AMC Cinemas vs Universal Pictures - Future films banned after release of Trolls 2 on VOD?

ianh

ianh

ianh

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Hi All,

For a bit of backstory for those who don't know - In an effort to recoup some costs during the current COVID lockdown, Universal Pictures released Trolls 2: World Tour (a fairly insignificant film TBH) via a "Premium Video On Demand (PVOD) scheme to view at home as a 48hr rental for $20 and they seemed happy with the results, making approx $100M in 3 weeks just from home rentals which net them a higher percentage of the profit per view than Cinema releases. The Universal Pictures CEO subsequently mentions that, based on the success of this trial, he could see Universal doing simultaneous PVOD/Cinema releases in future.

https://deadline.com/2020/04/trolls-world-tour-vod-revenue-universal-coronavirus-1202919723/ - Initial story.

The CEO of AMC Cinemas, who own Odeon in the UK, has now taken great offence to the comments made by Universal Picture's CEO and has said AMC will no longer screen any Universal Pictures films post Lockdown and now Cineworld has also backed this by also claiming they will not screen "some" Universal Pictures films in future.

https://www.wired.com/story/amc-the...rsal-after-its-trolls-world-tour-vod-release/ - AMC CEO Responds.

To me this seems to come down to the age old problem of "New vs Old" business models where there is an unwillingness to change with the times. I think Cinemas still have a place in Entertainment but I think that they really need to modernise their business model. I think this current lockdown would be an ideal time for cinema chains to really re-evaluate what they want to be if they want to survive the next decade, maybe downsizing and only showing "big" films on just a few screens rather than showing "not really needed to see in a cinema" films spread over 12+ screens.

I mean while I think it's still best to see big "event" films like Avengers: End Game etc on the big screen, when it comes to much smaller films, such as Trolls 2, there is not such a "need" for it to be seen on the big screen in the same way, especially considering the overall cost/hassle of modern cinemas for a family to see a movie vs spend $20 to watch it at home, so I can see the PVOD market being much higher for this type of film.

Personally, I'd prefer to pay £15 ($20) to watch 95% of films on my TV at home on the day of their release and just leave "going to the cinema" for just a few special films a year, like Avengers for example.

In the end regardless of the cinema vs home debate, I wonder if it is a good financial idea for AMC Cinemas, who are already under immense financial stress, to block future Universal Pictures films from being shown post Lockdown as I would imagine that, even then, people won't be streaming back to cinemas for a while.
 
If films get routinely released on cinema and TV and many people starting watching them at home there won't be any cinemas left for the blockbusters to be shown in. You look at Marvel and Star Wars and the demand they created, well if the majority of the remaining cinemas closed that experience will be lost. I go to the cinema 6-10 times a year normally to see the bigger FX films because it is much better than at home I see some other films because I don't want to wait for home release. You remove the second category and cinemas are a thing of the past. I don't think the cinema chains are unreasonable in wanting to defend their business model.
 
Well its their film so their choice.

If cinemas want to play silly buggers then fine. Companies such as Universal Pictures can cut out the middle man and create their own Disney+/Netflix service with monthly subscription, put new releases straight to VOD. Then lets see how well AMC and Cineworld cinemas do when other companies follow suite.
 
It seems counterproductive for the cinemas to try and stop new releases going to VOD by refusing to show movies and thus forcing distributors to sell their films via VOD.
 
I was going to rent it till I saw the price, I acquired it elsewhere:D. I don't mind paying a few quid for a rental, but paying cinema prices to watch at home is a joke, they're just milking it.
 
@Stu999 & @theone8181 - Price wise I would suggest that they're basing $20 on the logical thought of "a family of 4 spend $50+ to go to the cinema, not including travel" which in comparison makes spending "only" $20 a very good fee for a family, even if it doesn't make as much sense as a sensible cost for a single person, but then again how many single people are watching Trolls 2 in the cinema?

@PlacidCasual - Re: Cinema's closing - Thats why I suggested Cinemas need to reduce everything (number of cinemas, screen numbers, amount of films shown at each one etc) if they want to survive. I can almost see them (in 10+ years time) becoming more of a niche "film enthusiast" type affair with only a limited selection of "big spectacle -summer event" films shown in a small amount of very high spec/class of cinemas which can charge a little extra for the experience (something that already happens now) while the rest of the everyday "film normies" families stream Trolls 3/4/5 (infact most comedies, horror, drama etc) type films etc on PVOD at home with only a rare visit the cinemas for these once/twice a year "big spectacle" level films where they don't mind paying $50+ again for those rare occasions. Thats all just guesswork though, it'll probably not happen and they'll die out in another 10 years knowing my luck :D
 
As much as I like the cinema, I think it was going to happen sooner or later anyway with VR becoming more popular.

Once 8K headsets are available then the quality would rival the cinema experience, and also win on convenience factor.

