Analysts Fear AMC/NBCUniversal Deal Will Hurt The Theater Industry


Is the movie theater industry in trouble?

We currently live in a world where things seem to change almost daily. Some places are deemed worthy of opening up while others are pressured to close down. Every city/county has its procedures on how to handle things. Which is then overseen by each state’s Governor. That has made it very difficult for a lot of companies in the entertainment business. In this case, the focus is the movie industry.

Studios have been forced to continuously push back their release date or move it to next year. Even if some cities open up, it doesn’t make sense to them to only feature films in certain places. It’s kind of an all or nothing type of deal. Some studios have decided to skip theaters all together with some of their films. Notably, kids films like Scoob and Trolls World Tour took their talents straight to VOD. This had angered theater owners, fearing a precedent that could but their business in jeopardy.


To make things worse, last week NBCUniversal and AMC made a groundbreaking deal for the industry. It allows the studio’s films to be made available as a PVOD (premium video on demand) seventeen days after it’s release in theaters. Traditionally the theatrical window is three months. While a shorter thirty-day window was expected, a deal for seventeen days was shocking.

“We expected a 30-day window, and were surprised to see AMC agree to only 17 days, which increases the risk many consumers will wait a few weekends to see films in home rather than going to the theater,” Credit Suisse analyst Meghan Durkin said in an interview with Yahoo! Finance.

The fear according to the article is that, if the current threat still looms in existence, people will end up training themselves to wait for the PVOD release and not attend theaters. Then, in the long run, more people will opt to watch non-blockbuster films at home. MoffettNathanson’s Michael Nathanson stated that “the number of screens in the U.S. [will] start to shrink as owners refocus on protecting their most profitable multiplex locations, which will hurt the overall exhibition industry.”


I think that seventeen days is too short of a window for theaters. I think it would be fair for theaters to be able to feature films for at least a month. Personally, if I am planning to see a film in a theater, I am going on opening weekend. If it’s a film that flew under the radar for me then maybe the second week but no later. I will say though that with rising ticket prices and concession prices, we do pick our movies out more carefully. It’s a lot less expensive to gather around the television than it is to go to the theater. Overall it just seems like PVOD was inevitable anyway, it’s just part of the future. That just means that it’s time to adapt and evolve.

Do you think shorter theatrical releases will hurt movie theaters? Let us know in the comment section below!

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Source: Yahoo! Finance

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