By Tyler Aquilina
July 28, 2020 at 06:13 PM EDT
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AMC Theatres and Universal have struck a landmark agreement to resolve their dispute over video-on-demand releases, which will allow the studio to release its movies on VOD after just three weekends, or 17 days, of theatrical release in the U.S.

"The theatrical experience continues to be the cornerstone of our business," Universal Filmed Entertainment Group chairman Donna Langley said in a statement. "The partnership we've forged with AMC is driven by our collective desire to ensure a thriving future for the film distribution ecosystem and to meet consumer demand with flexibility and optionality."

The deal has major implications for the future of movie theaters, which have long required films to play on the big screen for at least 90 days before heading to VOD and digital platforms. In April, AMC announced it would no longer screen any Universal releases, after CEO Jeff Shell said the studio would release movies through theaters and VOD simultaneously in the future.

With movie theaters across the country closed due to the coronavirus pandemic, many studios have pivoted to VOD and streaming releases for certain films. Few, however, have embraced the strategy as wholeheartedly as Universal, which released The King of Staten Island on VOD in lieu of a postponed theatrical run and made several titles that had already played in theaters available on demand early.

"AMC enthusiastically embraces this new industry model both because we are participating in the entirety of the economics of the new structure, and because premium video on demand creates the added potential for increased movie studio profitability, which should in turn lead to the green-lighting of more theatrical movies," said AMC CEO Adam Aron, noting that "a considerable majority of a movie's theatrical box office revenue" is typically accrued in the first three weekends of release.

"Focusing on the long-term health of our industry, we would note that just as restaurants have thrived even though every home has a kitchen, AMC is highly confident that moviegoers will come to our theatres in huge numbers in a post-pandemic world," he added.

AMC, which was in danger of bankruptcy due to theaters' prolonged closures, recently announced a deal that will help the theater chain stay afloat through the end of the year. The chain also drew criticism for initially stating it would not require patrons to wear face masks when its theaters reopen, before changing course and announcing a mask requirement. However, with coronavirus cases spiking across the nation, it remains unclear when theaters will be able to safely open their doors to moviegoers.

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