In the AMC vs. Universal War, Small Business Owners Lose
There’s a big kerfuffle between Universal and AMC related to a VOD release of Trolls World Tour, but the only people I sympathize with are the small business owners.
Due to the theater shutdown as a result of our ongoing pandemic, Universal released the Trolls World Tour movie as a VOD rental. On the surface, my gut reaction is to praise this move. I truly believe that the future of cinema is using VOD as an easily accessible release option, and that theaters will remain as an option for those who prefer that experience over at-home viewing. I thought that the whole ordeal with The Interview would bring in this change, but things went back to normal shortly after. The change simply didn’t stick.
Now AMC has stepped forward and stated they won’t play any Universal films in their over 1,000 theaters as a result of Universal’s decision to release the film via VOD. The president of AMC sent Universal a pretty strongly worded (and extremely long) letter (which we are editing for length but you can read in full on Business Wire):
Universal stated it only pursued a direct-to-home entertainment release for “Trolls World Tour” because theaters were closed and Universal was committed to a lucrative toy licensing deal. We had our doubts that this was wholly Universal’s motivations, as it has been a longstanding desire by Universal to go to the home day and date. Nonetheless, we accepted this action as an exception to our longstanding business practices in these unprecedented times.
In today’s Wall Street Journal, Jeff Shell is quoted as saying that:
“The results for ‘Trolls World Tour’ have exceeded our expectations and demonstrated the viability of PVOD,” Mr. Shell said. “As soon as theaters reopen, we expect to release movies on both formats.”
This radical change by Universal to the business model that currently exists between our two companies represents nothing but downside for us and is categorically unacceptable to AMC Entertainment, the worlds largest collection of movie theatres.
Going forward, AMC will not license any Universal movies in any of our 1,000 theatres globally on these terms.
Accordingly, we want to be absolutely clear, so that there is no ambiguity of any kind. AMC believes that with this proposed action to go to the home and theatres simultaneously, Universal is breaking the business model and dealings between our two companies. It assumes that we will meekly accept a reshaped view of how studios and exhibitors should interact, with zero concern on Universal’s part as to how its actions affect us. It also presumes that Universal in fact can have its cake and eat it too, that Universal film product can be released to the home and theatres at the same time, without modification to the current economic arrangements between us.
[Effective] immediately AMC will no longer play any Universal movies in any of our theatres in the United States, Europe or the Middle East. This policy affects any and all Universal movies per se, goes into effect today and as our theatres reopen, and is not some hollow or ill-considered threat.
This incredibly long and strangely personal letter (he seriously started it with “Dear Donna”) doesn’t do a lot to garner much sympathy for them. The letter doesn’t mention anything about the value of the movie-going experience, which is something many theater-going fans use to defend the push against VOD releases becoming the norm.
I can’t even argue against that particular line of defense, because some people prefer theaters. So, sure, let’s leave it as an option for those individuals. My problem is with it being the only option as I feel it hurts accessibility. But I digress…
But no, this letter is very clear that it wants to preserve the relationship between studios and distributors, which basically means they are defending their profit. AMC is a major corporation worth many billions of dollars. It’s just hard to feel bad for them. They want to maintain their cash flow, period. And they aren’t even hiding that motive in this letter.
Universal is not exactly the hero of this story either, though, despite the fact I agree with the direction they want to take the future of cinema. Let’s not forget that they are also a multi-billion dollar company and, while watching them have a very public slap fight with another corporation is even more entertaining than the film that sparked this whole kerfuffle itself, they are also mowing down a lot of small businesses in the process. Mainly, they are going to hurt small non-corporate theaters, which operate on an extremely tight profit margin to begin with.
When I was in college I worked for a small independently owned theater that only had two screens. Their profit margins were so small that sometimes they spent more money paying the staff than they did in ticket sales for the films.
There were days where we sold less than a dozen tickets on either screen during an entire eight hour period. On good days when they did make a profit, it went to the theater owner, who lived in the nearby community. It didn’t go to some executive in some far off big city that we would never interact with ever.
A dramatic shift away from theaters will hurt these small theaters, who are already suffering during this pandemic along with so many other small businesses. AMC will survive this. These little theaters might not.
This particular issue is a problem with many different industries. Big restaurants will survive, but small ones might not. Big retailers may survive, but small ones might not. It’s just a disaster for small businesses on every level.
The world is going to be very different when we get to the other side of it and I hope it’s not a world where only the corporations have survived. But this dispute between Universal and AMC seems to make it clear they are too busy fighting each other and trying to keep their profits flowing while not even trying to hide it anymore.
In the end, the small businesses will lose and that’s a tragedy.
Author: Angel Wilson
Angel is the admin of The Geekiary and a geek culture commentator. They earned a BA in Film & Digital Media from UC Santa Cruz. They have contributed to various podcasts and webcasts including An Englishman in San Diego, Free to Be Radio, and Genre TV for All. They’ve also written for Friends of Comic Con and is a 2019 Hugo Award winner for contributing fanfic on AO3. They identify as queer.
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