AMC Theatres is refusing to play Universal films following the studio's decision to move Trolls World Tour to VOD and later comments made by NBCUniversal CEO Jeff Shell.
The news comes just hours after Universal announced that the sequel grossed nearly $100 million in VOD rentals over its first three weeks, generating $77 million in revenue for the studio. The first Trolls film grossed $153.7 million domestically. While the domestic gross may end up nearly the same for both films a month or so from now, Universal keeps significantly more of the profits from VOD than it does from theatrical releases, seemingly making World Tour much more profitable than Trolls.
"[The film] exceeded our expectations and proved the viability of [premium video on demand]," Shell told The Wall Street Journal. "As soon as theaters reopen, we expect to release movies on both formats."
According to The Hollywood Reporter, AMC Theatres chair-CEO Adam Aron sent a strongly worded letter to Shell on Tuesday evening following the Universal executive's comments.
"It is disappointing to us, but Jeff’s comments as to Universal’s unilateral actions and intentions have left us with no choice. Therefore, effectively immediately AMC will no longer play any Universal movies in any of our theatres in the United States, Europe or the Middle East," Aron said in the letter.
"This policy affects any and all Universal movies per se, goes into effect today and as our theatres reopen, and is not some hollow or ill-considered threat. Incidentally, this policy is not aimed solely at Universal out of pique or to be punitive in any way, it also extends to any movie maker who unilaterally abandons current windowing practices absent good faith negotiations between us, so that they as distributor and we as exhibitor both benefit and neither are hurt from such changes. Currently, with the press comment today, Universal is the only studio contemplating a wholesale change to the status quo. Hence, this immediate communication in response."
The letter made clear that Universal received the ban, not for releasing Trolls World Tour on VOD, but for contemplating releasing more films in the same format once the coronavirus crisis ends. This is why Disney, which plans to release Artemis Fowl on Disney+ in June, was not penalized and why the decision by AMC was only made after Shell's comments.
Universal is the distributor of several successful franchises, including Fast and Furious, James Bond, Despicable Me and Jurassic Park.
