[caption id=“attachment_29206” align=“aligncenter” width=“600”] Photo by Krists Luhaers on Unsplash[/caption]

Well, this sure is fun. In case you’re wondering how the moviegoing experience is doing in terms of surviving the pandemic, if this is any indication, things are great.

It all started with a Wall Street Journal article, where Universal Pictures spoke of the massive success of going direct to VOD with the release of Trolls World Tour:

A massive marketing campaign was already under way for the studio’s April 10 release, “Trolls World Tour," an animated sequel to the 2016 hit. The studio decided not to postpone the opening, instead making the movie available as a digital rental on platforms like Apple Inc.’s Apple TV for $19.99.

Three weeks later, “Trolls World Tour" has racked up nearly $100 million in rentals.

With nearly five million rentals in the U.S. and Canada, the digital release has in three weeks generated more revenue for Universal than the original “Trolls" did during its five-month domestic theatrical run, according to a person familiar with the matter. Its performance has convinced Universal executives that digital releases can be a winning strategy, and may diminish the role of theaters even after the pandemic passes.

Yeah, that’s pretty shocking, all things considered.

Personally, I figured with the $20 rental fee (when digital movies are typically $20 to purchase themselves), more purchasers would be pushed away from the rental. Instead, it went well. Really well. So well, in fact…

Universal has made more than $77 million in revenue from “Trolls World Tour" domestic customers so far. That means “Trolls World Tour" has generated about $95 million in rental fees from nearly five million customers since its release, based on revenue figures cited by the person familiar with the matter, who didn’t dispute the estimate.

The same amount of revenue during a theatrical run would have required a box-office gross of $154 million, or about the final tally of the original “Trolls" movie. The sequel cost about $90 million to produce. The original “Trolls" collected $153.7 million at the domestic box office. Universal received about $77 million of that total; about half stayed with theaters.

Understandably, this made the head of Universal Pictures, Jeff Shell, say the following:

“The results for Trolls World Tour’ have exceeded our expectations and demonstrated the viability of PVOD," Mr. Shell said. “As soon as theaters reopen, we expect to release movies on both formats."

I mean, this was inevitable, right? At some point, the nickel-and-diming of the theatrical experience, and the lack of love for the exhibition of film itself, was going to lead to audiences completely ignoring the theatrical format.

Of course, you had to know, the theaters were going to respond.

AND LO THEY DID, with AMC Theatres head Adam Aron going nuclear in an open letter published by Deadline, among other outlets.

Here’s the highlights:

For much of the past four and a half years, I have been in direct dialogue with Jeff Shell and Peter Levinsohn of Universal about the importance of a robust theatrical window to the viability of the motion picture exhibition industry. Throughout that time, AMC has expressed a willingness to consider alternatives to the current windowing strategy common in our industry, where the aim of such alternatives is to improve both studio profitability and theater operator profitability.

Universal stated it only pursued a direct-to-home entertainment release for “Trolls World Tour" because theaters were closed and Universal was committed to a lucrative toy licensing deal. We had our doubts that this was wholly Universal’s motivations, as it has been a longstanding desire by Universal to go to the home day and date. Nonetheless, we accepted this action as an exception to our longstanding business practices in these unprecedented times.

And here’s the kicker:

Going forward, AMC will not license any Universal movies in any of our 1,000 theatres globally on these terms.

Accordingly, we want to be absolutely clear, so that there is no ambiguity of any kind. AMC believes that with this proposed action to go to the home and theatres simultaneously, Universal is breaking the business model and dealings between our two companies. It assumes that we will meekly accept a reshaped view of how studios and exhibitors should interact, with zero concern on Universal’s part as to how its actions affect us. It also presumes that Universal in fact can have its cake and eat it too, that Universal film product can be released to the home and theatres at the same time, without modification to the current economic arrangements between us.

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. 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.

Yep. No Universal Pictures movies in any of AMC’s theatres, the biggest chain in the world. No Fast 9. No Jurassic World 3. No Minions 2.

But isn’t this cutting off your nose to spite your face? You’re literally grandstanding in public to say “I know we’re going to need massive movies to make our business work post-pandemic, but the studio with some of the biggest films can fuck off.“

I can easily tell you that if this were Disney, AMC would just roll over. (Wouldn’t be the first time.) With this being Universal, they’re making this bold move.

Now, I’m not fighting for either side here in saying they’re “right".

Massive movies with massive budgets need as many people to see them as possible. Theaters are - currently - the best way to do this.

Theaters need movies to show, otherwise, they’ve got nothing.

But in the center is the populace, a group who has been pushed away from theaters by ever increasing pricing for tickets, a regular lowering of the bar of the quality of their experience (between both crummy displays of films, and theaters filled with phone users, texters, and talkers, an experience which AMC almost pushed as an alternative theatrical option, less we forget), and the increase of quality/lowering of price for a home theater experience.

The movie theater should be a premium experience, one which you feel great paying for. There are chains which promote this accordingly (looking at you, Drafthouse and Arclight), and great independent theaters which push the quality just the same (hello Baltimore’s own Senator and Charles Theatre), but for many movie-goers, the options are crap, and not worth the money, time and effort.

You reap what you sow, gang. And this is just another example of how the rapid change of the world thanks to this pandemic is expediting an already existing issue.

Yes, Universal Pictures issued a statement last night which backed things up, a little bit:

Our desire has always been to efficiently deliver entertainment to as wide an audience as possible. We absolutely believe in the theatrical experience and have made no statement to the contrary. As we stated earlier, going forward, we expect to release future films directly to theatres, as well as on PVOD when that distribution outlet makes sense. We look forward to having additional private conversations with our exhibition partners but are disappointed by this seemingly coordinated attempt from AMC and NATO to confuse our position and our actions

But the fact is, at the same time:

1. Universal already has announced plans for another movie, the Judd Apatow-directed, Pete Davidson-starring comedy The King of Staten Island to go straight to VOD.
2. The Oscars has announced that for “(t)his season, and until further notice, films can qualify for the competition without screening for at least one week in a Los Angeles-area theater, the long-standing barrier for entry; after all, all movie theaters in L.A. and most of the country remain shuttered indefinitely." Yep, streaming-only movies now count for Oscars.

The change is already here, folks. The VOD future is the VOD today. The question now is: how will you make going to the movie theater worth it?

Updated, April 30, 2020: Regal Cinemas has joined the fray, so I’ve revised the title from Universal Pictures Sees Success Going Straight to VOD, AMC Theaters Gets Mad, Public Pissing Contest Ensues to Universal Pictures Sees Success Going Straight to VOD, Theaters Get Mad, Public Pissing Contest Ensues. The points still stand.