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AMC and Universal Pictures Make Amends

A Historic Agreement to Shorten the Theatrical Window

AMC Entertainment Holdings (AMC), the world’s largest movie theater chain, and Comcast Corp.’s Universal Pictures (CMCSA) struck an important deal this week after months of conflict. Under the new agreement, the “theatrical window,” meaning the time between when Universal’s movies hit theaters and when they can be available for streaming, will shorten from 75 days to 17 days.

During the ongoing pandemic, movie theaters like AMC have suffered severely. Meanwhile, streaming services have seen their subscriber numbers soar. The deal between AMC and Universal diverges from the decades-long traditional relationship between Hollywood and movie theaters, but it reflects the way the pandemic has upended the movie business.

A Happy Ending?

In April, Universal released the movie Trolls Word Tour directly to streaming instead of waiting to release it when theaters could reopen. The film brought in about $100 million in revenue during its first three weeks online. This led the studio to say it might stick with this online release model for some of its future titles.

AMC criticized Universal’s decision and threatened to stop playing Universal’s films. As the pandemic drags on and many theaters remain closed, AMC and Universal have made amends in order to adapt to a changing landscape.

Both parties say they are enthusiastic about the deal and hope to benefit from it in different ways. For example, AMC has its own streaming platform, AMC Theaters On Demand, where it will offer new Universal releases. Universal will be able to save money on marketing by avoiding the hassle of creating two advertising campaigns months apart—once when a movie hits theaters and once when it is available to watch at home.

Coming Up Next

Analysts expect that AMC and Universal’s partnership may put pressure on competing theaters and studios to shorten their theatrical windows as well. It is difficult to predict how moviegoers will respond to these changes.

If and when most movie theaters reopen, some people will likely still be excited about seeing new films as early as possible. However, others may decide that waiting two weeks is easier than waiting two months, so they may opt to stream more new movies at home. Investors will be on the edge of their seats to see how this deal impacts AMC, Universal, and the movie industry as a whole.

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