AMC/Universal Deal is a Cataclysmic Event for the Movie Industry

This is a pretty big development because of how it changes the industry indefinitely. It took me some time to write about today’s AMC/Universal deal because I needed a few more hours to process it and, folks, there is no doubt in my mind that what was announced this afternoon is akin to a damn-near cataclysmic event for the industry as a whole.

AMC has struck a historic deal with Universal, shortening the number of days their films need to run in theaters before going digital on VOD. Considering how backloaded profits for theaters are, this could effectively kill them if it becomes standard practice.

The gist of the deal has AMC Theaters agreeing to show Universal Pictures films on the big screen by granting Universal a smaller theatrical window so it could make its titles available on-demand sooner. As part of the deal, Universal and Focus Features must play movies in cinemas for at least three weekends, or 17 days, before releasing those films on premium video on-demand platforms. Previously, theaters would have the exclusive rights to films for 90 days.

A key component from this deal that not many are talking about is that AMC will also share in the revenue from video-on-demand sales. That means the other chains will be left in the dark and suffer the consequences of this deal by not being able to show Universal movies, let alone profit off of them.

This to me sounds like AMC pulling the dead man’s switch on the entire industry. They know that, due to the current pandemic, their business model has effectively changed permanently, no matter how this all shakes out, and there’s also probably more truth to the story about their financial problems than they care to admit at this point. The way I see it is that they are desperately taking the deal that might buy their shareholders another year or two, even though in the long run it’s going to be the death of the entire business model and the entire industry along with it. This is all pure speculation on my part, but it just takes common sense to reasonably think of this scenario as highly plausible and I may very well be proven right in the coming months.

This could also, most certainly, spell the end of the road for smaller chains that don’t have nearly have the negotiating power that AMC has. It’s really just bad for theaters in general. The destruction of the theatrical experience, at least in the shape that we know it as right now, was slowly crumbling apart before the COVID-19 pandemic happened, but these last 5 months have accelerated that inevitable process ten-fold. We have officially entered a new era of moviegoing.