Universal Pictures has succeeded in inking a pact with theater conglomerate Cinemark that sweetens its deal about shifting films faster from the big screen to video-on-demand.
Months before, when COVID-19 was in its initial stages of becoming a pandemic, Universal signed a pioneering deal with AMC Theaters that helped films shift to digital after a 17-day theater run as opposed to 90-day regular runs.
Under this deal, Universal Pictures is extending the same conditions of sending its films to digital platforms on rent, however, Cinemark has prioritized its conditions to keep their share and authority in the film business unscathed.
The theater company says films from Universal and Focus Features earning over $50mn in the opening weekend should run in theaters at least for 31 days (five weekends).
Those films would definitely earn more and thus, it would be better for Cinemark to make more profit directly from running them on the big screen for a longer time, which they deserve.
Films that don't make that cut within the first weekend are free to run for 17 days and then move to digital platforms for rented viewing.
As per the deal, 10% of the revenues generated from premium video on demand (PVOD) sale of the films are left for theater conglomerates Cinemark and AMC Theaters.
Of this chunk of 10%, Cinemark and AMC would each get 15-17% of the profits.
This amounts to about 2% of the total revenue from PVOD profit, which sounds like a fair deal.
An interesting aspect of this deal by Universal with both the theater chains is that each theater owner can run any film on the big screen for as long as it wants even after the said title has been shifted for PVOD entertainment.
This allows the audience to choose between the big screen and home viewing, thereby keeping the popularity of the title relevant.
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