AMC, Is This How You Want To Go?

Who would’ve thought that Trolls: World Tour of all movies would stir one of the biggest movie theater business controversies in recent memory?

After the success of DreamWorks Animation’s latest hit through video-on-demand services, Universal said that they would be looking to using streaming for more of their movies moving forward. In response, AMC Theatres, as well as Regal Cinemas, said that they would no longer play Universal’s films.

Personally, I am an advocate for seeing movies in theaters. There’s something about it that makes the movie itself an experience versus watching the movie at home under a blanket. 

That being said, this question is still on my mind:

“Is this the hill that AMC Theatres wants to die on?” 

With the rise of streaming services like Netflix and Hulu, VOD releases can be seen as a threat to the theater industry. Ticket sales dropped nearly 5% in 2019. And that’s with three of the top ten highest grossing movies of all time releasing that year (Frozen II, The Lion King and Avengers: Endgame). Fewer movies are being seen in the theaters, and beyond that, movies that would typically go to the theater, such as Martin Scorsese’s The Irishman, are now debuting on streaming services. 

If this trend continues, movie theaters will quickly become a relic of the past. Bigger releases will move to these platforms because more people will be willing to watch them. Instead of paying $13 per ticket plus $50 for snacks, a family can now pay $13 per month for the whole family, and $5 for a pack of microwavable popcorn. Film-watching is cheaper and more convenient.

Also, there is one teeny-tiny factor as to why Universal may consider streaming over theatrical release…

WE ARE UNDER LOCKDOWN!

COVID-19 has put everyone in a bind, not just the theater industry. Studios have movies that they want to release but can’t due to lockdown regulations. So, they are given 1 of 2 options. Delay the release or release via streaming. With theaters most likely not being able to open up until late July or early August, there will be a supersaturation of movie releases. What movie will pull more of an audience, Trolls: World Tour or Black Widow? Probably the latter. Going into market where one tentpole movie will be releasing once a week, a movie like Trolls: World Tour, which could find moderate success in April, would be dead-on-arrival in November. Therefore, it makes sense that Universal would want to release the movie via streaming. There’s nothing else on, so why not watch Trolls: World Tour to quiet the kids for 91 minutes?

Streaming services are the way of the future, especially for movies that are not considered major releases. Movies that may have had moderate success at the box office, now can become a juggernaut in streaming services. Trolls: World Tour became Universal’s most successful movie to be rented.

Would people have flocked to see Trolls: World Tour

Probably not. Universal was smart to release it via streaming. Rather than get a small sum, Universal opened the film to the possibility of become a home hit, which it is currently becoming.

AMC Theatres, however, is making a bad situation worse. Their decision is rash and could be the end for a company already on the verge of bankruptcy. Streaming is the way of the future. More families are willing to pay a $20 sum for a rental than pay $100 for the same thing but in a different place. Also, we are under lockdown. AMC cannot expect for companies like Universal to lose money by not releasing films. If that line of business shows success, then Universal should continue to pursue these types of releases for films. Movies that would not gross as much at the box office.

AMC’s reaction was rash and they were not thinking of the effects of COVID-19. They were thinking in the moment, and to an extent, in the past. They were not thinking future forward, rather, they were thinking that things will return to normalcy once all is said and done. Rather, theaters should look into starting streaming services themselves. AMC Theatres already has done this. While it’s the right step forward, it’s also very competitive, and burning bridges is not going to improve their business.

Final Thoughts

Theaters should look into home streaming, especially during this time of quarantine. But also find ways to improve relationships with the studio and understand that they are in the same bind as well. They should be willing to accommodate the studios and the studios should listen to the movie theaters. One way this could be done is by only allowing the movie to be accessed on the theaters streaming service. Rather than go through Prime, Apple TV or Vudu, studios could make a deal with theaters. Deals to where a movie like Trolls: World Tour will stream on AMC on Demand, wait three months, then release for purchase on all streaming platforms. This allows for the theaters to maintain some exclusivity with releases. While also allowing the movie studio to release their movies in apt time.

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