AMC Refuses to Play Universal Films After Trolls World Tour Earns Close to $100 Million in Rentals
AMC Theaters is fighting back against Universal Pictures after the studio sent Trolls World Tour straight to Video on Demand.
The movie theater chain announced it would no longer play any Universal Pictures movies after the children’s film earned an estimated $100 million in premium VOD rentals in its first three weeks in the U.S., according to The Hollywood Reporter. In response, a spokesperson for Universal Pictures told PEOPLE in a statement that the studio is "disappointed" by AMC's actions.
Universal chose to bypass a theatrical release for Trolls World Tour due to the current coronavirus pandemic and instead released the film on-demand with a rental fee of $19.99.
NBCUniversal CEO Jeff Shell told the Wall Street Journal, “The results for Trolls World Tour have exceeded our expectations and demonstrated the viability for PVOD. As soon as theaters reopen, we expect to release movies on both formats.”
AMC Theaters chair-CEO Adam Aron wrote a strongly worded letter to Donna Langley, the chairman of Universal Filmed Entertainment Group, saying Shell’s comments and actions were "breaking the business model and dealings between our two companies."
"It assumes that we will meekly accept a reshaped view of how studios and exhibitors should interact, with zero concern on Universal's part as to how its actions affect us," Aron wrote, according to THR, adding the company assumes it "can have its cake and eat it too."
"It is disappointing to us, but Jeff’s comments as to Universal’s unilateral actions and intentions have left us with no choice," Aron continued. "Therefore, effective immediately AMC will no longer play any Universal movies in any of our theaters in the United States, Europe or the Middle East."
Aron wrote, "This policy affects any and all Universal movies per se, goes into effect today and as our theaters reopen, and is not some hollow or ill-considered threat."
He added AMC's decision was "not aimed solely at Universal out of pique," but that it extends "to any movie maker who unilaterally abandons current windowing practices absent good faith negotiations between us, so that they as distributor and we as exhibitor both benefit and neither are hurt from such changes."
Aron made it clear "AMC is willing to sit down with Universal to discuss different windows strategies and different economic models between your company and ours," but that since those discussions haven't taken place "our decades of incredibly successful business activity together has sadly come to an end."
A spokesperson for Universal Pictures tells PEOPLE, “Our goal in releasing Trolls: World Tour on PVOD was to deliver entertainment to people who are sheltering at home, while movie theatres and other forms of outside entertainment are unavailable."
"Based on the enthusiastic response to the film, we believe we made the right move," they continued. "In fact, given the choice of not releasing Trolls: World Tour, which would not only have prevented consumers from experiencing the movie but also negatively impacted our partners and employees, the decision was clear. Our desire has always been to efficiently deliver entertainment to as wide an audience as possible."
"We absolutely believe in the theatrical experience and have made no statement to the contrary," they added. "As we stated earlier, going forward, we expect to release future films directly to theatres, as well as on PVOD when that distribution outlet makes sense. We look forward to having additional private conversations with our exhibition partners but are disappointed by this seemingly coordinated attempt from AMC and NATO to confuse our position and our actions.”
Trolls World Tour premiered on all major on-demand platforms on April 10 and has scored nearly 5 million rentals since its mid-April debut and earned close to $100 million in digital rental fees, according to The Wrap.
The original film, produced with a $125 million budget, grossed $153.7 million domestically and $346.9 million worldwide.
Universal has reportedly also earned millions in $19.99 digital rentals from other titles as well, including The Invisible Man and The Hunt, according to multiple reports. These films had initially been in movie theaters when cinemas nationwide shut down due to the current health crisis and were later released early on demand.
The studio has other movies scheduled for release including F9, Halloween Kills, The Croods 2, Jurassic World: Dominion, Sing 2 and Minions: The Rise of Gru.
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