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AMC and Universal will slash the theatrical window period in a historic agreement

Thursday, July 30, 2020 by Robinhood Snacks |
_The thrill of the short-lived theatrical window_

The thrill of the short-lived theatrical window

Major plot twist... Three months ago, AMC banned all Universal movies from its theaters after some Trolls drama. TLDR: Universal made bank releasing Trolls World Tour direct to streaming, and said it'll do both digital and theatrical releases going forward. AMC reacted by excommunicating Universal. Now the two have struck a game-changing truce:

  • They're slashing the theatrical window from 75 days to just 17 days for Universal films shown at AMC theaters.
  • Theatrical window: The period that a movie has to be exclusively in theaters before release for home viewing.

An Oscar-worthy win for streamers... and a loss for theaters. The window has long been key to theaters' sales. Even though the first three weekends make up the bulk of those, slashing the window from 2.5 months to 2.5 weeks encourages people to wait for digital releases (manageable FOMO).

  • Customers get: Savings. While digital rentals will likely cost ~$20, there's no "pay-per-butt" charge. The whole family can watch for the price of 1 (and skip the $17 popcorn).
  • Universal gets: Money. Universal made more off 3 weeks of Trolls online rentals than 5 months of the original theater release. Big reason: streaming platforms take a smaller cut of sales than theaters do.
  • AMC gets: A lifeline. Theaters have been closed since March, and AMC could be looking at bankruptcy soon. Now it'll reportedly get a cut of Universal's sales from digital rentals and rights to release new Universal films on its own on-demand service.
THE TAKEAWAY

This could become the status quo... AMC is the world’s largest theater chain and Universal is a major studio. Others could follow their major league window-slashing. By the time the pandemic is over, homebound consumers might be used to saving money by watching new movies at home. Short windows might keep getting shorter (or even become non-existent).