Cinemark and Universal Pictures have forged a landmark agreement to bring theatrical movies more quickly to home entertainment.
The deal follows a recent and unexpected arrangement that Universal struck months ago with AMC Theatres, the world’s largest theater chain. That pact gave Universal the option to put new movies on digital rental services after 17 days of theatrical release — a decision that sent shockwaves throughout Hollywood because it dramatically shortened the timeframe (typically 75 to 90 days) that films play exclusively on the big screen. In exchange, Universal would share in the digital profits with AMC.
Cinemark has agreed to slightly different conditions. Under their terms, any movie that earns more than $50 million in opening weekend ticket sales has to stay in theaters for at least 31 days, or five weekends. All other titles will be available to rent on digital platforms after just 17 days.
According to insiders, those new terms will also extend to AMC.
Neither agreement mandates that new releases have to move to premium video-on-demand after three weekends of release. However, it gives Universal the option should any film perform under expectations. Potential blockbusters like “Jurassic World” or anything under the “Fast & Furious” umbrella, as well as sleeper hits like 2018’s “Halloween” reboot, likely wouldn’t fall into the deal anyway. And any film that migrates to digital early will continue to play in theaters, should operators want to offer it to patrons.
The full financial terms of Universal and Cinemark’s deal have not been disclosed.
“Universal’s century-long partnership with exhibition is rooted in the theatrical experience, and we are more committed than ever for audiences to experience our movies on the big screen,” said Universal Filmed Entertainment Group chairman Donna Langley, who also orchestrated the studio’s historic deal with AMC. “Mark Zoradi and the team at Cinemark have been outstanding partners, and Peter Levinsohn [Vice Chairman & Chief Distribution Officer, UFEG] has done a remarkable job on the studio’s behalf in making deals that give us the confidence to release our movies in the marketplace, keep the content pipeline moving, and provide consumers with the optionality that they are looking for.”
In a statement, Cinemark CEO Mark Zorado said the company believes in “a more dynamic theatrical window.”
“We are extremely pleased to further enhance our strong partnership with Universal as we evolve the exclusive theatrical window,” Zoradi 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 best interests of studios, exhibitors and, most importantly, moviegoers.”
Universal is currently the only major studio to reach this kind of agreement with movie theater owners. Yet the arrangement with AMC and Cinemark means that two of the biggest movie theater chains in the country have conceded to the fact that the film distribution landscape will look very different when the world emerges from the pandemic. For decades, the topic of theatrical windows — industry parlance for the amount of time a movie plays exclusively in theaters — has been a controversial and hot-button issue.
Not all theater chains are ready to concede to a future that puts a bigger emphasis on digital.
Mooky Greidinger, the CEO of Regal’s parent company Cineworld, has been vocally opposed to such drastic changes to the theatrical window. In a recent interview with Variety before Cinemark’s deal was announced, Greidinger said he wouldn’t entirely rule out a similar agreement but attested that 17 days is “too aggressive and too short.”