Cinemark and Universal Pictures have forged a landmark agreement to bring theatrical movies more quickly to home entertainment.
Months ago, Universal struck an unexpected pact with AMC Theatres, the world’s largest theater chain, that gave the studio the option to put new movies on digital rental services after 17 days of theatrical release. The decision sent shockwaves throughout Hollywood because it dramatically shortened the timeframe (typically 75 to 90 days) that films play exclusively on the big screen. In exchange, Universal would share in the digital profits with AMC.
Cinemark has agreed to slightly different conditions. Under their terms, any movie that earns more than $50 million in opening weekend ticket sales has to stay in theaters for at least 31 days. All other titles will be available to rent on digital platforms after just 17 days.
According to insiders, those terms will also extend to AMC.
Neither agreement mandates that new releases have to move to premium video-on-demand after three weekends of release. However, it gives Universal the option should any film perform under expectations. Potential blockbusters like “Jurassic World” or anything under the “Fast & Furious” umbrella, as well as sleeper hits like 2018’s “Halloween” reboot, wouldn’t fall into the deal anyway. And any film that migrates to digital early will continue to play in theaters, should operators want to offer it to patrons.
The full financial terms of Universal and Cinemark’s deal have not been disclosed.
“Universal’s century-long partnership with exhibition is rooted in the theatrical experience, and we are more committed than ever for audiences to experience our movies on the big screen,” said Universal Filmed Entertainment Group chairman Donna Langley, who also orchestrated the studio’s historic deal with AMC. “Mark Zoradi and the team at Cinemark have been outstanding partners, and Peter Levinsohn [Vice Chairman & Chief Distribution Officer, UFEG] has done a remarkable job on the studio’s behalf in making deals that give us the confidence to release our movies in the marketplace, keep the content pipeline moving, and provide consumers with the optionality that they are looking for.”
The expedited timeline comes amid the coronavirus pandemic, a heath crisis that’s been devastating to those in the business of showing movies on the big screen. Regal, a rival chain, chose to closed down all U.S. locations, citing the lack of new movies and weak ticket sales. AMC, on the other hand, said its deal with Universal is the reason why they are able to stay open. The company has not shared any specific numbers surrounding revenue.
Universal, compared to rivals, has been active in debuting movies during the pandemic because of the flexible premium video-on-demand agreement. Universal’s recent and upcoming releases have been admittedly smaller in scale (read: less of a financial risk). The studio plans to save its most anticipated titles, like “Fast & Furious” sequel “F9” and “Jurassic World: Dominion,” for when moviegoing returns to a stronger degree. Before 2020 ends, Universal is opening “The Croods: A New Age” on Nov. 25, comedic drama “Half Brothers” and romantic tear-jerker “All My Life” on Nov. 4 and “News of the World” with Tom Hanks and “Promising Young Woman,” from Focus Features, on Christmas Day.
In a statement, Cinemark CEO Mark Zorado said the company believes in “a more dynamic theatrical window.”
“We are extremely pleased to further enhance our strong partnership with Universal as we evolve the exclusive theatrical window,” Zoradi said. “We believe a more dynamic theatrical window, whereby movie theaters continue to provide an event-sized launching platform for films that maximize box office and bolsters the success of subsequent distribution channels, is in the shared best interests of studios, exhibitors and, most importantly, moviegoers.”