Universal Ups Year-End Theatrical Slate; Studying Release-Window Data

Universal Pictures is doubling the number of movies it plans to release in theaters before the end of the year. The studio made waves earlier this year putting erstwhile theatrical release Trolls World Tour into homes via premium VOD in April. That was followed by a 17-day theatrical window/revenue-sharing PVOD agreement with AMC Theatres — Universal’s way of throwing the ailing exhibitor business a lifeline.

While the studio, like most majors, has pushed back numerous tentpole titles to 2021, including most-recently the next Fast and Furious installment, F9, to Memorial Day 2021, Universal will release at least seven movies at the box office through the end of the year — more than any other major studio.

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Upcoming theatrical releases include Let Him Go (Nov. 6),  Freaky (Nov. 13), The Croods: A New Age (Nov. 25), All My Life, Half Brothers (Dec. 4), and News of the World, Promising Young Woman (Dec. 25). Freaky and The Croods will also be available on PVOD 21 days and 28 days, respectively, after their box office debut.

“They need us; we need them,” Donna Langley, chairman Universal Filmed Entertainment Group, remarked about exhibitors in a media statement. “Everyone is looking for solutions during the pandemic for the short term and long term.”

Studio Bosses ‘Rooting’ For Theatrical Turnaround

With the nation’s movie exhibitors either shut down and or hamstrung by COVID-19 safety protocols, the industry is eyeing fiscal ruin as studios push back major releases until next year and wary moviegoers stay home.

Speaking Oct. 15 on a virtual panel at the 2020 Milken Global Conference, Donna Langley, chairman of Universal Filmed Entertainment Group, and Ann Sarnoff, CEO of WarnerMedia Studios and Networks Group, were asked if the studios would consider acquiring financially distressed theaters after a federal court in August struck down the 1948 Paramount Decrees abolishing studio ownership of movie theaters.

“We have no plans to do that currently,” Langley said, sharing a sentiment echoed by Sarnoff. “We have no plans either,” she said.

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The executives’ unanimous responses underscore just how far exhibitors such as AMC Theatres and Regal Cinemas have fallen. It was just a year ago that the theater industry generated $11 billion in revenue — a tally that is projected to plunge 80% in 2020. Now, Regal has re-shuttered all North American and U.K. screens indefinitely, and AMC Theatres parent, AMC Entertainment, announced it would run out of cash by the end of the year without more borrowing.

“I’m kind of an armchair sociologist and I believe people want to have communal experiences and especially with certain genres,” Sarnoff said in a nod to select tentpole titles such as Wonder Woman 1984, which is still slated to release in theaters on Christmas Day — and multiple delays.

“We’re big fans of the exhibitors,” Sarnoff said. “They’ve been good partners of ours for many decades. We’re rooting for them. I know it’s tough sledding right now. I’m hoping they come out on the other side, probably even stronger.”

Langley said Universal also remains committed to theaters despite Universal Pictures more proactively embracing premium VOD and transactional VOD than any other studio. Indeed, Universal this summer succeeded in getting AMC Theatres to agree to a 17-day theatrical window in exchange for sharing PVOD revenue.

“It took Covid-19 to demonstrate that it is not cannibalistic but it is, in fact, additive,” Langley said of PVOD. “It will enable us to continue to make movies and put them in theaters.”

Sarnoff said Warner Bros. has grappled with the concept of early release PVOD and digital retail, saying that doing so might seem an easy option, when in reality it is messing with tradition.

“It’s not so easy as it’s happening, because oftentimes these are new moves that you’re making so you have to think about all of the constituents,” Sarnoff said. “You have to think about your fans and what they want, and predict what the results are going to be without any market data.”

 

Universal Ups Shortened Theatrical Window Slate

Universal Pictures is reportedly set to release the low-budget horror movie Freaky and the sequel The Croods: A New Age on premium VOD less than 30 days after their theatrical bow.

Freaky, the Happy Death Day spinoff starring Vince Vaughn, will debut in theaters Nov. 13, followed by a PVOD release 21 days later. The Croods hits theaters Dec. 4, and will be available for home viewing on PVOD 28 days later. Universal and AMC Theatres share in the PVOD revenue.

Universal and AMC made headlines earlier this year when they agreed to cut the theatrical window to 17 days (with a minimum of three weekends) for select new studio releases that are slated for PVOD release subsequent to their theatrical openings.

