Expanding on the deal Universal already struck with AMC, the company has forged another landmark agreement with Cinemark theaters to bring films to on-demand services earlier than ever before. The basics of the agreement are that Universal gets to drastically shorten the amount of time that a film has to run exclusively in theaters (usually 90 days or so) before being put up for on-demand purchase. In return, the theaters who are giving up their exclusive rights to show the films can put some restrictions on what can go to VOD, and likely some sort of financial kickback that hasn’t been made public.
There is a reason news like this is a big deal: for decades an exclusive 90 day run in theaters was pretty much guaranteed. If a company wanted a theater release, they didn’t have a choice. Now with the Coronavirus pandemic making theater releases practically untenable, both sides have been more eager to consider new options. Theaters obviously don’t want to be circumvented entirely, and studios still want the reputation and status that comes with full fledged silver screen showings, so a historic compromise was struck between Universal and AMC, and now it seems the company is continuing to expand that deal.
Of course, it’s a little more complicated than Universal getting free rein after 17 days. The big catch is that any film that makes more than $50 million on opening weekend has to stay in theaters for at least 31 days. This isn’t a huge stipulation for Universal though, as any film with the potential to make $50 million on the opening weekend will likely have an extended theater run regardless. This deal seems primed to get smaller projects a chance to hit VOD while they’re still in the public eye, allowing them to make more money off those who won’t, or can’t, go see the film in theaters.
Overall it seems this deal is in everyone’s best interests so long as the pandemic continues. It allows theaters a chance to continue showing films while giving studios a chance to make some money back via alternate distribution methods. This will still be on a case-by-case though, not every film will come to VOD within three weeks, and Universal Pictures still has discretion over how long they wait. The real question is whether or not this deal will last when the pandemic has come and gone, and what that might mean for the future of movie distribution.
Source: Variety
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