Film studios are bound to like the VR market as they can continue to charge individual ticket prices per pair of eyes/ears.
 
Without saying too much, and it's certainly not my part of the business but I am quite close to this argument and I did laugh out loud (and was shocked) at the original announcement from AMC banning Universal movies. But, it's a lot more complicated. It all comes down to posturing between cinema chains and studios and has been going on forever. This article is a good insight.

On the one hand you could say;
  • Cinema chains do nothing but leech 50% of ticket profit from studios. Without studios the cinemas would have no business model at all.
  • They insist studios have to wait 60/90 days after a theatrical release to bring a movie out on P/VOD or disc, meaning if a movie bombs at the box-office and is gone in 2 weeks, the studio has IP that they can't make any money on for another 2.5 months. This is crazy. It's their product to sell however the heck they want.
  • With Netflix, PVOD etc. actually going to the cinema is on it's way out.
  • Studios now all have their own PVOD systems (or deals), why not cut out the middle-man and get 100% of the profit.
But, on the other hand you have to remember;
  • Studios cannot make $1bn on a PVOD release. Absolutely no way. Trolls 2 was a perfect storm of families being confined at home (captive audience), the marketing had already started, there was no competition and yet still it barely made enough. Absolutely no way you could release a Jurassic or a Marvel blockbuster on PVOD and expect to make the same amount of money as a theatrical release, even accounting for the cinema chains 50% skim.
  • As soon as titles release on PVOD they are pirated in very good quality. Piracy has already increased massively since lockdowns began. If people get used to being able to get new titles on PVOD from opening day, they will also know they can get it illegally from exactly the same point in time (hey @theone8181 :rolleyes: ). This will massively hurt rental sales going forward.
  • PVOD seems to work in the US but not very well elsewhere. The pricing is very difficult to regionalise (is that a word?). If I go to the cinema I'll happily pay £18/ticket but I'd probably still balk at renting something for £20. It's just a mindset.
  • If the window is reduced too much then a lot of people would be willing to wait for the "next big blockbuster" to hit bluray/PVOD and watch at home. If you know it's coming 2 weeks after theatrical release, why not? This will really hurt the theatrical profits for both parties.
I think all that will happen from this is that there will be a better push to reduce the 60/90 day window. Studios should be able to release theatrical bombs as soon as they want.
 
I’d hate to see the end of the cinema, I’ve been frequenting them for around 50 years, as I still like seeing films on the big screen especially ones that the big screen does justice to.

I also like watching films in hdr on my OLED TV but no way would I spend the kind of money they put Trolls 2 out for. And as Scam said, piracy would be rife.
 
I'm probably in a minority who'd happily pay £20 for day 1 viewing of a big movie but not after the 3+ months down the line which more often than not seems to be what it takes for them hit digital here :|
 
I'd be quite happy to see PVOD releases concurrent with cinema releases and if that means a bunch of cinemas close then I don't care.

Large TVs and surround sound audio are pretty inexpensive these days. Plenty of people are getting into projectors etc... at home.

Unless it is something I'd really want to see at an IMAX then generally I'd be happier watching at home instead of a regular if the option were available upon release.

Basically exceptions for me are IMAX or perhaps date nights at an indy cinema... I don't care if most Odeons, Vue or Cineworld screens etc.. close down.
 
Scam said:
Without saying too much, and it's certainly not my part of the business but I am quite close to this argument and I did laugh out loud (and was shocked) at the original announcement from AMC banning Universal movies. But, it's a lot more complicated. It all comes down to posturing between cinema chains and studios and has been going on forever. This article is a good insight.

On the one hand you could say;
  • Cinema chains do nothing but leech 50% of ticket profit from studios. Without studios the cinemas would have no business model at all.
  • They insist studios have to wait 60/90 days after a theatrical release to bring a movie out on P/VOD or disc, meaning if a movie bombs at the box-office and is gone in 2 weeks, the studio has IP that they can't make any money on for another 2.5 months. This is crazy. It's their product to sell however the heck they want.
  • With Netflix, PVOD etc. actually going to the cinema is on it's way out.
  • Studios now all have their own PVOD systems (or deals), why not cut out the middle-man and get 100% of the profit.
But, on the other hand you have to remember;
  • Studios cannot make $1bn on a PVOD release. Absolutely no way. Trolls 2 was a perfect storm of families being confined at home (captive audience), the marketing had already started, there was no competition and yet still it barely made enough. Absolutely no way you could release a Jurassic or a Marvel blockbuster on PVOD and expect to make the same amount of money as a theatrical release, even accounting for the cinema chains 50% skim.
  • As soon as titles release on PVOD they are pirated in very good quality. Piracy has already increased massively since lockdowns began. If people get used to being able to get new titles on PVOD from opening day, they will also know they can get it illegally from exactly the same point in time (hey @theone8181 :rolleyes: ). This will massively hurt rental sales going forward.
  • PVOD seems to work in the US but not very well elsewhere. The pricing is very difficult to regionalise (is that a word?). If I go to the cinema I'll happily pay £18/ticket but I'd probably still balk at renting something for £20. It's just a mindset.
  • If the window is reduced too much then a lot of people would be willing to wait for the "next big blockbuster" to hit bluray/PVOD and watch at home. If you know it's coming 2 weeks after theatrical release, why not? This will really hurt the theatrical profits for both parties.
I think all that will happen from this is that there will be a better push to reduce the 60/90 day window. Studios should be able to release theatrical bombs as soon as they want.
Click to expand...
Where the hell are you living that 20 quid a ticket:eek: (I'm guessing down south). Around here cinemas can be a fiver each, so that's what takes the Mike, if cinemas take 50% then sure the film should be half as much for rental. And fwiw I pre-ordered the Blu-ray of the latest skywalker film rather than pirate it.
 
