- Universal Pictures announced Tuesday that it would pursue dual theatrical and on-demand releases for new films even after movie theaters reopen.
- Shortly after that, AMC Theaters condemned Universal’s plan and immediately blacklisted all of the studio’s future films from its screens.
- AMC CEO Adam Aron also accused Universal of having “zero concern” for how such a move would affect the theater chain’s revenue and viability.
- Wednesday morning, Regal Entertainment said it would also blacklist Universal movies.
- The moves by all three companies could result in a massive shift in the way Americans view movies and could be financially dangerous for all entities involved.
Universal Says It Will Continue On-Demand Releases
At the start of the year, many people probably wouldn’t have imagined that an animated film about troll dolls could ignite a war between a major movie studio and the world’s largest theater chain, but 2020 has proven itself unpredictable.
When movie theaters shut their doors in response to the coronavirus outbreaks in the United States, Universal Pictures decided to test on-demand releases for several of its new films, including Trolls World Tour. After seeing massive success with that film, Universal is now saying it will continue the practice once theaters reopen.
In turn, Adam Aron, CEO of AMC movie theaters, called the move “unacceptable” and said the chain has now blacklisted all Universal movies from airing on its screens. Wednesday morning, Regal Entertainment responded with a similar ban.
Universal, AMC, and Regal’s moves represent what could be massive shifts for the movie industry. Such moves also signal how the coronavirus pandemic might fundamentally change the way Americans consume entertainment.
Unlike movies such as F9, Black Widow, and Wonder Woman 1984, which were all postponed until either later this year or next year, Universal released the Trolls sequel through digital rental for $19.99.
While $20 is a steep price to pay for a rental, Universal argued the price was meant to compensate for the fact that the film didn’t see widespread release in theaters. Such a defense didn’t stop many on social media sites from criticizing the film’s price, but three weeks after its release, the film has proved to be an unprecedented success for Universal. It raked in nearly $100 million through on-demand 48-hour rentals.
So far, that is still less than the nearly $154 million the first Trolls film made in the U.S. over five months in 2016; however, because movie theaters generally take about 50% of the box office revenue, Universal only took home around $77 million from the first Trolls film domestically.
By contrast, Universal has kept about 80% of what it made through renting Trolls World Tour. Notably, that means the sequel is already more profitable than the original film.
“The results for ‘Trolls World Tour’ have exceeded our expectations and demonstrated the viability of [premium video on demand],” Jeff Shell, head of the film studio’s parent division, NBCUniversal, told The Wall Street Journal. “As soon as theaters reopen, we expect to release movies on both formats.”
Universal has also reported a level of success by implementing the same on-demand strategy with movies like The Invisible Man, The Hunt, Emma, and Never Rarely Sometimes Always. Reportedly, they have generated around $60 million from rental fees, meaning $48 million of that has gone directly back to Universal.
Before theaters shut down, The Invisible Man had brought in about $64 million in the U.S. and Canada. The other three had generated about $16 million, collectively.
AMC and Regal Won’t Play ANY Universal Movies
Following Shell’s comments, Aron retaliated by saying that AMC, the largest movie theater chain in the world, would pull the plug on all movies from Universal.
“AMC believes that with this proposed action to go to the home and theatres simultaneously, Universal is breaking the business model and dealings between our two companies,” Aron wrote in a statement on Tuesday.
“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. It also presumes that Universal, in fact, can have its cake and eat it too, that Universal film product can be released to the home and theatres at the same time, without modification to the current economic arrangements between us.”
“It is disappointing to us, but Jeff’s comments as to Universal’s unilateral actions and intentions have left us with no choice,” Aron added. “Therefore, effectively immediately, AMC will no longer play any Universal movies in any of our theatres in the United States, Europe or the Middle East.”
Wednesday, Regal Entertainment, the second largest theater chain in the world, called Universal’s decision “completely inappropriate” and said, “We make it clear again that we will not be showing movies that fail to respect the windows.”
Notably, that would mean AMC and Regal would not screen a host of films that are expected to be major box office hits, including F9, the James Bond film No Time to Die, and Jurassic World: Dominion. F9 alone is expected to bring in close to $1 billion worldwide, if not more, and crippling its theatrical release could prove to be a major blow for Universal.
Still, these moves represent a precarious balance for both companies. Universal likely wants to continue its success from Trolls World Tour and adapt to what it believes is a more profitable model. Meanwhile, AMC and Regal want to retain their customer bases and are likely concerned that dual theatrical and on-demand film releases could hurt them. Despite that, not showing a major studio’s films could be a huge blow to the chains.
Still, Aron has double-downed on his statement and said it is “not some hollow or ill-considered threat.”
“Incidentally, this policy is not aimed solely at Universal out of pique or to be punitive in any way, Aron said. “It also 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.”
Universal’s announcement has also received the condemnation of the National Association of Theatre Owners (NATO), which has argued that the success of Trolls World Tour is an outlier and not a new normal.
