Another major movie chain has struck a ground-breaking deal with Universal Filmed Entertainment -- cutting back on the exclusivity period of movies in theaters, quickening their move to at-home streaming platforms.
Cinemark Holdings -- the third-biggest U.S. theatrical movie chain -- has agreed to narrow exclusivity of movies running in its theaters to 31 days. Typically, movie chains have had an exclusivity period of 60 days to 90 days.The new 31-day exclusive agreement (five weekends) applies to all types of movies including major tentpole films and franchise movies running in key summertime and end-of-the-year holiday periods.
In addition, if a Universal Pictures or a Focus Feature film doesn’t open to an overall U.S. box office revenue mark of $50 million or higher for its release weekend, Universal can place it on a streaming platform 17 days after its theatrical release.
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Those movies will be limited to single rental offering -- premium video-on-demand (PVOD) -- versus the all-you-can-watch paid-subscription streaming services (Netflix, Hulu, Disney+, and Amazon Prime Video).
Earlier this year, AMC Entertainment struck a similar deal with Universal for a 17-day exclusivity window. After that period, Universal can elect to pull the film and run it on a streaming platform. AMC gets to participate in streaming revenue-share with Universal for certain movies.
Terms were not disclosed for the Universal/Cinemark deal. But, like AMC, it is expected to share the streaming revenue. A statement from Mark Zoradi, chief executive officer of Cinemark, said:
“We believe a more dynamic theatrical window, whereby movie theaters continue to provide an event-sized launching platform for films that maximize box office and bolsters the success of subsequent distribution channels, is in the shared [emphasis added] best interests of studios, exhibitors and, most importantly, moviegoers.”
The 17-day window gives movie theaters three full weekends of exclusivity -- weekends that can comprise up to 85% of a movie’s entire U.S. theatrical box office revenues.
Due to theater closures resulting from the COVID-19 pandemic earlier this year, Universal pulled its theatrical-intended “Trolls World Tour," offering it on a $19.99 streaming basis in April, earning $100 million through three weeks after its release.
That led to a major outcry from movie-chain executives including at AMC Theaters and Cineworld’s Regal Cinemas.
In September, Disney shifted its theatrically intended “Mulan” to its streaming platform Disney+, which was priced at $29.99 for non-Disney+ subscribers on top of a $6.99 monthly Disney+ price tag. The movie took in $35.5 million for its opening weekend.