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amc ceo having a shitfit about universal's trolls streaming success

hayden_horn

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hayden_horn

hayden_horn 11362

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https://deadline.com/2020/04/amc-fires-off-note-to-universal-in-wake-of-jeff-shell-wsj-statements-on-windows-trolls-world-tour-exhib-wont-license-studios-movies-1202920415/

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AMC boss Adam Aron has just fired off a letter to Universal Studios Chairman Donna Langley in response to NBC Universal CEO Jeff Shell’s statements in the Wall Street Journal this morning about the $95M PVOD success of Trolls World Tour. 

As Aron explains to Langley in the letter (read it below), he initially got it: Theaters were closed, and the decision to take Trolls World Tour into homes was an exception. But Shell’s words in the Wall Street Journal this morning that have really stoked ire were, “As soon as theaters reopen, we expect to release movies on both formats,” indicating a day-and-date theatrical-VOD shift.

In response to Shell daring to crush the window on embattled exhibitors, Aron — who runs the world’s largest movie circuit — replied, “Going forward, AMC will not license any Universal movies in any of our 1,000 theatres globally on these terms.” And that goes for AMC sites in the U.S., Europe and the Middle East.

i think amc is missing the point, but they kind of have to defend their dying business model, i guess. but they think they are negotiating from a position of advantage with their number of theaters, when in reality i think they are at a severe disadvantage. while the experience of seeing movies at the theater is still different than home, the experiences are converging rapidly, with the traditional amc business model of popcorn, cokes and milk duds shifting to more alamo type of experience.

and i also think that universal's statement of releasing movies in both formats makes a lot of sense. frankly, if you aren't going to the movies now to watch trolls 2, you'll wait three months for the streaming rental. you'll still have movies like 1917 that will be vastly different on the silver screen rather than my flat panel, sure. but studios choosing how to distribute their content is a shifting paradigm. there may be some titles that they anticipate being not so popular in theaters that they can release direct to home televisions, and make more money.

i think amc upping the rhetoric with universal may not end well for them, since other studios are no doubt eyeing the success of trolls 2 electric bugaloo, and salivating about the money they can make with titles just sitting on the shelf. 

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HoffaJimmy

HoffaJimmy 316

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I understand why he is upset but as you pointed out they are screwed long term. COVID is just speeding up the death of their business. 

We rented Trolls for $20 a couple weeks ago, If you factor in food and drink we probably saved $738 by not going to a movie theater and was still enjoyable at home. (The movie was average and my math might be off on the savings of not having to buy popcorn, drinks and candy at the theater)

 

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wutang75

wutang75 449

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I understand why he is upset but as you pointed out they are screwed long term. COVID is just speeding up the death of their business. 
We rented Trolls for $20 a couple weeks ago, If you factor in food and drink we probably saved $738 by not going to a movie theater and was still enjoyable at home. (The movie was average and my math might be off on the savings of not having to buy popcorn, drinks and candy at the theater)
 


I’ll gladly overpay for snacks and drinks and anything else for the option of going to the theater to see a movie.


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greenman

greenman 64

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Secret Life of Pets 2 had a budget (including marketing) of around 275-300 million. I’m assuming this has the same budget so it’s a long way from a break even point if it’s just hitting 100m. You have to think DVDs/Blu Rays/Rentals numbers will be down. 
 

I’m betting they use this to shorten the theatrical release window from the current 90 days until streaming, which is fine since most movies make their most within 30 days. There’s a middle ground to be found, work a new deal where studios can being streaming in 30-45 days. 

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elfenix

elfenix 34251

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50 minutes ago, Incredulity said:

Good for him.  Not sure it will work out all that well, but you gotta take a stand at some point.

