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AMC Launches Spring Offensive As The Battle To Decide The Future Of Cinema Begins

Pacifica Yield profile picture
Pacifica Yield


  • AMC will no longer show any of Universal's films.
  • This move essentially bans large titles like No Time To Die and Fast & Furious 9 from the big screen.
  • The intensity of this spring offensive is weakened by AMC's precarious financial position.

The battle officially started with a sombre letter from AMC (NYSE:AMC) published by Deadline on April 28th. In the letter, AMC's Chief Executive Officer Adam Aron fires the first shot: "effectively immediately AMC will no longer play any Universal movies in any of our theatres". This blanket ban will be applied by all of AMC's theatres in the United States, Europe, and the Middle East.

A state of conflict now exists between AMC and Universal, the victor of which will get to shape the future of cinema in the years to come. It is important for readers to understand that the ramifications of this battle will extend far beyond AMC and Universal. Cinemas have long acted as anchor tenants for shopping malls, their threatened extinction will have significant consequences for the already perilous existence of the brick-and-mortar stores and restaurants.


The catalyst to this battle was Trolls World Tour, a children's computer-animated film that was originally slated to be released theatrically on April 10. While the coronavirus pandemic forced big film studios to delay the release of films such a No Time To Die (Universal), Wonder Woman 1984 (Disney) and Fast & Furious 9 (Universal), Trolls World Tour went straight to rental on digital platforms.

The apparent commercial success of this move spurred Jeff Shell, NBC Universal's CEO, to make statements alluding to a future state where films are released theatrically and on digital rental on the same day. Hence, the long-established industry practice of a 90-day theatrical release window looks soon to be uprooted.

Echoes Of A Sombre Past From The Men Of The Future

AMC is not in the best financial position for a protracted battle against Universal. The company's high debt load amassed on the back of its past acquisitions have catalysed a deterioration of its

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Pacifica Yield profile picture
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Comments (28)

Diesel profile picture
In 2 weeks this stock went from "preparing for bankruptcy" to "approaching pre-covid levels".
The game isn't over yet. The shorts got squeezed a bit. It wouldn't surprise me if AMC retests the lows or makes new lows.
oh nobody seems to mention that AMC has the biggest TV shows of all time, walking dead fear The walking Dead .and I hear there's two or three walking Dead movies coming out as well. this should help carry AMC somewhat
Roseded profile picture
Actually they do mention it, once in a while, despite the fact that AMC Network is a complete different thing from AMC the theatre chain. Says a lot on their bullish stance.
thanks for the clarification,was not if AMC movies in the AMC walking Dead or two different things, now I know ,thanks for getting back to me
FYI theaters in France reopening end of june and beginning of july for germany
Diesel profile picture
Yeah but what they are going to show? Soccer games? No new movies will be launched anytime soon.
Andrew Shapiro profile picture
@Diesel incorrect - theaters are going to warm up with popular library product in mid/late june and then Russel Crowe in Unhinged comes out July 1. First big tentpole is Warner Bros Tenet mid July followed by Mulan 3rd week. Here's July release calendar as of today.
If they are allowed to reopen too soon and do it, if attendance is very low it would be much worse than delaying the reopening some more.
what the hell is AMC thinking ?dropping universal is huge mistake.
Andrew Shapiro profile picture
@gymhog @xamd is right on point. Note - there is plenty of other product to fill the screens from other studios who remain partners with exhibitors who in return for currently negotiated exclusivity windows get a 60% of gate film rental royalty. Universal's unilateral Day & date stance puts at risk how much the 40% that exhibitors get will be generated to cover 100% of the exhibitors operating costs. $AMC is not the only one boycotting Universal, $Cine.LN (Regal) and others will all hold the line until they get more of the box office gate or a % of downstream income the studios collect.
"Universal's unilateral Day & date stance puts at risk how much the 40% that exhibitors get will be generated to cover 100% of the exhibitors operating costs. "