Curzon cinemas have already been through this. They release their films on curzon home cinema at the same time as actual cinemas. Because of this, their films are boycotted by all major cinema chains.. vue, odeon, cineworld.. even picturehouse. They want to have exclusivity to show the film and be the only source to see it for 3 months before a home theatre release. That "window" is something cinema chains are brutal about holding on to because without it, they will lose money. Trolls didn't do as well as Universal expected it to with a full cinema release and 3 months digital window.. but it did better than they thought when they removed the cinema release numbers. So it goes to show that they won't make as much money as a studio doing that release strategy, cinema chains wont earn as much money because they will lose customers.. but the consumer wins. Accessibility is up. Families will save money (£20 per digital download vs £50 for a family of 4 to go to the cinema). and realistically, it is the future.
 
Scam said:
If I go to the cinema I'll happily pay £18/ticket but I'd probably still balk at renting something for £20. It's just a mindset.
Click to expand...

The average UK cinema ticket price last year was £7.11 (call it £7 for cash) so for a family of 4 going to watch a movie it's already £30, then add snacks/drinks etc and you're upto £50. With that mindset a £16 rental looks way more attractive to at least 75% of current cinema goers but, as I mentioned above, its understandably a "high" cost to rent if you're a single viewer.
 
ianh said:
The average UK cinema ticket price last year was £7.11 (call it £7 for cash) so for a family of 4 going to watch a movie it's already £30, then add snacks/drinks etc and you're upto £50. With that mindset a £16 rental looks way more attractive to at least 75% of current cinema goers but, as I mentioned above, its understandably a "high" cost to rent if you're a single viewer.
Click to expand...

My local cinema is £5 a ticket or around £8-9 for upgraded seats, has been for 2-3 years.

This is a newish cinema built on a dead high street in a north eastern town, that said I know people who would rather stay in with the family and watch a movie on their nice big TV or projector given the chance. They literally only go to cinema releases because they don't want movies spoiled for them prior to the home release.
 
Actually just one thing - I've never rented a "PVOD" film - would they be full fat 4k/BluRay standard etc..? I know people are a little bit critical of Netflix 4k etc.. not being as good as blu ray etc..

Presumably if you're shelling out decent money for a single film then they can afford to pay for the bandwidth to give you the full fat release, not compress it down as much as Netflix etc.. ?
 
dowie said:
Actually just one thing - I've never rented a "PVOD" film - would they be full fat 4k/BluRay standard etc..? I know people are a little bit critical of Netflix 4k etc.. not being as good as blu ray etc..

Presumably if you're shelling out decent money for a single film then they can afford to pay for the bandwidth to give you the full fat release, not compress it down as much as Netflix etc.. ?
Click to expand...

It'd be difficult to achieve parity with disc based media - a UHD BluRay is going to be 50GB to 100GB depending on title. Even at 50GB, that's a good few hours for anyone not on fibre/cable and most streaming devices won't have the storage ability to hold most or all of a 50GB movie for anyone who can't stream that fast. Your typical Netflix 4K UHD film will be coming in at 5 to 10GB, depending on length etc. as a comparison, generally not requiring much local storage as most people's connections can keep up.
 
theone8181 said:
Where the hell are you living that 20 quid a ticket:eek: (I'm guessing down south). Around here cinemas can be a fiver each, so that's what takes the Mike, if cinemas take 50% then sure the film should be half as much for rental. And fwiw I pre-ordered the Blu-ray of the latest skywalker film rather than pirate it.
Click to expand...
Well yes, London innit. Yet Trolls is only £16 to rent so if you're a family of 3 it's exactly the same price as the cinema. Better even, minus the travel costs and snacks etc. Yet people still balk at it for some reason.

Studios can't win. Everyone says they'd be willing to pay for day and date releases at home yet as soon as it happens everyone is like "wah too expensive!!1"
 
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