Why ‘The Croods: A New Age’ Could Test a Shorter Theatrical Window

With “No Time to Die” and “Dune” abandoning their 2020 release dates and Regal Cinemas closing their locations again, the outlook for the theatrical market is looking increasingly bleak. But DreamWorks Animation’s “The Croods: A New Age” might press forward and give AMC Theatres and Universal a chance to test a tightened window between theatrical and at-home release. This past summer, a simmering conflict between Universal and the nation’s largest chain led the two sides to try something the film industry has never tried before: shorten the exclusive theatrical window to three weekends, after which Universal has the option to release its films on premium video on-demand. As part of this deal, Universal must give advance notice when they choose to exercise the early PVOD option, and AMC will receive a share of the profits on those PVOD sales. It’s a major change from movie theaters’ staunch defense of the 90-day theatrical window, and it is still uncertain whether other studios and chains will follow suit. But with the pandemic putting the squeeze on theaters, they need all the titles they can get. AMC could especially use the money, as S&P downgraded its debt rating last week and estimated that the chain only has about six months’ worth of liquidity remaining. However, in a statement on Tuesday, AMC CEO Adam Aron said that the Universal deal “puts AMC in a position where we can open our theaters when others may feel the need to close,” referencing the decision by Regal Cinemas to close nationwide following the move of “No Time to Die.” That makes now as good a time as ever to give the theatrical window deal a test drive. For Universal, a theatrical release on Thanksgiving would give them the opportunity under this deal to release the film as a PVOD title around Christmas, when family interest in watching movies is expected to increase. Universal was able to find great success releasing “Trolls: World Tour” on PVOD this past spring and could likely tap into that same audience in December. The studio declined to comment for this story. As for AMC and other theaters, they would get some key information that it lost when Disney moved “Mulan” to PVOD: How confident are families about theater safety? “So far, we’ve only seen films released since the reopening that appeal to a limited part of the moviegoing audience,” Exhibitor Relations analyst Jeff Bock said. “‘Croods’ could give theaters and studios more information about what the market is looking like in this pandemic, and it would give chains another chance to market the safety protocols of their theaters to the public.” Of course, “Croods” alone will not be enough to make a meaningful dent in the financial struggles theaters are facing. As was seen last month with “Tenet,” one film alone can’t bring audiences back to theaters. A variety of films are needed to suit the interests of a wide range of moviegoers. The problem is that the pandemic has made the kinds of films that studios feel comfortable trying in theaters very limited. While the $200 million “Tenet” was released last month in large part because director Christopher Nolan wanted to provide a film for theaters to screen, films with similar budgets like “Black Widow” and “Dune” have moved because studios simply can’t risk releasing those films without certainty that audiences will show up. The same is true for adult dramas, as the older demographics that serve as the film’s core audience are staying away from all businesses as they are in a higher risk group of contracting and dying from COVID-19. While “Croods: A New Age” isn’t exactly a cheap film — most DreamWorks Animation films have an estimated budget in the $80-90 million range — the PVOD option gives the studio a better chance to return a profit. AMC has not disclosed exactly what their PVOD profit-sharing agreement with Universal entails, but if they are able to demonstrate that the deal provided much-needed profits to extend their liquidity, it may increase the chances of similar window-shortening deals being made between studios and theaters. But outside of this one film and the unique partnership attached to it, the state of the theatrical market this quarter remains very murky. For now, AMC and Cinemark have said they plan to keep their theaters open, with a mix of “Tenet,” new indie releases and classic films being shown on their screens over the next six weeks. But after that, it’s unclear what other major releases will still commit to a 2020 release. Disney and Warner Bros. have yet to announced a decision for “Soul” and “Wonder Woman 1984” following the split decisions on closing by the national chains, while “Coming 2 America,” “Death on the Nile” and “News of the World” still remain on the December slate. If the U.S. is able to buck epidemiologists’ expectations and keep COVID-19 contained in the coming months, theaters might still have a chance of salvaging the holiday box office season. But if it goes like the rest of the pandemic has gone, the Croods could stand alone.