Universal would probably have come to an agreement with the largest film network in the United States, but it would possibly disagree with the second-largest film network if it seeks to deviate from the classic film-opening model.
“At Cineworld /Regal, we’re turning our policy of just streaming movies that respect the theatrical showcase,” Mooky Greidinger, CEO of Cineworld, told CNBC.
The Cineworld world exhibitor owns the American channel Regal Theaters, which operates 7,100 screens. By comparison, AMC lastly operates approximately 8,000 screens.
Cinemark, the third largest cinema chain, did not respond to CNBC’s request for comment.
The landmark agreement between AMC and Universal, which was unveiled Tuesday, stipulates that Universal and its subsidiary Focus Features will have to play videos in theaters for at least 3 weekends, or 17 days, before seeking a premium video release on demand. Previously, the cinema chain had exclusive rights to the films for about 90 days.
As a component of the pact, AMC will make a percentage of the profit streams, whether corporations have refused to disclose all the terms of the monetary agreement.
An agreement like this can help AMC reap sales through premium video-on-demand versions to offset some of the loss of a historically longer theatrical window. However, without knowing the terms of the agreement, it is not known what advantages AMC gains from this strategy.
For Universal, it’s more of a clear win-win situation, if a movie does well at the box office, it stays at the box office. In the case of poor box office performance, the company would now have the opportunity to take the film to other platforms before verifying and succeeding in a market that did not target theaters.
But Greidinger is skeptical. “We don’t see any advertising meaning in this model,” he said.
“While we don’t know all the details, we’re still looking at new trade resolutions within the industry,” he said. “People want to be aware that Universal’s first main film will probably not be released in six months, so there is no tension here; However, we obviously see this as a bad resolution at the time.”
Earlier this year, Universal postponed most of its premieres from 2020 to 2021. However, it still has a handful of films to be released in theaters this year, adding “Candyman” and “The Croods 2”. Universal owns the international distribution rights to the new James Bond film “No Time to Die”, but the rights to national distribution.
AMC shares have fallen by nearly 43% since January as it struggled to avoid bankruptcy. Recently, the company was able to participate in a debt agreement to become solvent until 2021.
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