No, much of the theater operating costs are paid from their margin on refreshments. Try thinking of the movie studio as being a software producer. The marginal cost(cost for each extra customer) is very low. Therefore to optimize revenue it makes sense to have the price low, and give incentives for people to consume more. If the movie studios owned theaters, then perhaps a theater that normally charges $12 admission to a movie could have a deal, watch another movie in one of their theaters within a week for just $8. Or they could have a deal that if you come to the theater with 4 or more people anytime besides peak time(movies starting between 7 and 10 pm) admission is just $10 a person.
Andrew Shapiro profile picture
@6228371 - you miss the point - no matter what the per capita consumption of concessions are, if there is no 'per capita' then exhibitors are sucking on fixed costs without the concession sales. Any studio shrinking the window is direct threat to attendance.
xamd profile picture
I really dont understand the Universal stance. I mean no matter if the cinemas are weaker or stronger, it is another source of income. I cant imagine any seller wants to off the head of one of his buyers strong or weak. There is going to be some people who would never rent or buy the dvd or stream it what ever it is and will just see it in the cinema. You reach more customers with more outlets. Thats all there is to it for me. I have a movie. I can get it out to more outlets cinema or home, more income. Is this rocket science? Why does Universal want to shoot itself in the foot? Could Netflix make more money if they showed some of their releases in cinemas? Duh.
"I really dont understand the Universal stance. "

I don't understand the AMC stance. When Apple started opening its own stores, Best Buy and Walmart didn't tell Apple that they would stop selling Apple products until Apple closed all their company owned retail stores.

"Why does Universal want to shoot itself in the foot? "

They want the theaters to take a smaller percentage of the ticket sales. Perhaps soon the movie studios might even start insisting on part of the profits on refreshments. The problem is that many new movies cost way too much to make, and that some of the high cost movies are so bad.
Trolls benefited from the fact that the first one was a solid BO success. If this wasn't a sequel, you would likely have seen far less buzz. Plus all of the unique scenarios right now.

Everyone keeps predicting the demise of theaters, yet it hasn't happened yet. Year after year, global box office keeps growing. Could US have peaked? Maybe. That's why most companies are aiming for a global footprint.

The arguments about it being too expensive from commentors - don't get popcorn or a drink. Problem solved. Just buy the tickets. It's no different than anything else. You have the options for extras. Do them, or don't. You have a choice.

I also loathe the comments from people that make it seem like their TV sets are better than a theater. I have an OLED set with 7.3.2 surround and a $3k receiver - yet I still prefer certain movies in IMAX or just theater.

Also a hell of a lot easier if friends all live in different areas. Find a theater in between everyone and problem solved. For my group of friends we happen to have a theater that's ~15-20 minutes from everyone. Kind of smack dab in the middle too.

I realize this is a rant based on things that you didn't do, but I was on a roll. At least in my head I was...
rollo tomassi profile picture
Something to consider (www.boxofficepro.com/...). This was the projection for trolls before CV. 90m was the projected domestic total run. The international theater run is usually around 1.5 to 2x the domestic total, bring a 90 day trolls theater total to 225m (using 1.5 multiple for international).
Studios generally get about 60% of the BO, so Universal would have banked about 135m profit from the theater releases, world wide. So universal didn’t make any more $ Sending troll to streaming. Now consider the extra $ trolls would have gone on to generate through the buy online for 19.99 after the theater run, then rent it for $5 after that?

People lose sight of the fact that universal didn’t earn more from trolls off of their online option. Also consider that kids trapped at home, parents working from home created the perfect one time environment for a steaming success.
Jamie Samans profile picture
There's a prevailing narrative among a certain set of groupthink analysts that regularly assures us that cinemas are outdated because people can watch movies at home. For those people, this decision on the part of AMC is sheer folly, but it's not clear why, because they already figured that theaters were going to collapse in any case; one should expect them to be cheerleading for this decision, to bring about their preferred endgame (presumably so they can sit on their couches more often, which I suppose they like very, very much).

This article is uncommon in that it highlights the likelihood of groups gathering in specific homes to watch PVOD movies for a single screening price, a practice that will result in far less revenue for a studio even if theirs is the only movie available and everyone wants to see it. Your analysis here gets into the dollars and cents of why that's such a big concern: even in this ideal case, Universal made no more money and probably less, and if it loses the cinemas altogether, it's likely to see less for every movie it produces.

The music industry fell victim to this, but it happened with them kicking and screaming. The movie industry seems poised to bring about its own ruin.
I think prices at the movies is what will end them. I mean 2 tickets are like 15-20 bucks if you want popcorn and a drink another 15-20 bucks and that's just for two people going family of 4 of course will cost even more. With those prices you can just wait and buy it.
Jamm Systems profile picture
Same argument times about 10x the cost applies for NBA and NFL. And yet...
Gundament profile picture
If the Kinohauses go under, I'll off myself.
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