In a landmark deal that could change the shape of film distribution, AMC Theatres and Universal Pictures have agreed on a pact to release big Hollywood films in the home much sooner than before.
AMC and Universal on Tuesday announced an agreement to dramatically shorten the traditional minimum gap between a movie's theatrical release and its availability for home viewing to less than three weeks.
Under the deal, theaters will have exclusive rights to show Universal movies for at least three weekends, or 17 days. After that period, the Comcast Corp.-owned studio will have the option to rent out its movies through video-on-demand platforms at a minimum of $19.99 for a 48-hour rental window.
That's a significant change from the norm, in which major films aren't released for home viewing until an average of 90 days after their big-screen premiere.
AMC, owned by China's Dalian Wanda Group, will get a cut of revenue from the digital releases, the companies said.
Terms of the deal were not disclosed.
The pact between Leawood, Kan.-based AMC — which is the world's largest cinema operator — and one of the major movie studios is the first of its kind.
The movies will be available on digital retailers such as iTunes, Amazon Prime and YouTube, as well as on Comcast-owned video-on-demand platforms and AMC's own movie-selling site, AMC Theatres On Demand.
The companies said the deal is a way to preserve the theatrical film industry while also responding to changing consumer demands.
AMC Chief Executive Adam Aron said the company "enthusiastically embraces this new industry model," adding that "Universal and AMC each believe this will expand the market and benefit us all."
The deal doesn't mean that every Universal movie is coming to the home after less than three weeks. Some movies probably will have longer exclusive theatrical runs before going to premium video on demand. A global blockbuster such as "Fast & Furious 9" or "Jurassic World: Dominion" probably will benefit from staying only in theaters longer, because of the high production budgets and big-screen appeal.
Other genres could gain from shorter windows, especially comedies and rom-coms, which have struggled to draw large cinema audiences in recent years.
"The theatrical experience continues to be the cornerstone of our business," Universal Filmed Entertainment Group Chairwoman Donna Langley said in a statement. "The partnership we’ve forged with AMC is driven by our collective desire to ensure a thriving future for the film distribution ecosystem and to meet consumer demand with flexibility and optionality.”
It's unclear whether Universal will secure a similar agreement with other exhibitors, or whether other studios, such as Walt Disney Co., Paramount Pictures, Warner Bros. or Sony Pictures, would make a similar pact with AMC.
AMC offered the same deal terms to all the major studios as it did to Universal, according to two people with direct knowledge of the terms who were not authorized to comment. AMC offered to collect 20% of the gross revenue from the premium video-on-demand rentals and receive a 2% reduction in film rental terms, according to a studio source who was not authorized to comment.
Some studios may balk at the revenue-sharing terms.
Nonetheless, the agreement has the potential to resolve one the biggest disputes between the nation's theater owners and movie studios.
Theater chains have long resisted efforts by studios to shorten the release gap, known as the theatrical window, because they viewed such moves as a threat to their business model.
But Universal and other studios have long favored the shortened window, contending that viewers want to be able to watch their movies at home sooner and that delaying releases encourages piracy.
The deal is a surprise in part because of a recent war of words between AMC and Universal. During the COVID-19 pandemic that has pummeled the major exhibitors, Universal Pictures, led by NBCUniversal Chief Executive Jeff Shell, charged ahead with early digital releases in a way that angered theater owners, including AMC.
The company in mid-March announced plans to move its theatrical releases to digital retailers, charging $20 for a 48-hour rental of movies, including "The Invisible Man," "The Hunt" and "Emma."
In its boldest move, Universal released its DreamWorks Animation sequel "Trolls World Tour," for online viewing on the same day as its planned theatrical release. Shell later declared the "Trolls" experiment a success and said the studio would pursue similar releases for its future movies.
In response, AMC blasted Universal for going around theaters and said it would no longer show the studio's movies in its 1,000 global locations.
Major chains including AMC and Regal have been waiting for studios to release new movies in hopes of drawing patrons back to the multiplex. However, the public health crisis has forced studios to delay their premiere dates multiple times.
Warner Bros. on Monday said that it wouldn't release its Christopher Nolan film "Tenet" until Labor Day weekend in "select cities," domestically. It will show the film earlier in other countries. Walt Disney Co. last week postponed plans to release its live-action "Mulan" remake indefinitely.