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Universal revived PVOD earlier this year after theaters were shuttered in mid-March due to the COVID-19 pandemic. A month later the studio claimed the animated DreamWorks theatrical release Trolls World Tour had generated $100 million in PVOD revenue. That revelation led other studios, including box office stalwart Disney, to try PVOD. Disney on Sept. 4 made actioner Mulan available exclusively to Disney+ at a $29.99 purchase price.

AMC, which had long fought against PVOD and shortening the theatrical window, changed its mind over the summer as the bulk of its screens remained shuttered due to the coronavirus pandemic. Now the chain says it will run out of cash despite operating 86% of its domestic screens, albeit with reduced seating capacities.

“There’s no question that theatrical will some day [again] be a central element to our business and film business, it’s how people make their movies and how they expect their movies to be seen,” Jeff Shell, CEO of NBCUniversal said earlier this year. “But the flip side is the majority of our movies, whether we like it or not, are being consumed at home, it’s not realistic to assume that we’re not going to change, that this part of the business isn’t going to change like all parts of the business are going to change.”

‘Irresistible,’ ‘Rogue’ Top Slate of New Disc Releases, While ‘Beetlejuice,’ ‘Goonies’ Bow on 4K Ultra HD

The political satire Irresistible, from Universal Pictures Home Entertainment, and Lionsgate’s action thriller Rogue, with Megan Fox as a battle-hardened mercenary, top the slate of new disc releases available Sept. 1.

Written and directed by Jon Stewart, Irresistible features a cast headed by Steve Carell, Rose Byrne, Chris Cooper, Mackenzie Davis and Topher Grace. Carell portrays a campaign strategist who runs a Democratic mayoral candidate (Cooper) in a small right-wing town.

The film, from Focus Features, was rerouted from a May 2020 theatrical release by the coronavirus pandemic and instead debuted in June on premium VOD. It became available through regular digital channels on Aug. 18.

Read John Latchem’s review of the Irresistible Blu-ray Disc here

Rogue finds Samantha O’Hara (Fox) leading a team of soldiers-for-hire on a daring mission to rescue hostages from their captors in rural Africa.  They wind up stranded and have to battle not only brutal rebels but also a horde of enraged lions.

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Also out Sept. 1 are 4K Ultra HD Blu-ray editions of the Tim Burton ghost movie Beetlejuice and the 1980s cult favorite adventure The Goonies, both from Warner Bros. Home Entertainment.

Beetlejuice (1988) stars Michael Keaton as a ghost who helps a recently deceased couple played by Alec Baldwin and Geena Davis haunt their former home. The Goonies (1985),  based on a story by executive producer Steven Spielberg, follows a band of kids from the blue-collar “Goon Docks” neighborhood who set out to save their homes from foreclosure by following an old treasure map.

On the TV front, consumers as of Sept. 1 can buy, on disc, the complete third season of “Young Sheldon” (from Warner Bros.), the second season of “Magnum P.I.” (from Paramount/CBS), and the first season of “Blood & Treasure” (also from Paramount/CBS).

New digital releases include Guest House, from Lionsgate, and Breaking the Chain, from Virgil Films, the company headed by industry veteran Joe Amodei. Guest House is a comedy about an engaged couple whose new dream home comes with a slight drawback: a party animal who lives in the guest house. Breaking the Chain is an animal-rescue documentary that follows fieldworkers with PETA’s Community Animal Project as they visit impoverished areas of Virginia and North Carolina to give care to mistreated animals.

A complete list of new disc and digital releases, compiled each week by the Media Play News market research team, can be found here.

AFI and Universal Launch ‘Black Stories Matter’ Compaign Offering Free Digital Movie Rentals

The American Film Institute (AFI) and Universal Pictures have launched a week-long AFI Movie Club event called “Black Stories Matter,” spotlighting narratives from celebrated black films.

Born from a recent AFI/Universal collaboration honoring Do the Right Thing and Academy Award-winning director Spike Lee, the expanded partnership will pay tribute to BlacKkKlansman, Get Out, Girls Trip, Loving and Straight Outta Compton with free digital movie rentals.

Each of the Universal films will be available to rent for free on Amazon, Apple, Charter, Comcast, Cox, Dish, FandangoNow, Redbox, Verizon and Vudu, among others, beginning Aug. 24 through Aug. 30.

