This market insight provides updates on the impact of COVID-19 (as at 29/4/20); discusses AMC's reaction to NBC Universal's comment of releasing movies in both theatrical and digital formats, a topic of debate for over a decade.
AMC’s CEO has vowed not to release any Universal movies in its cinemas worldwide following remarks by NBC Universal CEO in the Wall Street Journal that the studio will look to release movies on both formats (theatrical and digital) going forward, on the back of results from Trolls in its digital release.
The vast majority of films that were in the theatrical schedule before COVID-19 closed cinema down have been pushed back to new dates for a cinema release and will follow the theatrical-first model for a movie release. AMC, and other exhibitors, had not reacted to the moving of Trolls (and a few other titles like Artemis Fowl and Scoob from other studios) straight to digital. These had been the subject of discussion between partners and reassurance about the future, but the implication that Universal would look at theatrical and digital release (and by extension possibly day and date) for some films from now on is inflammatory. Such statements have led to product boycotts (and threats of boycott) in the past. This debate has been rumbling on for well over a decade and the response is a tested but strong one from AMC to a potential breaking of the theatrical window. Boycotts have usually been applied to a particular title.
The use of language seems to be the crux of this argument. NBCUniversal CEO didn’t explicitly say the studio would try and release on both platforms day and date. A follow-up statement from NBCUniversal made the point that the studio believes in the theatrical experience and underlined that the studio would continue to release in cinemas but also to look at PVOD when that platform makes sense. The implication could be read as that the studio would see which platform is more appropriate for each film, thus choosing to release some films in digital instead of theatrical. However, it could also be taken to mean the studio would seek to release on both at the same time. For me, it is ambiguous as it stands.
The North American cinema trade body NATO believes that NBC Universal has used this situation to experiment with a digital release, but that the relative success of Trolls on VOD is not a shift in consumer attitudes, more a response to wanting entertainment during lockdown. UNIC, the International Union of Cinemas, made the point that the success of this film should be viewed in the light of the current circumstances. It also highlighted that the film had received a marketing release for a theatrical film which drove awareness. A future release on digital may not receive the same marketing funds as Trolls did.
Cineworld, which owns US exhibitor Regal, has today stated that it will not release films that don’t respect the window.
While cinemas are closed during lockdown, it is understandable that a studio may wish to make some money on a movie that suited a digital release and whose marketing had already been committed to a target audience that was on holiday from school. However, this is clearly a title released differently during an exceptional time, and it is questionable to extrapolate that this will work for titles when cinemas are operating normally again. In strategic terms, exceptions don’t often make good case studies for future direction. NBC Universal took $3.7billion worldwide globally in 2019 ($5billion and $4.9billion in the two previous years). AMC is now one of the world’s largest exhibitors, operating nearly 11,000 screens in Europe, Middle East and Asia, and major Chinese exhibition group Wanda is also a major shareholder.
In the UK, film agency BFI is launching a £2m crisis fund for independent producers affected by the current shutdown. The BFI Covid-19 Production Continuation Fund can grant a maximum of £150,000 for a project hit by the crisis.
UIniversal’s King of Staten Island is foregoing a theatrical release planned for 19 June 2020 and moving straight to Premium VOD on 12 June 2020.