Opinion: Universal, AMC, and The Essential Experience of Movie Theaters

Warning: This post contains piping-hot takes.

Once upon a time, there was a movie to be made from a book that was published only a year before. The director of that film bought the rights to the book almost immediately after learning of the concept. When the book was published, he bought up the entire first printing of the novel to prevent anyone from learning the ending of his yet-to-be-released film. He refused to share a script with the studio executives for fear they’d spoil it, demanded audiences not be admitted to the auditorium if the screening had already begun, and exhorted viewers to not spoil the ending.

The year was 1960. The man was Alfred Hitchcock, and the film was Psycho, one of the greatest and most influential movies to ever be made. The key ingredient – Hitch marketed the film to an extent that it was essential viewing to be experienced in the theater.

Much like seeing a live band play, filmmakers will say that movies are meant to be experienced on the big screen (when available). So many of the films I have deep admiration for I sadly wasn’t alive for – the original Star Wars was rereleased as the “Digitally Remastered Edition” in the mid-90s and on top of the stories my dad tells me, I still remember it to this day.

Some people may see my traditionalist view of theaters as dated or nostalgic, but I don’t think that’s necessarily true.

In 2019, my local theater hosted limited rereleases for movies like Alien, Saving Private Ryan, and 2001: A Space Odyssey, all of which I bought tickets for. I was born in 1993, so needless to say I was either too young or not even alive to witness those releases. The opportunity to witness them on the big screen was something I couldn’t pass up: The awe-inspiring force of the D-Day Invasion and the ground-rattling final tank sequence in SVP; the feeling of being trapped with the crew of the Nostromo, helpless in deep space while evading the Xenomorph of Alien; and the grandiose spectacle of 2001 that (at the time) was groundbreaking and inspiring. I don’t think I’d be alone in saying that experiencing those movies in theaters is anything short of prime, thrilling entertainment.

That being said, there’s definitely a place for streaming in this landscape – hell, Netflix gained 16 Million new subscribers in Q1 of 2020 according to its latest financial report, more than doubling their original estimates. That’s the effect of less than a full month of stay home orders. Granted, that’s not sustainable with production of new shows halted and the advent of so many new streaming platforms. More platforms for content means more opportunities for content creators to showcase, and I’m all for that, but it also comes with unintended consequences – the convenience of streaming makes a trip to the theater look like a chore.

People will show out in droves for the tentpole releases – tentpoles being the movies that will almost singlehandedly keep the studio in the green, like Star Wars or The Avengers, etc. The tolerance to see a movie that may not have the special effects, earth shattering sound, and otherworldly action dwindles with people who value the stay-at-home convenience of streaming services.

But it doesn’t stop there. I know people who value the comfort of streaming from their home, but said they couldn’t dedicate three continuous hours to watching The Irishman on Netflix. Sadly, these people probably the same people who will never get back the six hours they spent watching Tiger King in all of its schlocky, shock-value glory (yeah, you heard me, bring it on).

I get it… the cost of one movie ticket equates to a month subscription to a streamer, with unlimited viewing time and the ability to watch at your leisure. Tons of people would rather wait until it’s on demand to see it than make a night of it. And honestly, I have no issue with that, but there’s a larger symptom that is created with these options.

Unfortunately, what streaming has done to the moviegoing experience for many is make it a passive experience. Where a cell phone screen lighting up in a movie used to be sacrilegious, it’s now almost impossible to be at a screening and not see one. In 2018, my friend and I went to see Hereditary (for the 4th time) and as soon as the lights went down, a guy behind me answered a phone call… he audibly said “Hello?” as if he himself was still sitting on his couch in his underwear and this film was nothing more than background noise.

Okay, great, we get it… but where do we go from here?

With most people having been cooped up in their houses since mid-March, one has to wonder how much Netflix and Hulu and HBO is too much. At what point do people start to realize why they used to enjoy going to the theater and being suspended in disbelief for a few hours? Will they have scrolled through Instagram and Twitter and TikTok for so long that they’ll be looking for something else to do? A poll conducted by EDO, an analytics company helmed by Edward Norton, suggests that many people will return to the movie theater once they reopen…

EDO (via Deadline)

The lockdown in place due to covid-19 will be lifted and theaters will eventually reopen, that’s a fact. In all likelihood, audiences will be limited – every-other-seat protocols, hand sanitizer stations, mask requirements, you name it; but for an industry that currently sits at zero dollars in revenue, they don’t have much of a choice. And the other thing they don’t have much of a choice in is what they’re going to exhibit.

The Universal Pictures Conundrum

Before theaters started to close for good, studios started to delay the releases of many big-time films that they were worried would have significant box office impact if people were weary of being in public. Now, with a few films still holding on to their July/August release dates, theaters in markets that are set to reopen in May or June will be in need of content to fill their screens, and that’s where it gets interesting.

Universal broke the mold this year when, before any theater closures were official, they pulled Trolls World Tour and released it on Video On Demand (VOD). At the time, it was a bit of a head scratcher, but once the theaters started being forced to close, everyone looked the other way. To Universal’s surprise, Trolls has done quite well compared to their estimates on VOD. It’s tracking toward $100M+ and has given the powers-that-be some ideas about how to effectively use this platform.

