AMC Theaters CEO Adam Aron remains as fiercely optimistic as ever that brighter days are ahead for his theater chain and the box office as a whole. But he thinks they’d be even brighter if Hollywood’s studios got back to a longer, industry-wide exclusivity window.
In AMC’s latest earnings call on Thursday, Aron stressed, as he has in past calls, that his company does not need the box office to return to pre-pandemic levels for it to once again turn a consistent profit. He pointed to increased per patron spending despite a steep drop in admissions as proof that if studios significantly increase their theatrical film output, AMC will be able to draw in a wider swath of moviegoers who have shown they are more willing to spend more on premium screens and concessions when the movies they are interested in are on the marquee.
But while Aron is confident that theatrical output will soon increase, he warns that will be undercut if studios continue to put their movies on premium on-demand and/or streaming faster than they did before the pandemic, undercutting moviegoing demand.
“It’s not all because of windows, but if you look at our industry’s attendance, it is still approximately 38% below pre-pandemic levels. That has stressed the EBITDA, profitability and share price of theaters,” Aron said.
For years, theaters fiercely defended the exclusivity window, which prior to the pandemic generally sat at 75-90 days. But the year-long theatrical shutdown caused by the pandemic gave studios the urgency and the leverage to break through that resistance, starting with Universal’s historic decision to release “Trolls World Tour” as a premium on-demand offering during the early weeks of the pandemic.
In response to that move, Aron threatened to block all future Universal films from being screened at AMC locations, prompting discussions between the studio and the chain. The result of those talks was a landmark agreement that was later agreed to by other major chains like Cinemark and Regal that allowed Universal and its specialty sister distributor, Focus Features, to release films on PVOD as early as 17 days after theatrical release, or 31 days if the film earned a domestic opening weekend greater than $50 million.
While Aron did not mention Universal or any other studio by name during the earnings call, he did say he believes it is time for that era of shorter windows to end. He said that talks around the theatrical window are a “conversation that we are having live” with studio execs, pushing the long-maintained argument made by exhibitors that longer theatrical windows lead to greater profits on home platforms.
“In our view, 17 days and 31 days are too short, and we’d like to convince all our studios that we’d like to keep their films in theaters longer,” he said. “I have had talks in recent weeks with one studio executive who said the 45-day window needs to be reestablished as sacrosanct. We were talking with another studio executive who proudly said they keep their films in theaters for 60 days. Watch this space. We will continue to see what we can do to get the industry to be firm around this 45-day number.”
In a post-COVID landscape further destabilized by the recent industry strikes and stock market slide for media companies, several major studios have had to balance the need to maintain their box office grosses with the need to support streaming services that Wall Street is demanding profitability from after years of freewheeling spending and production greenlights. With significant cutbacks to new streaming programming, releasing theatrical films faster onto streaming services is one way some studios are trying to increase and maintain subscriber counts.
But with each major studio in a different financial situation both overall and with regards to their streaming investments, wildly different approaches to theatrical windows have been seen. The studio closest in alignment to what Aron and other exhibitors want is Disney, which quietly implemented a minimum 100-day window for all of its theatrical releases with no advance advertising of their release on Disney+.
On the flipside are studios like Warner Bros., which recently released its critically acclaimed but commercially underperforming horror film “Companion” on premium on-demand after just three weekends in theaters.
Universal has also maintained wide flexibility on windowing as a key part of their business model. The studio gave its Best Picture Oscar-winning hit film “Oppenheimer” a four-month window as part of a deal with director Christopher Nolan. It also set a 40-day theatrical window for its recent Oscar contender “Wicked” before releasing it on PVOD at the end of 2024 and will not make the film available to stream on Peacock until March 21, four months after its release date.
At the same time, Universal has exercised the 17-day window mark on multiple films that perform modestly or poorly at the box office, and even some that have legged out like the hit DreamWorks film “The Wild Robot,” which hit PVOD 18 days after theatrical release. Despite this, the film grossed another $56.2 million domestically after the PVOD release for a $143.9 million domestic total, a result that Universal has championed as an example of its business model catering to a wide spectrum of movie viewing preferences.
“We’re meeting the consumer where they are and with a lot of flexibility, giving them different ways to engage with our content,” NBCUniversal Chairman Donna Langley said at the UCLA Entertainment Law Symposium last summer.
But the debate over the theatrical window has even permeated Hollywood’s awards season, as “Anora” director Sean Baker called for it to be restored to 90 days during his acceptance speech at the DGA Awards earlier this month.
“Let’s do whatever we can do for us feature filmmakers to expand that theatrical window again; demand it. Let’s get it back to what it used to be,” he said.
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