AMC, Regal Cinemas fight with Universal Pictures

Yahoo Finance’s Alexis Christoforous, Brian Sozzi, and Dan Roberts discuss AMC Entertainment and Regal Cinema’s recent backlash to Universal Studios’ announcement to continue with rental releases of films.

Video Transcript

BRIAN SOZZI: Now Universal Studios' decision to release "Trolls World Tour" for rental enraged AMC theaters, and now Regal Cinema is getting in on the action too. Both AMC Entertainment and Regal Cinemas are threatening to boycott Universal's movies from its screens after Universal parent NBC said the company is going to continue releasing movies on rental at the same time that films are released on the screen.

Yahoo Finance editor at large Dan Roberts is here to discuss. Dan, lots going on here.

DAN ROBERTS: Yeah, absolutely, Brian. I sort of love this story. I think it's an interesting back and forth. And it's interesting on Twitter too to see which people side with which group here. I mean, I think there's sort of some fair points on both sides because the movie theaters say, look, we sort of had this agreement in place already that there is a window. It's all about the window. And the window is your movies go in theaters first.

Now, of course, there's always in the industry been some movies that get released straight to DVD or straight to streaming, but those are lesser movies. A movie like "Trolls World Tour" was supposed to be in theaters, and it was probably a movie that would have done very well in theaters, but that was precoronavirus. So AMC came out swinging against Universal, and now the CEO of Cineworld, which is the owner of Regal, saying we're not going to show movies that don't respect the window.

And I think a little bit the movie theaters, you know, they're being a little overly defensive here. You know, they're kind of out over their skis because we were talking just yesterday on this show to Gitesh Pandya of the website Box Office Guru, and he was pointing out just because of the success of "Trolls" with rental during this time, that doesn't mean that movie theaters are going to be dead now. Movies will always go straight to streaming, and fewer movies will go into theaters. I mean, if and when we come back to normal, presumably people will still go see big, big blockbuster movies in movie theaters.

Of course, yes, movie theaters were already struggling in some regards, but certain types of movies still kill at the box office, and that still is going to be the case. So I think movie theaters just kind of are grandstanding a little bit, but they have to because they have to look like they're defending the status quo, the way things work. There's a window. Respect the window.

ALEXIS CHRISTOFOROUS: Dan, also yesterday we spoke with Gitesh about the Oscars changing their rules. And now in order to be even a candidate for an Academy Award, the film could go right to streaming. It doesn't have to be in the theaters. I'd imagine that's just another black eye to the theaters, especially if that is sort of a taste of what's to come.

DAN ROBERTS: For now, that new rule, that new allowance is just for the calendar year 2020, which I think is a reminder that, for now, these changes and this trend is just a coronavirus thing. So I don't know that it necessarily spells the end of movie theaters.

Maybe I'm a little biased because, personally, I love to go to see movies in movie theater. You know, occasionally you see people saying, all right, sure. This time is just going to hasten the death of theories. That's fine. You know, screw theaters. I don't feel that way. I think movie theaters are kind of an important cultural entertainment institution.

Now that said, we will see some more movies during this time released straight to streaming, just like we're also seeing some movies released earlier for rental than they would have been. You know, Disney has put some movies on Disney+ sooner than it was going to, and that just makes sense. I think that's smart business right now. I don't think we can take that and extrapolate and assume that that'll be the new normal once the economy and overall the US reopens.

BRIAN SOZZI: Dan, quick one for you here. Do you think Universal and AMC kiss and make up?

DAN ROBERTS: I think they have to. I think they have to, Brian. Again, I think movie theaters kind of have to be talking this tall talk right now and kind of-- you know, they're talking their book, as the phrase goes.

But once things are back to normal, what are they going to do? Are they really going to say we're not going to show any Universal movies? It's a little bit of grandstanding. And interestingly, IMAX, by the way, also came out today, had a very bad quarter. But IMAX said, you know, things are going to be back to normal at some point. So that's all they can say for now.

BRIAN SOZZI: So true. All right, Dan Roberts, thanks so much.