Why Universal Believes the AMC Deal Will Help Movies Return to Theaters ‘A Lot More Quickly’

“We currently are stuck in a kind of chicken-and-the-egg situation,” NBCUniversal CEO Jeff Shell says

Last Updated: July 30, 2020 @ 7:53 AM

NBCUniversal CEO Jeff Shell believes his Universal Pictures-AMC Entertainment theatrical-window deal will help movies return to theaters “a lot more quickly” than they otherwise might have in the current landscape.

“We currently are stuck in a kind of chicken-and-the-egg situation in the theatrical business,” Shell said Thursday on Comcast’s second-quarter earnings call. “Movie studios like ours don’t want to release movies into theaters when there are only a smattering of theaters open. We need a pretty robust amount of theaters open to justify our spend.”

“But the flip side is, exhibitors can’t open a bunch of theaters if they don’t have any new movies to put in them. Old library movies are not going to drive people to movie theaters,” he continued. “So we think this model will actually allow movies to come back to theaters — when it’s safe — a lot more quickly than they would have in the current environment.”

AMC and Universal announced their theatrical-window deal on Tuesday, which will allow movie theaters to have Universal feature films exclusively for 17 days. After that window closes, Universal will have the option to leave a movie in theaters or pull it for PVOD (Paid Video On Demand).

Shell says his studio will likely exercise both options, dependent upon the movie and its performance in theaters.

“I fully anticipate some movies will stay in theaters exclusively a lot longer than 17 days if we’re having a good theatrical run,” Shell said on Thursday.

In other words, expect blockbusters to stick around on the big screen.

Shell cited Judd Apatow and Pete Davidson’s “The King of Staten Island,” however, is a “perfect example” for one that Universal would have exercised its PVOD option. after 17 days in theaters.

“It would do well theatrically, but for most people, watching it at home would be another option,” Shell said.

For now, the pact is for U.S. only, but AMC, the world’s largest theatre chain, is considering a similar plan for international territories. Shell would also like to strike similar deals with other exhibitors, but not everyone is thrilled with the idea.

“We’ve always believed that there’s a…growing segment of the population out there that just doesn’t go to movie theaters,” Shell said Thursday. “This structure with AMC allows us to take advantage of people who do go to movie theaters — 17 day of exclusivity, at minimum, for theaters — but very soon after, in the same marketing window, we can tap into that very large audience that doesn’t go to movie theaters and instead is just going to SVOD to watch movies.”

That one-time marketing spend is a key aspect to Universal’s plan.

Read all about Comcast’s Q2 earnings here.

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