Looking to calm movie theatre owners' concerns around recent shifts in legacy film distribution to video-on-demand platforms, Jeff Shell, chief executive officer NBCUniversal, says movie theaters will continue to be “central” to its business.
Speaking during a Comcast Corp. earnings call on Thursday, Shell said:
“There is no question that theatrical is someday again going to be the central element to our business and the film business itself and how people make their movies and how they expect their movies to be seen.”
With regard to video-on-demand services, he added: “It’s not going to be a replacement, but it’s going to be a complementary element and we’re just going to have to see how long that takes and where that takes us.”
Shell's remarks led to a backlash from major movie theater chains after speaking to The Wall Street Journal earlier this week concerning “Trolls World Tour” pulling in $100 million in video-on-demand rentals after three weeks -- comparable to movie theatrical releases.
With movie theaters closed due to COVID-19, NBCU elected to run the movie on home VOD rental services. Shell was quoted as saying: “As soon as theaters reopen, we expect to release movies on both formats.”
In response, major theater chains -- beginning with the biggest U.S. owner, AMC Theaters, then followed by Cinemark and Cineworld (owner of Regal Theaters) -- said they would no longer play any Universal movies in their theaters.
Universal -- like other movie studios -- shifted movies to later in the year, including the latest editions of its “Fast & Furious” franchise and “Minions.”
For decades, movie theaters have had a long-term 90-day exclusivity window to play films before any other entertainment distribution -- home video streaming rentals, physical DVD rentals, broadcast or cable TV airings.
During the Comcast earnings call, Shell added that the entertainment environment has changed and the industry needs to adjust. “The flip side is the majority of movies, whether we like it or not, are being consumed at home -- and it’s not realistic to assume that this part of the business is not going to change," he said.