“Universal does not have reason to use unusual circumstances in an unprecedented environment as a springboard to bypass true theatrical releases,” NATO president and CEO John Fithian said in a statement Tuesday. “Theaters provide a beloved immersive, shared experience that cannot be replicated—an experience that many of the viewers of this film would have participated in had the world not been sequestered at home, desperate for something new to watch with their families.”
Part of NATO’s argument is that Trolls World Tour was released at a time when parents were desperate to provide entertainment for their children. That was likely aided by the fact that Trolls World Tour experienced very little competition, as many other studios chose to postpone new releases.
Universal has since responded to the criticism lodged at it by AMC and NATO while reiterating its plan to implement dual theatrical and on-demand releases.
“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,” the company said in a statement. “Based on the enthusiastic response to the film, we believe we made the right move. 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,” the statement continued. “We absolutely believe in the theatrical experience and have made no statement to the contrary. 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.”
Universal also added that it looks 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.”
Other Film Studios Choose On-Demand or Streamable Releases
Universal is not the only studio choosing to go the on-demand route. Warner Bros. is planning to release Scoob! on May 15 with a $19.99 rental fee. Notably, it will also be available to buy right away for $24.99.
Other companies, such as Disney, have now shifted some of their movies to Disney+ instead of waiting for theaters to reopen. Artemis Fowl was originally scheduled for an Aug. 9 theatrical release, but the company will now release the film on its streaming service on June 12. Likewise, Disney also released Onward on Disney+ after its theatrical release was cut short. While those movies won’t be able to generate any direct revenue, Disney is hoping they drive the company’s $6.99 subscriptions.
Still, Disney seems to be saving its major releases like Mulan and Black Widow for theatrical releases.
In fact, even Universal has been wary to test its blockbusters through rental services. For films like F9, a theatrical release may simply be too profitable to pass up.
With such massive moves by Universal, AMC, and Regal, however, the question remains: Will the coronavirus pandemic change how Americans view movies, and if so, how?
See what others are saying: (CNBC) (The Wall Street Journal) (The Hollywood Reporter)
Joe Rogan Says Grimes Did Not Give Dave Chappelle COVID-19
- Comedian Dave Chappelle is under quarantine after testing positive for COVID-19. He is asymptomatic and his remaining shows in Austin, Texas have been canceled.
- The news comes just days after Chappelle was photographed with Joe Rogan, Elon Musk, Grimes, and several others backstage at one of his Austin performances.
- “Because people are asking, I was not exposed to the person who had covid and I have tested negative every day this week,” Rogan wrote on Instagram Friday. “Also, the person that gave covid to Dave was NOT Elon’s partner @grimes.”
Chappelle Tests Positive
Comedian Dave Chappelle has tested positive for coronavirus and is currently under quarantine, according to one of his representatives.
In a statement to The Hollywood Reporter, that rep also confirmed that he is currently asymptomatic and has canceled all of his remaining shows at Stubbs Waller Creek Amphitheater in Austin, Texas.
“Chappelle has safely conducted socially-distanced shows in Ohio since June 2020 and he moved those shows to Austin during the winter,” the statement read.
“Chappelle implemented COVID-19 protocols which included rapid testing for the audience and daily testing for himself and his team. His diligent testing enabled him to immediately respond by quarantining, thus mitigating the spread of the virus,” it continued.
Joe Rogan Speaks Out After He Was Photographed With Chappelle
Two of the remaining Austin shows were supposed to include fellow comedian Joe Rogan. Rogan took to Instagram Friday morning to announce that they will be rescheduled as soon as possible.
Still, many fans had questions about Rogan’s current state of health. The news of Chappelle’s positive test comes just days after he was photographed maskless with Rogan, Tesla CEO Elon Musk, musician Grimes, and several others backstage at one of his Austin performances.
Since Grimes, who is also in a relationship with Musk, recently had COVID, many were concerned that she may have exposed the group. Others wondered if Chappelle may have spread it.
Rogan eventually updates his Instagram caption to dismiss the ideas.
“Because people are asking, I was not exposed to the person who had covid and I have tested negative every day this week,” he wrote.“Also, the person that gave covid to Dave was NOT Elon’s partner @grimes.”
See what others are saying: (The Hollywood Reporter) (CNN) (AP News)
Netflix Passes 200M Subscribers as Other Streamers Struggle With Retention
- In a letter to shareholders, Netflix said it has hit over 200 million subscribers following a successful year of growth.
- The pandemic gave Netflix a significant subscriber boost in March and April. The company continued to perform well even in its final quarter, gaining 8.5 million subscribers when it was only projected to add 6 million.
- The data also highlights how relatively unaffected Netflix has been by new streaming services entering the market. While companies like Disney+, HBO Max, and Peacock continue to grow, they also struggle to retain the subscribers that sign up.
Netflix Passes 200 Million Subscribers
Netflix has topped 200 million subscribers following a year of strong growth in 2020.
