The coronavirus pandemic continues to flip the script on Hollywood.
With virtually all movie theaters in the country closed and studios beginning to experiment with straight-to-streaming releases, show business is changing right in front of audiences' eyes. On Tuesday, two seismic shifts hit the entertainment capital of the world, affecting three of its most storied institutions: The Oscars, AMC, and Universal Pictures.
On Tuesday, the Academy of Motion Picture Arts and Sciences announced sweeping changes to next year's Oscars ceremony to better reflect the state of moviegoing mid the pandemic. The Academy's Board of Governors gathered in a secure Zoom meeting to vote on new measures recommended by the body's rules committee.
Now, movies will no longer need to screen in Los Angeles theaters for the previously required one-week window in order to compete for Oscars. Instead, all films with previously scheduled theatrical releases are eligible, even if they are released on streaming platforms before they hit the big screen.
The move speaks to the movie industry's new reality: With no movie theaters open to release moves in, a growing number of studios are pushing their titles to a Premium Video On-Demand model. So far, the practice has been limited to blockbuster and family-friendly movies typically released in the spring (see: Trolls: World Tour) But with theater closures possibly extending deeper into the summer and fall, awards hopefuls released toward the end of the year might not have theaters to premiere in either.
Essentially, the Academy had to make this move if it had any hopes of staging the 93rd Oscars on February 28, 2021. But it's still a major concession for a body whose reluctance to embrace the streaming revolution has been on full display as recently as this year when the Netflix film The Irishman lost all 10 awards for which it was nominated, as streamers and theaters battled over what constituted an appropriate exclusive theatrical window.
The Academy stressed that these rules only apply to next year's Oscars and will revert to the previous state of play once movie theaters are deemed safe enough to reopen. But when they do, it's unclear whether at least one major studio will be on the marquee.
On Tuesday, AMC Entertainment, the nation's largest theatrical exhibitor, banned Universal Pictures from showing movies in its cinemas following comments made by NBCUniversal CEO Jeff Shell regarding the paradigm-shifting release of Trolls: World Tour.
In an interview with The Wall Street Journal, Shell remarked on the commercial success of the animated sequel, saying, "The results for 'Trolls World Tour' have exceeded our expectations and demonstrated the viability of PVOD. As soon as theaters reopen, we expect to release movies on both formats."
According to Universal, animated family film brought in over $100 million in revenue after it became one of the first high-profile releases to break a studio's theatrical release window when it was made available for $19.99 on-demand on the same day it would have debuted on the big screen.
Shell's willingness to continue releasing movies simultaneously in both formats, even after the pandemic ends, did not sit well with AMC Entertainment. Following the WSJ article, AMC CEO Adam Aron released an open letter announcing that Shell's words left his company with "no choice" but to stop screening Universal's movies on AMC screens around the world, effective immediately.
At first glance, the back and forth has all the trappings of public posturing ahead of what are sure to be contentious negotiations. But with AMC currently generating zero revenue with all its theaters closed, and Universal proving the viability of the PVOD model, there's a significant imbalance of leverage heading into any potential conversations.
Regal Cinemas, the world's second-largest exhibitor, announced on Wednesday that it too will not show movies that "fail to respect the [exclusivity] windows." In a statement, Cineworld, the parent company of Regal, released a statement that named Universal specifically and read in part, "Universal’s move is completely inappropriate and certainly has nothing to do with good faith business practice, partnership and transparency."
Universal isn't the only studio taking the on-demand route. Warner Brothers and Disney have each followed suit, pushing the upcoming Scoob and Artemis Fowl to streaming releases later this year. No word yet on if AMC is planning on taking similar action against those power players too, but if it does, it won't have that many movies to show once theaters do reopen.
Updated April 29, 2020 to include statement quote from Cineworld.
