Cinemark, Universal Usher in More Change to Movie-Theater Distribution
November 16 2020 - 06:46PM
Dow Jones News
By R.T. Watson
Comcast Corp.'s Universal Pictures has found another key partner
willing to shrink the amount of time new movies play in theaters
before moving to home video.
The Hollywood studio and America's third-largest cinema chain,
Cinemark Holdings Inc., announced on Monday a deal under which
Universal titles can be shipped online after just three weekends,
or 17 days, in theaters. The nation's largest theater chain, AMC
Entertainment Holdings Inc., agreed to a similar deal with
Universal in July.
Traditionally, moviegoers were forced to wait about 2 1/2 months
from a film's theatrical debut before they could then watch it at
home. Under the new paradigm that Universal is pushing, viewers
will, in some cases, be able to watch new movies in their living
rooms or on their devices just 2 1/2 weeks after they premiere in
theaters.
Amid the Covid-19 pandemic, which has closed theaters and
performance venues around the country, cinemas have been scrambling
to find ways to make money while most viewers stay home. By
completing a multiyear deal with Universal, Cinemark, like AMC, has
acquiesced to what is shaping up to be a historic shift that could
forever alter the film-distribution landscape. Even though most
films and theaters earn the bulk of box-office revenue in the first
few weeks, theater chains have for years been fiercely resistant to
reducing their window of exclusivity.
"We were talking about flexible windows since prior to Covid
with multiple studios," said Cinemark CEO Mark Zoradi, who added
that Universal's commitment to keep better-performing films in
theaters longer than 2 1/2 weeks was key to getting the deal done.
"We're in the business of trying to maximize the box-office
potential."
Under the Cinemark-Universal deal, movies that gross more than
$50 million domestically during their first weekend in theaters
will continue to be shown in theaters exclusively for five
weekends, or 31 days. After that, while theaters can continue to
screen a film, the title will concurrently be available on premium
online video-rental platforms like Apple TV and Amazon's
website.
Universal is offering the same terms for films grossing more
than $50 million to AMC, according to a person familiar with the
matter. Like AMC, Cinemark will share in the digital-rental
revenue, the person said.
In addition to monthslong cinema closures and weak attendance,
the theater industry is reeling because Hollywood has largely
canceled plans to release its higher-profile movies, the brand of
content theaters rely on to sell tickets. Meanwhile, theaters have
been trying to survive by showing older films like Walt Disney
Co.'s "Hocus Pocus" or one of the many smaller independent
titles.
AT&T Inc.'s Warner Bros. tried to resuscitate the theatrical
industry in September when it released its $200 million spy
thriller "Tenet." While the film has done decent business abroad,
in the U.S. and Canada the movie, by top-flight director
Christopher Nolan, has grossed a mere $56.3 million. Theaters are
anxiously awaiting to see what Warner will decide to do with its
highly anticipated "Wonder Woman 1984" sequel, which also cost
about $200 million to produce and is currently slated to premiere
Christmas Day.
Universal is providing a bit of a lifeline to struggling
theaters as the studio boasts the highest number of movies slated
to debut between now and the end of the year. But many of
Universal's titles are smaller-scale films that may not achieve
blockbuster status, especially considering that business
restrictions are once again cropping up around the country amid
increasing cases of Covid-19.
Cinemark had already temporarily agreed to Universal's terms so
that it could screen recent and coming releases like "Freaky,"
starring Vince Vaughn, which opened last weekend, and animated
sequel "The Croods: A New Age," which debuts Nov. 25. Universal,
including through its specialty label, Focus Features, has a total
of five movies scheduled to debut by the end of the year.
While about 90% of Cinemark's U.S. theaters are currently open,
those in major metropolitan markets, including Los Angeles and New
York City, are closed. As of late last month, only 49% of all
theaters in North America were open, according to media-measurement
company Comscore.
Write to R.T. Watson at rt.watson@wsj.com
(END) Dow Jones Newswires
November 16, 2020 18:31 ET (23:31 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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