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Last week, Universal reached an agreement with AMC, America’s largest cinema chain, to reduce the time a film will have to stay in theaters before it can be viewed on demand.
The time and the 3rd largest chain, however, do not seek the theatrical showcase.
As a component of this new agreement with AMC, Universal can send a video on call for 17 days after its first release in theaters, a radical replacement for the classic 90-day time frame. This new policy would allow Universal to release a low-performing film on call for cinemas to capture an audience that is not in a position to venture into theaters, but would possibly be willing to pay to rent it at home.
“A competitive shortened theatrical window can have a negative effect on the end of a movie’s life,” said Mark Zoradi, executive director of Cinemark, America’s third-largest theater, in an effects call on Tuesday.
Zoradi said the film network is willing to talk to studios about converting the premiere window into cinemas, but would only do so if “it is in the most productive interest of the industry in general, our company and our shareholders.”
So far, Zoradi has said that there are no additional discussions with the studios for the theatrical window.
The Cineworld film, which operates around 7100 Regal Cinemas in the United States, has been stronger in its reaction to the AMC-Universal agreement. Last week, CEO Mooky Greidinger told CNBC that the company would replace its policy and only showcase films that respect the classic theatrical display case.
Together, Cinemark and Regal operate approximately 11,700 screens in the United States, more than the approximately 8,000 of AMC’s own.
While some analysts have praised the AMC-Universal agreement as “revolutionary,” others are more skeptical, fearing that AMC has entered into the agreement only to save their own company from bankruptcy. As a component of the pact with Universal, AMC will focus on profit flows, full monetary terms have not been disclosed.
AMC is affected by the coronavirus pandemic. Like many other major film networks, the company’s cinemas have been closed since mid-March and are waiting for new Hollywood blockbusters before launching a reopening.
The company has fought in recent months to avoid bankruptcy. AMC recently succeeded in a debt agreement to become solvent until 2021. Its shares have fallen by more than 42% since January.
Cinemark is not without problems. On Tuesday, the company reported a loss of $170 million, or $1.45 consistent with the stake, compared to a profit of $101 million a year ago, or 86 cents according to the stake.
The total profit at the time of the quarter fell to $9 million from $957.8 million last year, as the company’s cinemas were closed and sold tickets or concessions.
Cinemark will reopen a 3rd of its venues on August 21. Another 3rd will resume operations on 25 August, and the 3rd will open on 28 August.
While Cinemark shares rose by more than 7% on Tuesday, they have fallen by more than 63% since January.
Disclosure: Comcast is the parent company of NBCUniversal and CNBC.
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