AMC’s new agreement with Universal pictures could be the first of many agreements between the largest film distribution company in the world and major movie studios. A new agreement will allow AMC theaters to share in the profits of movies that are streamed during a film’s run on the big screen. But is securing this deal with Universal AMC did more than end a standoff? It may have ended future ones before they began. AMC may have established how the future of film distribution will work and how movie theaters will survive it. Revenue sharing.
How things could go in the future
When AMC first announced that it would not cary Universal forms in the wake of the rise of PVOD (Premium Video On Demand) other companies like Regal followed suit. But there has yet to be a similar deal worked out between Regal and Universal. Could it be because Regal already has an active program that could allow it to sell tickets to the movies and keep up with the amount made from said sales? This is only speculation but if we are to believe that AMC will be sharing in the gross of movies watched online instead of in theaters it would only be logical that those movies be funneled through its own app.
The Early Bird Get’s The Worm
Netflix is not the top streaming service simply because of its mix of TV shows, movies and and other content. It is the biggest service in the world because it was first. It built a reputation early as the place to see older favorites commercial free and had distribution contracts with partners that gave it access to content from major studios like Disney, Marvel, Legendary and many others. It also had a massive TV show library, even before it began to develop its own programming. Why? Because when it launched it did not have to compete with Blu, or Amazon Or Tubi for that matter. It was THE place for streaming. That placement allowed Netflix to work its way into the culture so securely that services that don’t even offer movies and TV shows are compared to Netflix in the same way someone might call the Consumer Electronics Show “The Super Bowl of Tech”.
Everyone wants to be the Netflix of what ever they specialize in. To this effect even though lots of other services have arisen and taken their place in the market Netflix still has well over 100 Million users. AMC could be working behind the scenes on something along those lines. Imagine the power on the marketplace it would have if it works out exclusive deals with a number of studios like Disney and its subsidiaries, Legendary Pictures and others. AMC already pioneered the brand specific subscription movie model with AMC Stubbs A-List, building off of the popularity of the not so dearly departed Movie Pass. If it is looking with both eyes open it is probably looking at how to leverage that program with the on-demand app.
AMC will not be selling tickets to the next big Marvel movie to watch it online. That would be a lot of unsold popcorn and soda. And the studious are not likely to see that as a viable option for movies that have potential to bring in a billion dollars on the big screen. At the moment Universal says that mid-budget movies could be available to stream at home but that tentpole content would stay within the traditional theaters. But if AMC is able to work out contracts with other studios along the lines of what it has with Universal it could end up being in position to make a major move in the physical theater space. If the company read the tealeaves before the rest of the space it could secure its future and make billions from people not walking through the door. And if other companies are left out of such deals they could end up as subsidiaries of AMC.
Was AMC’s strategy a bait and switch to throw off the competition? If it was it was brilliant. Get the entire industry angry and defiant with Universal while feverishly working out a deal that will benefit them now and in the future. Because we can be sure that more movies being shown at home is the future. While the average person might not appreciate going to the movies to see a romantic comedy and consider a home viewing for $20.00 perfectly acceptable for a date night, they might only see action spectacles on the big screen. At least the first time they take it in. The major franchises will probably always be popular in that venue. If it plays the game right AMC may turn out ironically to be the “Netflix of the movie theater world”.