LOS ANGELES — Universal Pictures said on Monday that it would no longer give theaters an exclusive period of roughly 90 days to play new movies, a break with longstanding Hollywood practice that could have wide-ranging reverberations. The decision, prompted by the coronavirus pandemic and likely to anger theater owners, makes Universal the first old-line studio to become more like Netflix in its approach to film distribution.
“We hope and believe that people will still go to the movies in theaters where available, but we understand that for people in different areas of the world that is increasingly becoming less possible,” Jeff Shell, the chief executive of NBCUniversal, said in a statement.
At least some competing studios are likely to follow. Executives across Hollywood saw the move by Universal as an opening to experiment with a pay-per-view model that would allow consumers to gain immediate or near-immediate access to new movies in their homes for a premium price.
Starting Friday, three Universal movies that have already been released in theaters will become available in homes — for $20 for a 48-hour rental period — through online stores like iTunes and Amazon Prime Video and on cable systems like Comcast, Universal’s parent company. Those films are “The Hunt,” a horror satire that arrived in theaters last weekend; “The Invisible Man,” which has been playing in theaters since Feb. 20; and “Emma,” a new take on the classic Jane Austen novel that arrived in theaters on March 6.
The studio’s animated sequel “Trolls World Tour” will roll out in theaters worldwide — those that are open — on April 10 and will be made available simultaneously for rental in homes for $20. To compare, the average price of a movie ticket in the United States is $9.16, according to the National Association of Theater Owners. Standard movie tickets cost $16 to $18 in cities like New York and Los Angeles, and IMAX screenings run about $22.
The association did not respond to a request for comment on Universal’s move. Neither did AMC, the largest chain in the United States. But in a sign of the challenging environment, the owner of Regal Theatres, the second-largest chain, said that beginning Tuesday it would be shutting down its 542 theaters with a total of 7,155 screens.
Universal stopped short of saying that every other film on its release calendar would get the same home rental treatment, but an executive at the studio said it was a possibility, depending on market conditions. Beyond “Trolls World Tour,” Universal films include Jon Stewart’s “Irresistible,” scheduled for theatrical release on May 29; Judd Apatow’s “The King of Staten Island,” slated for June 19; and “Minions: The Rise of Gru,” on the calendar for July 3. What had been the company’s most likely theatrical blockbuster this year, the ninth iteration of the “Fast and Furious” series, has been postponed until April 2021.
Comcast has been eager to shorten or eliminate the exclusive period given to theaters for some time, in part because it would allow the company to reduce marketing costs. (Studios currently mount separate campaigns to support the arrival of films in theaters and then later in homes.) Such a move would also lift Comcast’s core cable division and, perhaps, help the company’s upcoming streaming service, Peacock, gain traction in the marketplace.
With as much as 80 percent of premium video-on-demand revenue going to studios, movie executives see a new engine to compensate for sputtering DVD sales. Studios are also aware that consumers have been impatient about being unable to see all movies whenever and wherever they want.
Netflix has already been chipping away at the exclusivity model. The streaming giant is devoted to keeping its subscribers happy, meaning that most of its movies make their debuts on the service itself. Netflix tiptoed into the theaters in 2018, offering Alfonso Cuarón’s “Roma,” which went on to win three Oscars, a 21-day exclusive release at independent and small-chain theaters before it started streaming. Netflix took a similar approach more recently with Martin Scorsese’s “The Irishman” after talks with theater owners collapsed.
In the past, Comcast has also faced fierce opposition from multiplex chains like AMC, Regal and Cinemark. In 2011, Universal abandoned a plan to make “Tower Heist” available on V.O.D. — for $60 — three weeks after it arrived in theaters after the National Association of Theater Owners refused to play the film at all.
For Autumn de Wilde, the director of “Emma,” which has made $10 million in U.S. theaters, the move to the home is bittersweet. “This is a movie theater movie,” she said in an interview from London, where she’s trying to get home to Los Angeles. “I spent a lot of time on color and design and music and sound and I wish this movie could stay in theaters and people could go. But I do think it’s a good thing, what Universal is doing. We need to keep people sane at home and give them a place to escape to. ‘Emma’ is a great escape movie.”
Most movies still arrive the same way they have for decades. They appear first in theaters, for an exclusive run of about 90 days, and then in homes. Theater chains, including AMC, Regal and Cinemark, have fought off efforts to shorten the exclusivity period. They worry that people will be reluctant to buy tickets if they can see the same film on their living room television set or iPad screen just a few weeks (or days) later.
The theater chains have long contended that once studios are allowed to speed new films into homes there will be no going back. But they may not be able to hold the line any longer.
Ticket sales in North America fell to an all-time low over the weekend, after adjusting for inflation. Mayor Eric Garcetti of Los Angeles announced Sunday that all movie theaters in the city would be shut down until March 31. New York City will follow suit beginning Tuesday. Mayor Bill de Blasio of New York did not give an end date to the closings. The two mayors’ actions follow closures by local authorities in counties in Pennsylvania and New Jersey.
AMC said on Monday that it would curb admission to 50 people per auditorium nationwide in an effort to remain open where possible.