At the time, Adam Aron, AMC’s chief executive, called Universal’s on-demand plans “categorically unacceptable” and said AMC would boycott Universal and any other studio “contemplating a whole change to the status quo.”
But the longer the pandemic went on, the more Universal and AMC came under pressure to come up with a new paradigm. The companies began negotiating, with AMC agreeing to limit exclusivity and the studio offering a major concession: For the first time, it agreed to share a portion of all premium on-demand rental revenue with AMC, significantly reducing the risk of earlier home availability for the chain. Neither Universal nor AMC would say how much AMC will be getting, but Mr. Aron appeared to be pleased with his cut.
“AMC enthusiastically embraces this new industry model,” he said in a statement on Tuesday, calling the deal “historic” and saying that his company was “participating in the entirety of the economics of the new structure.” At the same time, he said that clearing a path for Universal to improve its own profitability could benefit AMC by leading to the greenlighting of more theatrical movies, including comedies and dramas, which Universal and other studios have cut back on in recent years.
Mr. Aron added, “Just as restaurants have thrived even though every home has a kitchen, AMC is highly confident that moviegoers will come to our theaters in huge numbers in a post-pandemic world.” He predicted that people will be especially eager to get out of their homes — and visit theaters, which plan to reopen with numerous safety protocols — after hunkering down for months.
Since the coronavirus shut down theaters in mid-March, quite a few studios have opted to sell off smaller films — which are often riskier in terms of drawing a theatrical audience — to streaming services rather than waiting out the uncertain return of theaters. The move has kept money flowing to studios, but analysts say that it has undercut theaters by training consumers to expect new films to be instantly available in their homes.
Universal led the charge. Paramount Pictures gave up the Issa Rae-Kumail Nanjiani comedy “The Lovebirds” to Netflix, along with Aaron Sorkin’s Oscar hopeful “The Trial of the Chicago 7” starring Sacha Baron Cohen as Abbie Hoffman. “The SpongeBob Movie: Sponge on the Run,” which Paramount was initially supposed to release in theaters in May, will move to its parent company Viacom’s revamped streaming service CBS All Access in 2021. Warner Bros. sent its animated film “Scoob” to premium on demand and to its streaming sibling HBOMax. Sony Pictures sold “Greyhound,” a World War II Navy drama written by and starring Tom Hanks, to AppleTV+, buoying the struggling service’s cachet. Sony sold the Seth Rogen vehicle “An American Pickle” to HBO Max for release next month.
Disney made “Hamilton” available on its streaming service in July, canceling the film’s planned theatrical release and creating a cultural sonic boom that startled theater owners.