A brief history of the spat between Universal and theaters


Universal Pictures, the studio behind the popular Fast & Furious series, has been making a lot of headlines lately. Its movies were recently banned by both AMC and Regal, the two largest theater chains in the US, even though at least one of those theater companies is currently facing some financial problems. But what exactly led to their seemingly harsh decisions? To answer that, we’ll need to take some steps back.

When the coronavirus initially hit and movie theaters were forced to shutdown, movie studios were left in a place of uncertainty. This led to most of the films slated for release being pushed back, some of them as far back as a whole year. This also led to several studios experimenting with distribution for their films on digital platforms, namely through streaming and video-on-demand (VOD).

One of those films was Trolls World Tour by Universal Pictures, the sequel to the 2016 animated film, Trolls. Originally slated to be released in theaters on the 10th of April, Universal decided to opt for a day-and-date release instead, in which the movie is also made available on VOD. This was despite the fact that theaters were closed at the time, which more or less meant they were effectively forgoing a theatrical release.

The movie theaters were not happy with that decision of course, mainly because Universal hadn’t consulted them before making the announcement, and in response, the National Association of Theater Owners (NATO) had penned a letter stating it would “not forget” Universal’s decision.

Historically, movie theaters have always enjoyed something called the theatrical window. This is the period of time during which the movies they show are only available in theaters. It typically lasts around 3 to 4 months, after which those films are subsequently released on other platforms like DVD/Blu-Ray, streaming and VOD.

So Trolls World Tour had been released while theaters were closed, and in just three weeks on VOD, the movie had made over $95 million. This translates to about $77 million, after the various VOD platforms have received their cut. Universal was quick to point out how this was more money than the original Trolls movie had made during its 5-month theatrical run.

Keep in mind though that the $77 million it made does not account for any of the marketing cost already incurred in promoting the film before theaters were shutdown, or the fact that those numbers were helped by families being currently stuck at home with limited entertainment options.

But all things considered, it is still an impressive number, and one that points to VOD maybe someday being a viable alternative to theatrical releases, even though I still feel movie theaters would forever have a place in the entertainment landscape.

As part of its statement earlier in the week, Universal had said that in the wake of the perceived success of Trolls World Tour on VOD, the studio would be willing to explore more day-and-date releases for future films. It also announced that its upcoming Judd Apatow-directed comedy, The King of Staten Island, would be forgoing a theatrical release and going straight to VOD on the 12th of June.

It was a combination of that statement, and the circumstances surrounding it, that led AMC and Regal to announce their decisions to no longer show any films by Universal Pictures. This decision would no doubt impact the forthcoming release of F9 (Fast & Furious 9), a movie that was originally slated to come out next month but was pushed to April 2, 2021.

To put things into context, the last Fast & Furious movie had made $1.2 billion globally in movie theaters, while the one before that made $1.5 billion. Those are numbers that would be impossible to replicate on VOD, especially after the lockdowns lift and more entertainment options become available.

That said, it is also in the theater owners’ best interests to have such huge tentpole releases showing on their screens, since they attract a lot of people to their theaters, and they still receive a cut of some of its revenue. But ultimately, it is we the film fans who would be losing out on the experience of getting to see the next Fast & Furious on the big screen. So here’s hoping that both parties eventually kiss and make up before then.

What do you think about the movie theaters deciding to no longer show any movies produced by Universal? Can a movie like Fast & Furious 9 ever hope to turn any kind of a profit exclusively on VOD platforms? Let us know in the comments section below.