AMC Theatres CEO: On-Demand Deal With Universal Has Been Offered to Other Studios

CEO Adam Aron says that he expects the 17-Day PVOD window for Universal films will become an industry standard

Last Updated: August 6, 2020 @ 4:00 PM

During AMC Theaters’ quarterly earnings call on Thursday, CEO Adam Aron said that the deal it recently negotiated with Universal to allow the studio to release its films earlier than ever for premium on-demand has been offered to the rest of Hollywood’s major studios.

Aron said that he expects the new deal to become an industry standard, saying that the national theater chain “just saved exhibition” by making this potentially industry-changing agreement with Universal.

As part of the agreement, Universal now has the option to release its films as premium video on-demand titles after they have been in theaters for 17 days. The deal will also make those films available on AMC’s recently launched on-demand service and includes PVOD profit sharing between the two companies, though details remain confidential. Aron said on Thursday that any films that Universal chooses to move to PVOD after that 17-day window will still be available in theaters, and that Universal must wait until their films have been in theaters for 10 days before making any announcement about a PVOD release.

“We cannot just live in the past and fear change,” Aron said. “One has to stare change in the face and reshape it for one’s own benefit.”

Aron also noted that the deal has been made in response to a more than decade-long trend in the box office as the financial performance of most films in theaters has become increasingly front-loaded. Aron said that “as much as 80% of a film’s theatrical viewing” comes from the first 17 days of its theatrical run.

“Another studio executive told me, ‘Adam, you’re gonna get heat, but with this action, AMC may have just saved exhibition. We were gonna greenlight fewer movies. Now we will greenlight more,'” he said.

Aron’s comments come as AMC weathers what it calls the “most challenging quarter” in its history, suffering a $561 million Q2 loss. The chain is planning to reopen as many theaters as allowed by state health officials in advance of the release of “Tenet” on Labor Day weekend.

“A once in a century event has transformed 2020 into a brutal year, and movie theatre businesses have been hit particularly hard. Even so, as we look ahead, we remain optimistic about AMC’s long term future,” Aron said. “Theatrical exhibition has always been resilient, and we are confident that at AMC we are taking the right steps to emerge from this crisis and to thrive once again as the leader in our industry.”

Trey Williams contributed to this report.