Enhanced AFI Movie Club content will feature new interviews with composer Terence Blanchard (BlacKkKlansman), Malcolm D. Lee (Girls Trip), cinematographer and AFI Alum Matthew Libatique (Straight Outta Compton), Ruth Negga (Loving), writer Tracy Oliver (Girls Trip), Ron Stallworth (BlacKkKlansman) and more.

“For decades, Universal has supported thought-provoking stories and powerful perspectives that have served to enlighten, enrich and entertain,” Donna Langley, chairman, Universal Filmed Entertainment Group, and AFI Trustee, said in a statement. “Through this partnership with AFI, we are proud to further shine a light on these distinctly important works that continue to so poignantly amplify today’s conversation.”

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AFI Movie Club will highlight each day’s film with a conversation between film critic Shawn Edwards and filmmakers and talent involved with the films; “Behind the Scene” featurettes about a specific scene examined by an artist from the film; and exclusive clips sourced from AFI’s archive of Master Class Seminars, as well as curated trivia researched from the AFI Catalog of Feature Films.

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“The mission of AFI and the AFI Movie Club has always been to educate and inspire audiences — and to drive culture forward,” Bob Gazzale, president and CEO of the American Film Institute, said in a statement. “We are thrilled to expand our partnership with Universal and to further the conversation about stories that are culturally and nationally significant.”

The moderated conversations, featurettes and exclusive AFI Archive material will be available on AFI.com/MovieClub and the AFI YouTube channel at YouTube.com/AFI.

Launched on March 31 with the goal to show audiences a world of art above anxiety, AFI Movie Club has announced a classic film a day as a way of connecting audiences with “movies to watch together when we’re apart,” according to the AFI. The first title was The Wizard of Oz and was announced via special video introduction by Steven Spielberg. Since then, special guests introducing daily titles have included J.J. Abrams, Halle Berry, Jessica Biel, Jack Black, Kenneth Branagh, Millie Bobby Brown, Hanelle Culpepper, Robert De Niro, Benicio del Toro, Lena Dunham, Cynthia Erivo, Carl Franklin, Morgan Freeman, Danny Glover, Jeff Goldblum, Hugh Grant, Taylor Hackford, Jon Hamm, Asher Jelinsky, Eva Longoria, Leonard Maltin, Helen Mirren, Demi Moore, LaToya Morgan, Elisabeth Moss, Mira Nair, Brad Pitt, Natalie Portman, Issa Rae, Eddie Redmayne, Emma Roberts, Sarah Silverman, Alicia Silverstone, Sharon Stone, Emma Thompson and Kerry Washington.

Ampere Research: Pandemic Breaks Down Value of Theatrical Window

The pandemic has opened a door to breaking the theatrical window.

Research firm Ampere modeled various fictional scenarios of windowing during the pandemic, comparing the income post-COVID 19 to the income a title would have expected to have generated pre-2020.

“In a pre-COVID world, many of the scenarios would have offered only marginal gains (with significant risks) compared to a traditional release strategy,” according to Ampere. “However, in post-COVID markets, these options have started to look like viable opportunities.”

To assess the viability of a selection of alternative approaches, Ampere created a fictional mid-tier movie and modeled a series of windowing scenarios based on market trends, designing four scenarios of new windowing practices studios may adopt:

  • Scenario 1: Replace the first window theatrical distribution with premium video-on-demand (PVOD).
  • Scenario 2: Adopt strategies of using PVOD and theatrical windows sequentially, similar to Universal’s recent deal with AMC.
  • Scenario 3: Replace traditional windowing with a pure direct-to-consumer offering.
  • Scenario 4: Release films theatrically before making titles available exclusively on their own direct-to-consumer services.

The firm found the Universal deal with AMC (Scenario 2) was the most viable model for mid-tier releases. In Scenario 2, Ampere found that an accelerated PVOD window, such as the deal between Universal and AMC, is the most stable for exhibitors and studio groups, offering comparable returns for cinemas and increased revenue for the studio on mid- and lower-tier releases. However, top-tier titles are likely to be better monetized via traditional windowing models. The presence of theatrical releases still offers consumers the opportunity to view the movie with a cinema experience, meaning that this model doesn’t risk ‘lost’ transactions — unlike some of the other scenarios Ampere explored. The success of the model depends on negotiations with exhibitors and retailers, Ampere noted. Before agreeing to an earlier window, exhibitors will want to ensure that the mid-term future of the theatrical business is not being eroded to the extent that it will sideline them in future periods. Studios will need to work with digital retailers to ensure that films are adequately signposted as premium releases and are not unfavorably compared to catalogues of cheaper rentals, according to Ampere.

