Universal Pictures released a statement on Tuesday evening responding to AMC Theatres’ decision to no longer screen the studio’s films after NBCUniversal CEO Jeff Shell said that when theaters reopen after the coronavirus pandemic, it will release films in both theatrical and premium video-on-demand formats.
“Our goal in releasing ‘Trolls: World Tour’ on PVOD was to deliver entertainment to people who are sheltering at home, while movie theatres and other forms of outside entertainment are unavailable. Based on the enthusiastic response to the film, we believe we made the right move,” a rep for Universal said.
“In fact, given the choice of not releasing ‘Trolls: World Tour,’ which would not only have prevented consumers from experiencing the movie but also negatively impacted our partners and employees, the decision was clear,” the statement continued. “Our desire has always been to efficiently deliver entertainment to as wide an audience as possible. We absolutely believe in the theatrical experience and have made no statement to the contrary. As we stated earlier, going forward, we expect to release future films directly to theatres, as well as on PVOD when that distribution outlet makes sense. We look forward to having additional private conversations with our exhibition partners but are disappointed by this seemingly coordinated attempt from AMC and NATO to confuse our position and our actions.”
In a response Tuesday night, NATO said: “Earlier today NATO issued a statement regarding Universal Studios’ public comments in the Wall Street Journal regarding that studios’ evaluation of the results of releasing the movie Trolls World Tour directly to the home without a theatrical release, and specifically that Universal would release future movies both theatrically and to the home.”
“Also today, according to various public press reports, AMC released a letter that company sent to Universal stating AMC’s individual company reaction to Universal’s public statement earlier in the day in the Wall Street Journal. NATO and AMC did not coordinate those statements in any way. Indeed, AMC had no comment on NATO’s draft statement when sent to NATO’s Board of Directors, nor did AMC participate in the Board deliberations regarding that statement. Regarding AMC’s reported letter to Universal, NATO had no involvement with nor knowledge of that letter before reading about it in the press.”
“Without any knowledge of the facts, or the common courtesy to inquire about those facts, Universal nonetheless made the reckless charge this evening that the company is “disappointed by this seemingly coordinated attempt from AMC and NATO to confuse our position and our actions.” Unfortunately Universal has a destructive tendency to both announce decisions affecting their exhibitor partners without actually consulting with those partners, and now of making unfounded accusations without consulting with their partners.”
AMC made the decision to essentially blacklist Universal after comments by Shell in a Wall Street Journal story published Tuesday morning that reported that “Trolls World Tour” made $95 million in digital rentals in the 19 days since its release. The film was initially planned for theatrical release but was moved to day-and-date with a digital release in March as thousands of theaters were forced to shut down during the coronavirus pandemic.
“The results for ‘Trolls World Tour’ have exceeded our expectations and demonstrated the viability of PVOD,” Shell said. “As soon as theaters reopen, we expect to release movies on both formats.”
This quote was directly cited by AMC CEO Adam Aron in a letter to Universal as the reason behind their decision to terminate their business partnership until and unless the studio enters new negotiations with the theater chain.
“AMC believes that with this proposed action to go to the home and theatres simultaneously, Universal is breaking the business model and dealings between our two companies,” Aron wrote. “It assumes that we will meekly accept a reshaped view of how studios and exhibitors should interact, with zero concern on Universal’s part as to how its actions affect us. It also presumes that Universal in fact can have its cake and eat it too, that Universal film product can be released to the home and theatres at the same time, without modification to the current economic arrangements between us.”
The comments also prompted a response from the National Association of Theater Owners, who insisted that the unique circumstances brought about by the coronavirus pandemic should not be used as justification to reduce the theatrical window.
“Universal does not have reason to use unusual circumstances in an unprecedented environment as a springboard to bypass true theatrical releases,” said NATO president and CEO John Fithian. “Theaters provide a beloved immersive, shared experience that cannot be replicated – an experience that many of the VOD viewers of this film would have participated in had the world not been sequestered at home, desperate for something new to watch with their families. We are confident that when theaters reopen, studios will continue to benefit from the global theatrical box office, followed by traditional home release.”