In its Tuesday letter to shareholders, Netflix announced that it added 8.5 million subscribers in its fourth quarter. This exceeds projections, which estimated the streaming giant would only add around 6 million. In total, Netflix gained 37 million new memberships throughout 2020, bringing the company to 203.6 million subscribers.
Pandemic lockdowns gave Netflix a substantial boost in March in April. In the company’s first two quarters, it added a combined 25.7 million subscribers. According to data from the letter, Netflix had added over 10 million more subscribers by May of 2020 than it had by May of 2019.
When it comes to the success of their fourth quarter, Netflix pointed to shows like “Bridgerton” and “The Crown.” The fourth season of “The Crown” hit the platform in November, prompting many to return to older seasons of the show. Netflix claims the series has been viewed by 100 million households since it first aired in 2016.
Success Amid Growth of Competition
The year 2020 could have been a difficult one for Netflix as new streaming services entered the market. Disney+, Apple TV+, HBO Max, Peacock and more have all made waves with their original programming or by taking some of their brand’s content from Netflix to host on their own site. User-based content on YouTube and TikTok also became increasingly popular throughout the pandemic, further posing as a threat to Netflix.
Still, it reached a massive milestone.
“Our strategy is simple: if we can continue to improve Netflix every day to better delight our members, we can be their first choice for streaming entertainment,” Netflix said in the letter. “This past year is a testament to this approach.”
Netflix potentially sees Disney+ as the biggest competitor among new platforms. In its letter, the company noted that the streamer added 87 million subscribers in its first year. In a Q&A, Netflix CEO Reed Hastings seemed enthusiastic about this competition.
“It’s super impressive what Disney’s done,” he said. “It’s going to be great for the world that Disney and Netflix are competing show-by-show, movie-by-movie. We’re very fired up about catching them in family animation, maybe eventually passing them, we’ll see. It’s a long way to go just to catch them, and maintaining our lead in general entertainment that’s so stimulating like ‘Bridgerton,’ which I don’t think you’re going to see on Disney anytime soon.”
Streamers Struggle with Retaining Subscribers
Even as new streamers have had impressive years, there is one hurdle that many are still struggling to jump over: retaining the subscribers who sign up. The Los Angeles Times named Disney+, HBO Max, Peacock, and Apple TV+ in particular, writing that people create accounts with these services, watch the TV shows or movies they are interested in, and cancel once they are done.
An October survey from Deloitte said that 46% of respondents canceled at least one streaming service in the last 6 months, which is up 20% from January of last year. Most who had canceled said they did so because they had finished watching whatever programming it was that brought them to that service.
Places like Disney+ and HBO Max are really vulnerable to this because they have banked on drawing people in with exclusive marquis titles like “Hamilton” or “Wonder Woman 1984.” However, since they are newer, they are still building their original programming catalog, meaning that people can quickly burn through highlight titles.
See what others are saying: (Los Angeles Times) (Wall Street Journal) (The Hollywood Reporter)
Paramount+ To Launch March 4
- ViacomCBS is launching Paramount+ in the United States and Latin America on March 4 before rolling out to other markets internationally later this year.
- The streaming service will be a relaunch and expansion of CBS All Access. It will include content from Nickelodeon, MTV, and more on top of the CBS-focused selection.
Paramount+ Gets Launch Date
ViacomCBS will be launching its streaming service Paramount+ in the U.S. and Latin America on March 4 before rolling out in more countries throughout the year.
It will be an expansion and rebrand of CBS All Access, the service the company currently offers that is used by nearly 8 million subscribers. Paramount+ will go beyond the CBS-centric content promoted there, including works from brands like Nickelodeon, MTV, BET, Comedy Central, and the Smithsonian Channel.
More details about their streaming strategy will be released during an investor event on February 24. Right now, ViacomCBS is boasting that the service will have over 30,000 episodes and movies in their catalog, which will also include live sports and breaking news.
“The Paramount brand is known and loved all around the world, and is synonymous with great entertainment. It’s always brought people together, which makes it a perfect fit for a streaming service that’s uniquely positioned to do the same,” Josh Line the chief brand officer of ViacomCBS said during a brand announcement in September. “The Paramount+ streaming service will elevate ViacomCBS’ iconic family of brands.”
State of the Streaming Wars
Paramount+ has already announced a slew of original projects including a revival of “iCarly” and a series about the making of “The Godfather” titled “The Offer.”
The service is entering an already crowded battlefield as the streaming wars wages on. It will have plenty of uphill battles to fight since brand recognition for Paramount is not nearly as strong as it is for studios like Disney or NBCUniversal. It will also have to compete with Netflix, which leads the pack in subscribers and unveils new content regularly; HBO Max, which will be home to Warner Media’s new theatrical releases; and Hulu, which hosts original content as well as shows currently airing on cable and network television.
ViacomCBS has not released information on pricing, but that will likely come during or before the February investor event.