of Gru (July 2)
• Sing 2 (December 22)

And this is just a highlight reel of upcoming Universal movies that could see theatrical releases once this global crisis is over. There are still other films arriving in 2020 and 2021, including titles from Blumhouse, Amblin, and the Purge series. There is a big mix of action, horror, comedy, and a lot of high-profile kid's movies AMC will be missing out on if they continue with the hissy fit.

Universal has responded to Aron stating, "We absolutely believe in the theatrical experience," and "We expect to release future films directly to theaters, as well as on PVOD when that distribution outlet makes sense. We look forward to having additional private conversations with our exhibition partners but are disappointed by this seemingly coordinated attempt from AMC and NATO [National Association of Theater Owners] to confuse our position and our actions."

Aron's disappointment is warranted. Releasing movies both digitally and in theaters certainly causes a loss to theaters' revenues, but let's take a look at the current situation. If movie theaters were to open tomorrow, people will not be flocking there, no matter what is released. The COVID-19 pandemic has put us all in the routine of staying socially distant from others, to lessen the spread of the virus. We're all trained to be in this mindset. There will more than likely be uneasiness about going back to the movies, and that will need time to wear off.

Maybe if AMC was smarter about the current climate, they'd be trying to work with movie studios instead of drawing a line in the sand. AMC already has a streaming service, which launched back in 2019. Instead of banning Universal movies from theaters, why weren't they working with studios to release the films on the AMC platform? Sure, that may not help individual theaters or its employees, but it is a step in the right direction--because right now, Aron's comments will alienate other customers as well as other studios.

Movie theaters and studios are hurting, without a doubt, but this shouldn't be the time to go at each other's throats just because one is adjusting better than the other. In order to overcome this situation, people and companies should be working together to weather the storm.