Its interesting to think about theaters in there original form owned by studios and that being outlawed.

https://en.wikipedia.org/wiki/United_States_v._Paramount_Pictures,_Inc.

we used to think of vertical integration as a bad thing

 

theaters are in a bind.  they're completely reliant on studios for the thing that gets people in the doors.  they've had to engage in an arms race to keep movies (the blockbusters, at least) at an ever-increasing experience level.  bigger screens, bigger sound systems, stadium seats, digital projectors, 3D projectors, academy imax, etc.  that's all done to improve the studios' product.  and the studios won't, or maybe can't, lend any financial support to the theaters doing that.  and for the first few weeks of release, the theaters aren't making money on the movies.  the split between theaters and studios for ticket sales is almost entirely to the studios to start, and moves toward the theaters as time goes on. 

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Gene Parmesan

Gene Parmesan 4007

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I would think they both need each other.  I wouldn't think studios can survive on a straight to homes model with their current movie budgets.  Maybe they culled back their marketing for Trolls World Tour and that saved some costs, but I can't imagine they made much from that movie.  A family of 4 going to the theatres is approx. $48 in tickets (generally all going to studios) and probably another $40+ bucks in concessions going to the theatres.  Straight to home streaming it's $20 all in for a family.

Those Marvel movie budgets are basically needing what 500million to break even?  That's 25 million homes at $20.

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CooterBrown

CooterBrown 18014

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Posted (edited)
26 minutes ago, Gene Parmesan said:

I would think they both need each other.  I wouldn't think studios can survive on a straight to homes model with their current movie budgets.  Maybe they culled back their marketing for Trolls World Tour and that saved some costs, but I can't imagine they made much from that movie.  A family of 4 going to the theatres is approx. $48 in tickets (generally all going to studios) and probably another $40+ bucks in concessions going to the theatres.  Straight to home streaming it's $20 all in for a family.

Those Marvel movie budgets are basically needing what 500million to break even?  That's 25 million homes at $20.

You'll see a shift of Hollywood merging with Asian and Bollywood studios to save money.  Extraction on Netflix cost $65M. There was nearly zero marketing for it but it's been hugely popular.  If it had been a solely Hollywood film, it would've cost $150M + $20M marketing.  It looks and feels expensive but they obviously paid child labor rates to get it made.  You'll see more of that going forward to help make money in the streaming world.

 

 

Edited by CooterBrown
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Red Five

Red Five 40859

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1 hour ago, greenman said:

Secret Life of Pets 2 had a budget (including marketing) of around 275-300 million. I’m assuming this has the same budget so it’s a long way from a break even point if it’s just hitting 100m. You have to think DVDs/Blu Rays/Rentals numbers will be down. 
 

I’m betting they use this to shorten the theatrical release window from the current 90 days until streaming, which is fine since most movies make their most within 30 days. There’s a middle ground to be found, work a new deal where studios can being streaming in 30-45 days. 

It cost 300 million to make Secret Life of Pets 2?? 

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Gene Parmesan

Gene Parmesan 4007

Posted
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1 hour ago, CooterBrown said:

You'll see a shift of Hollywood merging with Asian and Bollywood studios to save money.  Extraction on Netflix cost $65M. There was nearly zero marketing for it but it's been hugely popular.  If it had been a solely Hollywood film, it would've cost $150M + $20M marketing.  It looks and feels expensive but they obviously paid child labor rates to get it made.  You'll see more of that going forward to help make money in the streaming world.

 

 

That's a good point as to ancillary movies like that, but I wonder if they can get away with it for your big blockbuster type movies.   

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Rougarou

Rougarou 594

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Posted (edited)

A super quick google search returned:

 The Secret Life of Pets 2 grossed $158.3 million in the United States and Canada, and $271.2 million in other territories, for a worldwide total of $429.4 million, against a production budget of $80 million. Deadline Hollywood calculated the net profit of the film to be $118 million, when factoring together all expenses and revenues

I rented Trolls 2 for a family movie unit. 5 people, at $20 total, so basically the "ticket" was $4 each. I got to make my own cookies and eat our own Easter Candy. It was an amazing experience and the next night we promptly bought Sonic the Hedgehog because it's so frictionless.

