Universal, AMC announce agreement to shorten theatrical window

AMC Theatres and Universal have reached a new multi-year agreement that effectively shortens the theatrical window in which movie-goers can see the latest releases at the theater before they’re made available on demand.

The agreement now ensures that Universal Pictures and Focus Features films will play exclusively in theaters for at least three weekends (17 days), and after that, the studios will have the option to make the titles available across premium video on demand platforms, meaning that rentals will likely be around the $20 range, according to Variety. Viewers looking for rental prices around $3-$6 will have to wait until three months after a film has debuted in theaters.

This agreement comes after AMC banned Universal films from being played in its theaters when the studio digitally released “Trolls World Tour” back in April 2020 due to COVID-19 closing most movie theaters in the U.S.

“The theatrical experience continues to be the cornerstone of our business,” said Donna Langley, chairman of Universal Films Entertainment Group. “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.”

AMC CEO Adam Aron commented on the new agreement and reflected on the state of the world that brought it about, saying,

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.

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. AMC will also share in these new revenue streams that will come to the movie ecosystem from premium video on demand.

So, in total, Universal and AMC each believe this will expand the market and benefit us all. Focusing on the long-term health of our industry, we would note that just as restaurants have thrived even though every home has a kitchen, AMC is highly confident that moviegoers will come to our theatres in huge numbers in a post-pandemic world.

As people enjoy getting out of their homes, we believe the mystical escape and magical communal experience offered at our theatres will always be a compelling draw, including as it does our big screens, big sound and big seats not to mention the alluring aroma of our perfectly prepared popcorn. Universal and AMC have partnered in bringing stellar movies to moviegoers for a full century. With this historic industry changing agreement, together we will continue to do so and in a way that should drive success for us both.

Adam Aron, CEO of AMC

This new deal is monumental for the film industry, as the standard theatrical window has fallen anywhere between 70-90 days in recent years — clearly illustrating just how COVID-19 has affected the traditional moviegoing experience.

For now, this agreement is just between Universal and AMC, though it is possible that we could see future deals from other big players to come.