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The power struggle of the film studios with the cinemas

The power struggle of the film studios with the cinemas

[09:42 fri,8.May 2020   by ]    

The corona crisis and problematic situation of film studios and cinemas is currently exacerbating another conflict that has been smouldering for some time: that between studios and cinemas. Because the large film studio Universal reacted to the cinemas closed by the Corona crisis and burst film premieres with an innovation: the first online film premiere and made the film accessible to all viewers (worldwide??) via Premium Video-On-Demand (VOD).

Universal had a huge success with the VOD premiere of "Trolls World Tour": with 100 million dollars in revenues in three weeks, the film was even more successful than the first Troll film at its cinema premiere in 2017. Even before that, Universal had already released several films ("The Invisible Man," "Emma" and "The Hunt") via VOD. For film studios, an online premiere has a great financial advantage, since they don&t have to share the income for a film with the cinemas, because - roughly estimated - the studios get about 55% of the income per cinema release, but about 80% of the money per VOD.

Cinemas feel that this is a major attack on the previous rule of cinema exploitation - first a new film is released in cinemas, then it is released online or on DVD/Blu-ray. Due to the temporary exclusivity (usually 3 months) of a new film, cinemas can expect large revenues, which would be greatly reduced if a new film is also shown online at the same time. Then, viewers who want to see a new film would have the choice between the relatively expensive cinema experience (between 8-18 Euros per ticket) for a big Hollywood blockbuster and the home cinema on a TV or even big via beamer for only about 15 Euros (for 48h)- with as many viewers as fit into the living room. This would be a financial blow for cinemas, as the premieres of new films in particular attract a particularly large audience and thus generate large revenues.

Trolls World Tour

Universal feels encouraged by this success and announces that in the future, after the Corona crisis, it will continue to offer films for release online (parallel to the cinema release). As expected, this has led to a big outcry of the cinema operators and the accusation that the Corona crisis is only being used for a long-planned shift of power. In response to this, the world&s largest cinema chain AMC, with around 1000 cinemas, has now announced to www.indiewire.com/2020/04/amc-universal-movies-ban-1202228026/ that it will boycott Universal films in the future - the second largest (Regal) has now joined this step - both fear for their business, especially if other studios do the same to Universal. After all, according to AMC&s CEO, the other studios have promised to return to the old rule - the exclusive film exploitation window for cinemas - after the reopening of the cinemas. Universal, on the other hand, wants VOD and cinema film premieres to take place in parallel.

It is difficult to estimate how successful a VOD film premiere will be when the cinemas are reopened and offer an alternative for many viewers again, and how parallel cinema and VOD exploitation will ultimately affect the box office results of a film compared to the classic model (first cinema, then further exploitation). In any case, the American cinema association NATO (National Association of Theatre Owners) assumes that the PVOD success of "Trolls World Tour" is mainly due to the exceptional situation of Corona.

Another development is not likely to please the cinemas either: Due to the Corona crisis, the Academy of Motion Picture Arts and Sciences will make an exception to the iron rule that films must have been shown in the cinema for at least 7 days before they can be awarded an Oscar. This is an understandable move, since many planned theatrical releases could not take place due to the cinema closures and the schedule will probably be too tight to make up for all releases - should the cinemas even reopen in the foreseeable future. In addition, there will probably be significantly fewer films than usual this year due to the many cancelled or postponed film productions. The cinemas also have to fear that the new regulation will continue to apply after the crisis has passed - after all, it has already been undermined in recent years by the major streaming providers such as Netflix and Amazon ?? who wanted to nominate their own productions for the Oscars and therefore even had them shown pro forma in selected cinemas.

When and under what conditions (only with mouthguards? 1.5 meter distance between seats?) cinemas in this country can reopen is still in the stars.

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