We are the family who will wait for it to come on streaming but if it were on demand, we'd buy it to see the new movies because going to a movie theatre is a pain and not worth it. I'm curious to see how this plays out because AMC is in the position of Blockbuster 25 years ago in my book.

Edited by Rougarou
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Neonmoon

Neonmoon 38129

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People still want to get out of the house and go to the movies...sometimes. I agree with the poster above, if I’m going to a movie, it’s to Alamo with good food and drinks. And still, it’s only for movies I really really want to see. I haven’t been to an AMC in probably 8 years. 


AMC needs a new business model. Trains already on the tracks. 

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atomheartbevo

atomheartbevo 89675

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So, given the singular use of their facilities, and where many of them are built originally, do those theater chains own their real estate?  Seems like they would, it's a big difference for a developer between building retail/office space to lease out, that can easily be reconfigured, versus a big fucking movie theater and massive parking lot that would have to be demolished for any other business.

 

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WBT

WBT 20579

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7 hours ago, Dbeasy said:

To really solve the problem, AMC should develop and own content that plays way better in theaters and incorporates technology that delivers an experience superior to what can be achieved at home.

They already do imo.  Your mileage may vary.

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atomheartbevo

atomheartbevo 89675

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9 hours ago, greenman said:

I’m betting they use this to shorten the theatrical release window from the current 90 days until streaming, which is fine since most movies make their most within 30 days. There’s a middle ground to be found, work a new deal where studios can being streaming in 30-45 days. 

I am thinking the middle ground will be the discount/dollar theaters going away.  

You can get decent 4K TVs for under $500 these days, and if you are wanting to watch something, there is always something new on one of the streaming services.

These are the top Hollywood studios

  1. Disney/20th Century Fox/Various subsidiaries (Marvel, LucasFilm, Pixar, Searchlight, etc.)
  2. Warner Brothers/HBO/DC
  3. Universal Pictures
  4. Columbia/Sony
  5. Paramount/CBSViacom

Columbia/Sony is the only one there that doesn't have their own streaming service pushing out their films.   Sony had Vue that they just closed, but it was more akin to Hulu.   Sony has the Playstation, and they've got the infrastructure, so it's possibly a matter of time until they make another run at streaming.   Assuming they want to spend the money on the content.

Warner Brothers is rolling their service out next month with thousands of hours of stuff going back a century or so.  Their HBO and Harry Potter stuff alone is a massive draw.

Anyways, point being, 4 out of the top 5 Hollywood studios could just decide to skip theaters if needed, and add a PPV/rental section to their streaming services, and probably rake in plenty of money.  After a few months of a movie costing extra to watch (whether it's $10 or $20), they could drop the PPV fee , and move that movie into the regular pool of streaming content included in the base price of the service.

And given that marketing is half of movie's budget at times, if they ditched marketing, and put a big banner on their streaming service that a movie was coming down the pipeline, they could probably recoup their costs.   A $200 million movie (including marketing) might only need $120 million in PPV fees to break even if they skipped marketing.  If they charged $10 for a 48-hour rental, 12 million folks would cover it.  And that's before they offer it to any other streaming services world-wide.

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wild_turkey

wild_turkey 3159

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I like going to the theater but I do it less these days because movie quality has dropped. It’s an endless stream of Marvel and Star Wars movies.

Meanwhile, the theater experience has greatly improved. Reserved seating so I don’t have to get there early, stadium seating that reclines with plenty of leg room, alcohol is available, etc. The AMC near me is somewhat similar to Alamo, well at least to the franchise Alamo locations.

So from my standpoint, the studios are the ones dropping the ball and not the theaters.

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Kyle

Kyle 207

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1 hour ago, Continental Op said:

Jesus dude I hope you didn't tear your rotator cuff reaching for that one.

While your response literally sets new records for lack of cleverness, I like looking at the NSAA section too much to respond. The little brownshirt pussies on this board  will turn in anyone Anne Frank style that does not conform to the Fuhrer, so just accept my apology and please don't sent me to a Bernie Bro.-sponsored concentration camp. 