There is a significant appetite for home rental and purchase, with the domestic U.S. transactional video market at roughly 40% of theatrical’s size, according to Ampere. In principle, some titles could earn comparable amounts from PVOD as from theatrical distribution. However, for high-end blockbuster titles, which are typically able to obtain greater cuts of box office revenue, and international releases (in markets where the digital rental and retail market is less well developed), a pure PVOD approach would be far more risky. To account for this, split models would be more appropriate, with strategies tailored according to local importance of a title and the appetite for home rental and retail, according to Ampere.

Ampere’s research revealed that a theatrical to direct-to-consumer model is likely to be more feasible than a pure D2C model (bypassing theatrical entirely). However, both approaches are dependent on numerous influencing factors. Whether the model suits any given title is contingent on the retention of any new subscribers who signed up to watch the movie, and therefore the strategy is reliant on keeping both wider catalogue costs, and subscriber churn rates, down, according to Ampere.

“Looking forward, Ampere believes some of the major studios will adopt split strategies that can utilize PVOD while maintaining the benefits of theatrical distribution,” said Ampere analyst Peter Ingram in a statement. “Most of the studios have been experimenting with strategies during lockdown that completely eschew the theatrical window. However, despite the change we are expecting to the cinema market, theatrical remains one of the best revenue streams for titles throughout their life cycle. Not only do most people see the film in its theatrical window, but tickets are charged on an individual basis. By comparison, when a film is bought via PVOD, or watched via an SVOD service, it can be shared with friends and family under a single transaction.”

Nathanson: 17-Day Theatrical Window a ‘Dangerous Precedent’

With the coronavirus pandemic shuttering movie theaters, studios have slowly embraced premium VOD and releasing lesser titles early into digital retail channels. When Universal Pictures and AMC Theatres announced plans to shrink the traditional 90-day theatrical window to 17 days for new-release movies, the studio business model was thrown on its ear.

Perennial box office champion Disney — a long-time champion of the traditional theatrical window — broke ranks announcing it would bypass theaters and offer live-action Mulan to consumers in the home next month.

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“We were not surprised by Mulan. We thought [the movie] would go SVOD direct,” Michael Nathanson, analyst with MoffitNathanson, said Aug. 20 on the DEG: The Digital Entertainment Group Mid-Year 2020 Digital Media Entertainment Report webcast. “We’ve speculated changing the theatrical window for years, and here we’re seeing it happen in real time. It’s been a year of experimentation.”

Nathanson said the theatrical business has been Disney’s domain for years (64% of all industry pre-tax earnings in 2019, according to Nathanson), and CEO Bob Chapek’s decision to alter traditional distribution models will “ripple” through the industry (including home video) for years to come. The analyst contends the country has too many movie screens operating under current market conditions.

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“The number [of screens] has to fall,” he said in response to the slate of original movies moving to SVOD and other digital channels. The analyst said that trend will accelerate as studios and their media parents roll out digital distribution platforms such as HBO Max, Peacock and Disney+.

Nathanson said he believes Disney has no plans to abandon the theatrical window altogether since the studio makes money ($1.4 billion operating profit) on most of its major releases at the box office. And theatrical releases often inspire amusement park rides and consumer goods.

“Disney is not all-in [on shrinking the window],” Nathanson said, adding he never expected the window to shrink below 30 days.

“We were shocked at AMC’s deal,” he said. “We think it’s a very dangerous precedent.”

The analyst said that when analyzing the percentage of box office revenue in the 90-day window, upwards of 30% of most $100 million movies’ box office is generated beyond 17 days.

“It didn’t make sense to us to cannibalize days 17 to 30,” he said. “We’re still puzzled by that decision to go to the shorter timeframe.”

He said much of the economics will be determined by how much Universal charges for the home video releases, but said that at the end of the day it will be a “bad outcome” for exhibitors.

Indeed, despite a saturation of movie screens, rising SVOD, AVOD and digital distribution for non-blockbuster movies has left plenty of opportunity for the traditional 90-day window, according to Nathanson.

