AMC Theaters has banned films made by Universal Pictures from its facilities following a dispute over “Trolls World Tour”.
According to AMC, it will no longer screen Universal Pictures films at its theaters after the two companies argued about the merits of releasing movies in theaters before making them available online after the success of the animated film “Trolls World Tour”.
In a letter to Universal chairman Donna Langley on Tuesday, AMC chief executive officer (CEO) Adam Aron pointed out that the decision was triggered by what NBCUniversal CEO Jeff Shell said to the Wall Street Journal about the blockbuster digital success of "Trolls World Tour".
Trolls World Tour spat
The animated children's film was initially scheduled for theatrical release this month but the coronavirus pandemic prompted Universal Pictures to bypass theaters in favor of launching the movie online via on-demand service.
This decision proved to be beneficial as the studio earned almost $100 million in rental fees since the digital release of "Trolls World Tour" on April 10. Shell told the Wall Street Journal that the film "exceeded our expectations and demonstrated the viability" of on-demand video.
However, what the NBCUniversal CEO said next really irked AMC, Europe's biggest cinema operator. Shell continued: "As soon as theaters reopen, we expect to release movies on both formats."
Aron mentioned in the letter, which was also made public by AMC, that the firm accepted the decision of Universal to release the Trolls movie digitally as an "exception" in "unprecedented times."
However, the AMC CEO argued that Shell’s comments about releasing movies on "both formats" as theaters reopen would be a "radical change" to the business model and "represents nothing but downside for us and is categorically unacceptable" to AMC.
He added: "Effectively immediately AMC will no longer play any Universal movies in any of our theaters in the United States, Europe or the Middle East. He claimed that the policy is "not some hollow or ill-considered threat."
Emergence of on-demand and video streaming amidst the pandemic
The coronavirus pandemic boosted streaming and video on-demand services dramatically, prompting major film studios, including Universal, to shift some of their movies to on-demand platforms, such as The Invisible Man" and "The Hunt".
They have also decided to delay the theatrical release of potential blockbusters, including the upcoming Fast & Furious film "F9", as governments and business try to prevent large crowds from gathering and potentially spreading the disease.
This trend created conflict between film studios and theater operators over what is known as the "theatrical window," the length of time that a film plays in theaters before it is made available on other platforms.
Notable Hollywood personalities, including director Steven Spielberg, have rallied to maintain the distinction between streaming and theatrical releases.
Universal’s response
The film studio disputed Aron’s take on the issue and assured that it "absolutely" believes in the theatrical experience and "have made no statement to the contrary."
A Universal spokesperson said: "Our goal in releasing 'Trolls: World Tour' on demand was to deliver entertainment to people who are sheltering at home, while movie theaters and other forms of outside entertainment are unavailable."
"Based on the enthusiastic response to the film, we believe we made the right move," the spokesperson added.
However, the company said that in the future, it expects to release films directly to theaters as well as on-demand "when that distribution outlet makes sense."
