The Backlash To The AMC/Universal Deal Has Begun (NEWS/ANALYSIS)

It was a landmark deal between a major Hollywood studio and North America’s biggest theater chain. It was supposed to revolutionize the industry.

Not so fast.

When AMC Theatres and Universal struck a deal allowing the studio to put its movies on Premium Video on Demand (PVOD) just 17 days after a film’s theatrical debut, it was hailed as a history-maker. It would not only redefine the movie business but, essentially, institutionalize the inevitable trend of films gravitating from movie screens to home streams.

After the pact was announced, many predicted (including myself) that other studios and theater chains would soon follow, using this deal as the template.

But some studios aren’t having it. Like, not one bit.

Indie theater owners are there to back them up, too. Regal and Cinemark, the nation’s 2nd and 3rd biggest theater chains, have also joined the chorus of naysayers.

I’ll explain the backlash in a bit, but first: why did I not expect a backlash to occur? Why did this seem like a step in the inexorable direction? The answer is simple.

For years now, we have been fed a consistent and overwhelming media narrative that the shrinking of the theatrical-exclusive window was inevitable. This is what the public wants, allegedly. There’s no stopping it, and so the days of the theatrical experience are numbered.

More importantly, a cornerstone to this narrative is that this is exactly what the studios wanted.

The only problem, then, was those pesky theater owners. Old school and stuck in their outdated business models, it was theaters that were trying to keep everyone — and history itself — from moving forward.

Come to find out, that’s not the case at all. Not by a long shot.

According to the media’s conventional wisdom, this AMC/Universal deal should’ve finally bridged the gap that studios have allegedly been desperate to close. It exemplifies the best-case collaboration between the two opposing sides (studios and theater owners); it’s mutually beneficial in terms of finances and it’s also mutually agreed upon.

In essence, the ongoing narrative has told us that something like this needed to transpire. Given that, this deal should have served as a blueprint to make the new 17-day window an industry standard.

But suddenly, the very beneficiaries of such a deal — i.e. the soulless corporate studio execs who supposedly only care about making their shareholders happy and therefore would embrace a collapse of the theatrical window in favor of more pure profits for them — are not only upset, they’re fighting back.

Disney is the most fervent.

Their beef? Family films and mass-appeal blockbusters (Disney’s bread-and-butter) not only need longer theatrical windows to be profitable but, in terms of audience habits, families would be more prone to wait an extra couple of weeks to see a movie at home if given the choice. Worse yet, one $19.99 or $29.99 rental amounts to way less box office than if the same family of 4 (or more) saw the film at the theater.

For Disney, a half-month theatrical window is a death sentence. Other studios, even if more diversified, likely feel the same way. If Universal was being honest with themselves they’d likely agree, but the success of Trolls World Tour on PVOD (which occurred under pandemic circumstances that won’t remain true for the long-term) seems to have clouded their thinking.

In other words, major studios need theaters. Badly. Their very existence depends on them. Even Disney’s recent surprise move to put Mulan on Disney+ for a $30 rental rate doesn’t change that. If it did, they’d be shifting numerous other blockbusters-in-limbo to their streamer as well.

If you’re familiar my film coverage over the past few years, you know that I’ve been arguing this exact point, especially as Netflix has tried to undercut the theatrical model. The media’s long-held narrative has run counter to my thinking, and it’s a narrative that has effectively bent the knee to Netflix (and streaming) as “the future.”

But now, this AMC/Universal deal has put the whole media narrative to the test. The result: instead of the theatrical window collapsing, that narrative is.

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