COVID Killed Theaters’ 90-Day Exclusivity on New Movies

“There’s a real chance that we could see studios handle a mid-budget comedy or a $20 million drama much differently than they handle a ‘Jurassic World’ or a ‘Top Gun’ film,” Comscore analyst Paul Dergarabedian advised TheWrap. “There’s a lot of incentive to do that now as studios still aren’t entirely sure how fast theaters will return to normal business this year, and who knows what could happen in 2022 and beyond.”

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Looking again, Universal fired the primary shot simply days after theaters shut down throughout the U.S. On March 17, 2020, the studio introduced that “Trolls World Tour,” a movie initially set for theatrical launch, can be made obtainable as a premium video on-demand (PVOD) title. The response from film theaters was swift, headlined by AMC Theatres threatening to blacklist Universal movies from its screens.

But on July 28, the theater chain introduced a landmark cope with Universal, giving the studio the choice to launch a movie on PVOD as early as 17 days after theatrical launch in alternate for an undisclosed portion of the PVOD gross sales. Four months later, Cinemark signed on to the deal, negotiating a brand new theater-friendly clause that might assure 31 days of theatrical exclusivity for any Universal blockbuster that earned over $50 million in its opening weekend. The message was clear: theaters acknowledged that they now not had the leverage to maintain the 90-day window intact, and the bigger chains have been now making efforts to form no matter comes instead of their favor.

To date, Universal is the one studio that has made a public cope with theater chains on a shortened theatrical window. Warner Bros.’ HBO Max transfer was met with robust opposition from theater chains, however relations have calmed at the least for the second as Warner Bros. has provided theaters a larger-than-usual share of ticket gross sales on the movies getting a same-day streaming launch.

Even if theaters needed to play hardball with Warner — as AMC threatened to do with Universal over “Trolls World Tour” — the chains are at the moment centered on reopening as rapidly as attainable and want as many main studio movies as they will to get folks again in seats.

But whereas the monetary disaster of the previous yr has price theaters a whole lot of leverage — AMC, the nation’s largest chain, on Wednesday reported $4.6 billion in losses for 2020 — there are nonetheless some traces they received’t enable studios to cross. Last weekend, Cinemark, together with a couple of regional chains like Harkins Theaters, refused to display screen Disney’s “Raya and the Last Dragon” after the studio refused to match Warner Bros. phrases for permitting theaters to get an even bigger minimize of ticket gross sales. (While Disney continues to be releasing some movies solely in theaters, “Raya” debuted day-and-date as a premium PVOD title for Disney+ subscribers.)

As a outcome, a whole bunch of theaters went with out the animated movie, with rival distributors estimating that the display screen loss price the movie between $1.5 million and $2 million in potential ticket gross sales. The movie grossed $8.Four million in theaters the place it did play.

It’s an instance of the difficult dance between studios and film theaters because the business tries to get again to regular this summer time. “We put out a very clear statement that we were not willing to let WB advantage its streaming service at AMC’s expense…you may have noticed that we are playing WB’s films now,” AMC CEO Adam Aron stated in an earnings name on Wednesday. “Now, we by no means talk about our movie phrases publicly, however it is best to correctly assume if we’re enjoying Warner motion pictures, we got here to an settlement with Warner that any adjustments of their technique are doing methods the place AMC shareholders profit slightly than…