Universal decided (in their infinite wisdom) that due to the success of Trolls World Tour on VOD, they will look toward releasing their films simultaneously on VOD and in theaters. This outraged AMC theaters, the world’s largest theater chain, to say the least. They see it as a direct attack on the good-faith arrangement that studios and theaters have been abiding by for decades: the 90 day theatrical window. With that, AMC Entertainment took a hardline stance – we will no longer exhibit Universal titles (this includes franchises such as James Bond, Jurassic World, Fast and Furious, etc.).

Studios have been mulling around with shortening the theatrical window for a long time. The standard window is 90 days of exclusive theatrical release, and on day 91 studios can release it on VOD platforms as they wish. Studios believe that by cutting the theatrical window by, in some cases, weeks, they will be saving more on the marketing costs of theatrical movies and cashing in on VOD buyers, capitalizing on bang-for-their-buck. Conversely, theater owners believe that a shortened theatrical window will discourage people from making the trip out to see the movie in theaters, knowing that in only a short while they can watch it in their living room. The debate really leans toward which camp you support – some people believe that if theaters banned together and decided not to showcase movies from studios that go against the 90 day window, they will most likely be successful with the studios poised to lose millions. On the other hand, some people think the studios, being the shepherds of content, have the power, and theaters will hemorrhage millions faster than they can wave their torch in an already-declining exhibition market.

AMC Entertainment and its subsidiaries have made a not-so-veiled threat to Universal Pictures and any other studio considering bypassing the standard theatrical window. “This radical change by Unicersal to the business model that currently exists between our two companies represents nothing but downside for us and is categorically unacceptable to AMC Entertainment,” AMC CEO Adam Aron wrote to the studio Tuesday. “Accordingly, we want to be absolutely clear, so that there is no ambiguity of any kind. AMC believes that with this proposed action to go to the home and theaters simultaneously, Universal is breaking the business model and dealings between our two companies.”

(via Indiewire)

Aron said also that the theater chain would institute a ban of any studios’ movies if they were “contemplating a wholesale change to the status quo.” Cineworld, which owns Regal Entertainment, took a less line-in-the-sand approach when they said they’d bar any titles that looked to disrupt the way movies traditionally are shown in theaters. They stopped short of wholly banning Universal titles.

I personally side with the theaters, and I see it for two reasons:

First, Universal is being shortsighted. Theaters were closed everywhere and so were schools. Parents were stuck working at home with kids who were in all likelihood running amok when they weren’t actively engaged with remote-schoolwork or one of a dozen short-lived daily activities. Parents could have seen buying Trolls World Tour on demand as an opportunity to give kids a fresh batch of entertainment to hold them over.

Secondly, Universal’s decision is once again at the expense of theater owners and exhibitors. In the early 2000s, theaters everywhere were declaring bankruptcy because studios were leaning more heavily on making their movies “Opening Weekend Hits,” pushing them to over 4,000 screens on opening day and doing anything they could to maximize viewing. On top of that, they strong-armed the theaters into surrendering (sometimes as high as) 90% of the opening weekend box office to the studio. If you’ve ever wondered why the price of popcorn and candy is so high, this was the precedent that was set, not by theaters, but by studios. After studios realized the folly of their ways, they started dialing back, and now 50-60% of the domestic box office is allocated to the studio.

Universal would be double-dipping on theatrical revenue and VOD revenue. Theaters, in all likelihood, would lose those casual theatergoers that I referenced earlier, always keen on “waiting until it’s on demand.” They’d be effectively boxing out an entire industry at a time when these same theaters were forced into becoming one of the only zero-revenue industries on the planet. In my eyes, Universal is missing the pitch when it comes to balancing theaters and VOD, and being extravagantly shortsighted if they think that a return to somewhat-normalcy will continue to net them hundreds of millions on VOD for every movie they have.

Studios who are desperate to get butts in seats and eyes on their recently delayed productions have massive libraries of bulletproof throwback titles that will undoubtedly be the bridge to returning the state of theater exhibition to it’s previous glory. Some smaller theaters have discussed bringing that model back, but only when they can identify a line of sight on studio pictures holding to their release dates – they don’t want to open up for business in the name of nostalgia when the studios may be withholding their bread and butter pictures for longer than mandated. But seriously… who wouldn’t want to go back and watch the original Star Wars in theaters? Who wouldn’t want to watch a Tarantino marathon, or catch a Jurassic Park or Jaws showing to experience that visceral feeling of being transported to those thrilling worlds? And rest assured to the families out there who usually look back on a $100 theater receipt, all preliminary reports point to those tickets being at discounted price.

Movies have brought people together like very few other experiences can. They transport you to worlds far from our own, deliver us fresh stories and characters with whom we feel personal stakes, and they can change the way generations to come look at life as a whole. Movie theaters and drive-ins have been a staple of the American and worldwide way of entertainment consumption for decades, and there’s no reason for it to suddenly go out of vogue. The wise Uncle Ben of Spider-Man once said, “With great power comes great responsibility.” I believe in this day and age, that great power is the availability of endless platforms with which to consume content, wielded by the movie studios - and I think the great responsibility that comes with it is realizing that the introduction of these new platforms do not have to come at the expense of a timeless, irreplaceable one.

We’ve got nearly an entire Spring and Summer release calendar to be spread out over the normal awards season releases from October to December, and leaking into next year. It’s no secret that streaming has crashed the party and made a lot of friends, but my hope is that people start to look at theater viewing the way people did before cellphones, before social media, and before streaming: an immersive experience like no other.