Cinemark just made a good deal better.
This past summer, AMC and Universal Pictures struck a deal to shorten the theatrical window for Universal films. Previously, the industry standard for a movie’s exclusive theatrical run has averaged between 75-to-90 days before being made available on at-home formats. In July’s landmark agreement, AMC agreed to slash that to 17 days for Universal films. In return, Universal would share Video On Demand / Digital profits with AMC.
North America’s 3rd largest theater chain has agreed to a nearly-identical partnership with Universal that AMC struck – but they’ve also improved the terms, ones that will also now be extended to AMC as well.
The core of the agreement remains the same: Cinemark agrees to the new, shorter 17-day window in return for shared VOD profits. The shorter window is a voluntary option for Universal; it is not required or a fait accompli for every film. It’s simply allowing for flexibility in a market that will remain uncertain for quite some time.
Originally, the AMC deal was completely open-ended with no specific restrictions on what movies Universal could or could not pull after 17 days. Now, under the Cinemark deal, there’s an important new caveat: any movie that earns more than $50 million in opening weekend ticket sales must automatically remain in theaters for at least 31 days (or five weekends). And again, this new term will extend to Universal’s separate contract with AMC.
What that means is that big blockbusters – like entries from Universal’s Jurassic World, Fast & Furious, and Despicable Me franchises – will enjoy at least a full month’s exclusive run in theaters, guaranteed, barring some unforeseen disastrous flop by one of those titles (ones that are all-but-guaranteed a $100 million-plus opening weekend).
Of course, that’s under normal circumstances. Hopefully we’ll get back to a solid semblance of that at some point in 2021 but, in case that takes longer than we’d all hope, the deal protects Universal in cases where they try to test the market by launching one of their major multi-100-million dollar titles.
If the gamble is a bust, and people are still too reticent to come back to theaters at the time of the tentpole’s release, then Universal has at least a quick at-home option turnaround for having taken that risk.
Here’s why Cinemark’s deal could be a defining moment for the industry during the pandemic.
The reason Cinemark did a total one-eighty from their initial criticisms of the AMC / Universal deal is because that deal is paying off for theaters. By having that security from the #1 theater chain, Universal has become the least risk-averse of the major studios during the pandemic and are consistently providing theaters with much-needed content.
The studio (along with its specialty label Focus Features) has debuted new movies such as Freaky, Come Play, and Let Him Go in just the past three weeks. They will soon follow with the animated offering The Croods: A New Age over Thanksgiving and Tom Hanks’s News of the World at Christmas, as well as the dark indie comedy thriller Promising Young Woman from Focus Features, starring Carey Mulligan (who’s garnering Oscar buzz), also on December 25, among other titles.
Granted, these aren’t the tentpole mass appeal blockbusters that theaters are craving. Even so, these mid-range niche options have proven to be a vital (and consistent) infusion for a theatrical industry that’s desperate and on life support.
By Cinemark agreeing to this deal, they are acknowledging Universal’s risk and incentivizing more risk in the future. They’re also hoping to lure other studios into similar deals that would bring even more original content back to the big screens, and sooner.