“We are the most over-screened country in the world,” he said. “We don’t understand why we won’t see a reduction in screens first. We’ve been waiting for changes in the theatrical business for some time. And this crisis has really escalated behavior by some media companies that feel they have the green light to experiment.”

‘The Outpost,’ ‘Deathstroke’ Top Slate of New Disc, Digital Releases

Despite the lack of theatrical titles, the home entertainment marketplace is once again getting a fresh batch of new releases on both the physical media side and the digital side.

Topping the slate of new disc releases available Aug. 18 is Screen Media’s The Outpost, a war drama directed by Rod Lurie that is based on the book by Jake Tapper about the Battle of Kamdesh during the War in Afghanistan. The film, which stars Orlando Bloom, was scheduled to premiere at the 2020 South by Southwest Film Festival, but in the wake of the festival’s cancellation it was released via VOD, and in a handful of open theaters, on July 3. The film is available on DVD and Blu-ray Disc and may also be purchased or rented through digital retailers.

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Also new, to Blu-ray Disc, is Warner Bros.’ Deathstroke: Knights & Dragons: The Movie, a 2020 direct-to-video animated superhero film compiling the CW Seed series “Deathstroke: Knights & Dragons” produced by Warner Bros. Animation. The film has been available through digital retailers since Aug. 4.

Two other new releases worthy of note, Military Wives and Emperor, come from Universal Pictures Home Entertainment and are available on DVD and digital only.

Military Wives is a 2019 British dramedy starring Kristin Scott Thomas and Sharon Horgan. It was directed by Peter Cattaneo, from a screenplay by Rosanne Flynn and Rachel Tunnard. The film premiered at the Toronto International Film Festival in September 2019.

Emperor, directed by Mark Amir, is based on the life story of Shields Green, an escaped slave who travels north and has chance encounters with Frederick Douglass and John Brown.

A complete list of new disc and digital releases, compiled each week by the Media Play News market research team, can be found here.

Merchandising: Best Buy Celebrates 25th Anniversary of ‘Casper’ With Steelbook

The latest catalog title to get a special Best Buy Steelbook exclusive Blu-ray is Universal’s 1995 family film Casper.

The film, a live-action version of the “Casper the Friendly Ghost” cartoons, is offered at Best Buy as a 25th anniversary Steelbook Blu-ray edition at $14.99. The movie version stars Christina Ricci and Bull Pullman.

Otherwise, the DVD and Blu-ray sections at the major retailers are starting to see some neglect as the pandemic wears on, simultaneously upping the profile of digital delivery while limiting the number of blockbuster new releases hitting shelves. A Target store in Tustin, Calif., hadn’t even bothered putting the new Aug. 11 titles on shelves as of late afternoon Tuesday.

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While Target hasn’t offered much in the way of DVD deals lately, it does have 20% off select books and 25% off vinyl records with the purchase of another record.

Cinemark CEO No Fan of Shortened Theatrical Window

Following AMC Theatres’ landmark decision to allow Universal Pictures to distribute movies into consumer homes just 17 days after their theatrical debut, rival chain Cinemark is questioning the move indirectly.

Headquartered in Plano, Texas, Cinemark operates 554 theaters and 6,132 screens in the U.S. and Latin America. Speaking on the Aug. 4 fiscal call, CEO Mark Zoradi said theatrical exclusivity for new studio movies must be maintained despite the current COVID-19 environment that has seen the exhibition business shuttered since mid-March.

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Saying the company wouldn’t comment on the strategies of its rivals, Zoradi said an exclusive theatrical window is critically important to the industry.

“While we have publicly stated that we’re willing to have conversations with our studio partners to evolve windows, we’re mindful that an overly aggressive shortened theatrical window could have an adverse impact to the mid-to-tail-end of a film’s life,” he said.

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Key to the AMC/Universal deal is the exhibitor’s revenue-sharing agreement on sales/rentals of titles into the home entertainment market.

Mindful of incremental revenue possibilities via transactional VOD following a fiscal quarter that saw Cinemark generate just $37,000 in ticket sales over 90 days, Zoradi said he remains open to change during the pandemic and beyond.

“We will be very careful and methodical about how we approach any change to the theatrical windows,” he said. “We continue to carefully analyze and research this matter. And we will endeavor to ensure any modifications are in the best interests of the overall industry, our company and our shareholders.”