Box office implications of AMC/Universal windowing deal
Much has been made of the deal struck between AMC Entertainment Holdings Inc. and NBCUniversal Media LLC's Universal Pictures that allows the studio to debut their films on premium video-on-demand within three weeks of their theatrical release. As part of the deal, AMC will receive a portion of the revenue from the premium video-on-demand, or PVOD, sales. Previously, exhibitors were holding fast to their exclusive 90-day window, but the COVID-19 pandemic has altered the landscape and given the studios some power to negotiate new terms.
The world's largest exhibitor agreeing to a shorter window with a major studio is certainly eye-opening, but it may not completely upend the decades-old release model as many are speculating. We analyzed the box office data for the 137 wide-release films released in 2019 and calculated the percentage of total box office through the first three weeks in release relative to its total domestic box office gross. The films took in 75.6% of their total box office in the first three weeks and the remaining 24.4% came over the remaining weeks. The 137 films averaged 11.4 weeks in theaters.
Looking at it in terms of box office dollars, the 137 films grossed $11.05 billion in total domestic box office. Those films grossed $8.35 billion in their first three weeks and an additional $2.70 billion over their remaining weeks in theaters.
The $2.70 billion seems like a significant portion of box office that may be in danger when considering the deal between AMC and Universal, but there are a couple of things to consider. First, just because a film hits the PVOD window does not mean that it will be pulled from theaters. The film will likely remain in theaters past the three-week mark and still bring in some ticket sales.
Second, Universal will probably not release every film on PVOD, especially their franchise films like "F9" and "Jurassic World: Dominion." The PVOD option is more likely to be used for low-grossing films and films that are not building solid box office momentum in the first three weeks.
We broke out the 2019 wide-release films by box office range, and the 36 films that grossed $20 million or less took in $355.5 million in total box office. These films grossed $312.7 million in their first three weeks in theaters, which is 88.0% of their total box office. They grossed just $42.8 million for the remainder of their theatrical runs while averaging just 7.8 weeks in theaters. The films that grossed $20 million-$50 million took in nearly $1.47 billion, and almost $1.15 billion of that came in the first three weeks. The remaining $319.2 million accounted for 21.8% of their total box office. These two box office ranges combined for just $362.0 million in post-three week box office, which is 3.3% of the $11.05 billion grossed by all 137 films.
Meanwhile, the 30 films that grossed more than $100 million at the domestic box office grossed a total of $7.45 billion. They took in almost $5.56 billion of that in their first three weeks in theaters, which was 74.6% of their total box office. They grossed $1.89 billion during the rest of their theatrical runs and averaged 16.5 weeks in theaters.
There were 36 wide-release films in 2019 that took in at least 90% of their total box office gross in the first three weeks of release. They grossed a total of $618.1 million and 93.1% of that, or $575.5 million, came in the first three weeks. They grossed just $42.6 million after that and were in theaters for an average of 6.8 weeks.
There were 45 films in 2019 that took in 80%-90% of their box office in the first three weeks. They grossed $3.97 billion at the domestic box office and $3.35 billion of that came in the first three weeks. They took in $611.9 million in their remaining weeks in theaters. There were several films in this range that were massive hits, including "Avengers: Endgame," which grossed $723.7 million of its $858.4 million total in the first three weeks.
This box office breakdown, we feel, shows that the portion of ticket sales at risk with the deal may not be as large as some may think — assuming that theaters eventually get back to normal in a post-COVID-19 world. It is also going to take more than just one theater chain and movie studio agreeing to a deal like the AMC/Universal deal to cause any kind of shift in ticket sales. Over the past 10 years, NBCUniversal's studios averaged a 14.3% box office market share and was only at the top of the studio market share ranking in one of those years — in 2015, when it captured 23.3% of the box office.
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