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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