AMC and Universal agree to let movies go from theaters to digital rentals much sooner

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AMC Theaters and Universal have reached a new agreement that dramatically shortens the theatrical exclusivity window — the amount of time that films have to play in theaters before they’re allowed to be sold or rented in other places, like iTunes, Amazon, or AMC’s own On Demand service — down to just 17 days (ensuring that the films will hit at least three weekends in theaters).

The new deal marks a radical shift from the standard theatrical release window, which has typically been between 70 and 90 days in recent years, and could vastly alter the landscape of both theatrical and digital film.

Universal and AMC had previously been feuding over release windows after Universal — spurred on by the direct-to-digital success of films like Trolls: World Tour, which had skipped theaters due to the ongoing COVID-19 pandemic — planned to release future films on both digital and theatrical platforms. AMC Theaters CEO Adam Aron responded by calling Universal’s plan “unacceptable,” and threatened to ban all future Universal releases from AMC Theaters (although, given that theaters have yet to reopen, AMC never actually had to make good on that threat).

It’s not a completely straightforward shortening of the theatrical window. According to Variety, the deal only allows Universal to offer “premium on-demand” rentals in the roughly $20 range — regular priced $3 to $6 rentals (which could vastly undercut theater tickets) will still have to wait 90 days after the theatrical debut. That term would seem to also undercut the possibility of films jumping earlier to streaming services, like NBCUniversal’s new Peacock service. Additionally, Aron notes that AMC will “share in these new revenue streams” and get a cut of those early rentals, although the two companies haven’t revealed any details.

“The theatrical experience continues to be the cornerstone of our business,” commented Donna Langley, chairman of Universal Filmed Entertainment Group, in a statement to CNBC. “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.”

Universal has the opportunity to offer early releases for any of its films, although the company isn’t expected to dramatically shorten the theatrical run of big blockbusters like the upcoming Fast & Furious or Jurassic Park sequels (which historically have been huge, $1 billion blockbusters). But it does give Universal the flexibility to release its smaller films earlier, and it gives customers the option to choose where they’d like to see those films (something that will likely be important as gradual reopening of theaters begins).

Right now, the new shortened window is just between Universal films and AMC, although by setting the precedent, it’s hard to imagine that other major studios like Disney, Warner Bros., Sony, and Paramount won’t try to negotiate similar terms in the future, too.

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