Edited by Kyle
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Js1

Js1 85348

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12 hours ago, Kyle said:

While your response literally sets new records for lack of cleverness, I like looking at the NSAA section too much to respond. The little brownshirt pussies on this board  will turn in anyone Anne Frank style that does not conform to the Fuhrer, so just accept my apology and please don't sent me to a Bernie Bro.-sponsored concentration camp. 

 

Shut Up Kyle GIFs | Tenor

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'stache

'stache 21816

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Alamo is the only theater I like, the rest are aweful experiences. Especially since AMC installed the most pathetic "bar" i've ever seen. It looks like that transformed a broom closet. It's about 10 feet wide, with two bar stools, and all they serve is domestic swill and well drinks. If you can't do Alamo drafthouse, don't bother with a half-ass attempt.

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Parliament

Parliament 14260

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17 hours ago, atomheartbevo said:

So, given the singular use of their facilities, and where many of them are built originally, do those theater chains own their real estate?  Seems like they would, it's a big difference for a developer between building retail/office space to lease out, that can easily be reconfigured, versus a big fucking movie theater and massive parking lot that would have to be demolished for any other business.

 

Tear them down and build a TGI Friday's?

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Continental Op

Continental Op 3934

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Regal Cinemas jumping into the fray: 

Tensions have been brewing for years, but war was officially declared last night between movie theater exhibitors and Hollywood studios.

AMC Theatres and Universal Pictures have become mortal enemies thanks to comments made in the wake of Trolls World Tour‘s VOD success, and Regal Cinemas has now lobbed its own hand grenade into this battle. According to a statement from the theater chain’s owners, Regal Cinemas “will not be showing movies that fail to respect the [theatrical] windows.” Looks like AMC has found an ally in this war.

https://www.slashfilm.com/regal-cinemas-amc-universal-controversy/?fbclid=IwAR0LyukJpuJwDNaufNaVGAzeLGynEbtW91Vs6rcRLf-n7diy25itGLTHjUc

 

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LCHorn

LCHorn 2620

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Not that this is an entirely novel idea but the studios have either a) figured out they really don’t know how to sell anything other than tent poles or b) producers are really only compensated for them.  Their problem is they aren’t putting anything into production that isn’t aiming for all four quadrants except for a limited fall release window, and it’s the exhibitors that are really hurting in the long run.  
 

The other part (and this is not entirely their fault), but between the technology improvement in the home viewing experience and their own greed, the theatrical experience has gotten considerably more expensive.  I’m sure they know this but if kids aren’t taken to the movies (because of expense) then they aren’t buying tickets as adults.  This is the same reason why I think the NFL (really all pro sports) will be a totally different animal in 20 years.  Kids aren’t watching the Cowboys play, they watch videos on YouTube all day.  

Edited by LCHorn
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zork

zork 629

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On 5/2/2020 at 9:27 AM, babysdaddy said:


Yep. Plus now I know they are going to take out seats so I won’t have to sit close to anyone. Just charge a bit more. It will be great.

taking the family to see trolls at the drive-in sometime in the next two weekends.  My two kids have never been to a drive-in before

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Continental Op

Continental Op 3934

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Looks like AMC might not get to make good on their threat:

https://apnews.com/d5e09c45c57fc8a1e6d77ce785dd6f26

AMC, the largest U.S. chain, said it has enough cash to reopen its theaters this summer as planned. But if it’s not allowed to reopen, it will need more money, which it may not be able to borrow. Film delays are another concern. AMC noted that people may be afraid to go to theaters, but hopes the desire for social distancing is temporary and that people will want to go to the movies again.

“Due to these factors, substantial doubt exists about our ability to continue as a going concern for a reasonable period of time,” AMC wrote in a regulatory filing. The publicly traded company, controlled by Chinese conglomerate Dalian Wanda, has 1,000 theaters in the U.S. and Europe.

 

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