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Marcus Theatres Are Not Banning Universal Movies Yet [Exclusive]

Posted 2020/04/29 0



While the world waits for the dust to settle after Universal, AMC and, now, Cineworld/Regal started throwing stones over the potential for Universal to release their films on PVOD concurrently with theatrical exhibition, Marus Theatres (the 4th largest U.S. exhibitor) has unofficially indicated that they are not (yet) abandoning Universal titles.

During an industry conference call discussing programming content to reopen theaters and move forward post-Covid, Sonny Gourley, SVP Film, at Marcus Theatres confirmed that, at least at this time, Marcus is still planning to play Universal’s ‘theatrical titles’, listing F9, Minions: The Rise of Gru and Candyman, specifically — all Universal titles that have already had their release dates delayed. He clearly delineated that those ‘theatrical titles’ were those titles that were slotted for exclusive theatrical release, inferring they would not be simultaneously released on PVOD. The important take-away here, though, is that Marcus is not banning Uni titles.

J. Sperling Reich, the moderator of the call pointed out the interesting fact that Dalian Wanda, the Chinese giant that is also AMC Theatres’ largest owner, also owns Legendary Entertainment, a studio that is tightly tied to Universal (co-financing/production, etc.). Will that mean that AMC will not be allowed to actually ban Universal titles?

If Marcus, at least thus far, is still committed to showing Universal movies on their screens (at least the ‘theatrical’ titles… that don’t also have a PVOD simultaneous release), that leaves Cinemark that we’ve not yet heard from on the topic. Where does the third largest U.S. cinema chain stand on the topic? When will we hear from them?

The bigger question, though, may be whether this tussle will result in some form of ‘day-and-date’ release package leaking into the business of exhibition. There are several movies that studios produce that simply don’t fit the traditional exhibition model. These lower budget films are not destined to draw audiences at the high-cost megaplex and, as such, may simply be better released simultaneously.

We could expect Universal to make that argument that… theater operators should make their own choice whether to carry those titles, on a case-by-case basis, that will have a simultaneous PVOD release. After all, should movie fans not have the choice to either see the movie on the big screen or the comfort of their own home? If a studio makes a movie that’s a little beyond the scope of straight to video, but not really worthy of a full exclusive theatrical release, would there not be some sense in a strategy that straddles the windows?

More to the point, Universal and other studios have made the case for several years that the production and marketing cost that goes into launching these films is sometimes so high that a shorter window (than the norm of around 90 days from theatrical to video) would allow the studios to gain better return from their investments. This, though, is the key point of the entire battle.

One one hand, the exhibitors build ever larger, louder and more comfortable auditoriums. This is costly and time consuming and is an enormous capital expense. To underwrite these costs, they take on enormous debt. To make all this investment worthwhile, the theaters need an exclusive window on titles that draw audiences sufficient to maximize their take, at a time when studios (especially Diseny *cough-cough*) take an ever-increasing share of the ticket sales revenue during the theatrical release.

On the other hand, the studios spend more on huge films and franchises with truly asinine production budgets and ludicrous marketing budgets to match. In order to increase their own return on these massive investments (since they’ve already sucked all they can out of the per ticket revenue share on theatrical release), they now need to see how they can get more margin on these releases and a better return on their marketing spend. The success of Trolls World Tour has shown them that they earned nearly as much (in margin) on the quick home release as they did on the entire run of the film’s predecessor, Trolls. What if, then, Universal could leverage that marketing spend to maximize the payback and profit into a shorter overall life-cycle across both theatrical and PVOD? IF cinemas would allow it, it’s a potentially great formula.

This is where the potentially existential (for the theaters) line must now be drawn.



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