Theater Owners Chief on Universal's 'Trolls' On-Demand Play: "Exhibitors Will Not Forget This"

John Fithian expects most U.S. exhibitors to be closed for two months and hopes Congress will act to help the industry's 150,000 furloughed workers and keep cinemas afloat.

On Friday, amid unprecedented circumstances resulting from the coronavirus pandemic, new Hollywood movies were suddenly available to buy or purchase on premium VOD.

Historically, a major studio title isn’t widely available in the home entertainment space for around three months. Some studios have wanted to shrink the theatrical window for years, but theater owners have fiercely opposed such a move.

Now, it is a moot point, considering that virtually all of the 5,400-plus cinemas in the U.S. have closed amid the pandemic. And theaters could stay dark for at least six to 12 weeks, upending the 2020 release calendar, between release date and production delays.

John Fithian, chief of the National Association of Theatre Owners, says cinema owners have no issue with current releases moving up their digital release dates. But they are counting on studios to release their delayed event pics in theaters, versus going straight to home entertainment.

In an interview this week with The Hollywood Reporter, Fithian didn’t mince words when criticizing Universal’s decision to release DreamWorks Animation’s Trolls World Tour (April 10) direct to digital. Universal, at the same time, is still planning on a major theatrical push for F9, which has been delayed from May to April 2021, and summer tentpole Minions: The Rise of Gru, which has been taken off the calendar and is awaiting a new date.

Fithian also addressed the unprecedented theater closures — which are likely to last at least two months — and the call on Congress to provide emergency relief to theater owners and more than 150,000 furloughed workers.

A number of studios have announced that current releases in theaters — including Onward and Bloodshot — are being made available immediately on premium VOD. Aren’t you concerned that this will result in a permanent shift in consumer behavior?

No I am not. And here’s why: For those distributors who already had movies released in theaters that were playing when we had to shut down, we fully understand that they would need to accelerate their home releases. They had already put those movies in cinemas but cinemas had to shut down, so they made those faster moves to the home to try to monetize those movies, and to give people something to watch at home during this crisis.

Universal is going a step further in announcing that DreamWorks Animation’s April film Trolls World Tour will open day-and-date on premium VOD and in any theaters around the globe that remain open. Your thoughts?

Trolls World Tour is a very different story. For all the movies that had been scheduled for release during April and May, every other distributor announced delays to later times. But they still intend to release those delayed movies theatrically. Some of those delays have specific new dates [including Sony’s Peter Rabbit 2, which is now scheduled for August; MGM’s No Time to Die, which will open in November; and Universal’s F9 next year]. And some have been postponed for unspecified dates. But all of the movies with originally planned release dates in April and May, with the one exception of Trolls, will be released later theatrically, with full theatrical windows. All those other studios demonstrated their belief that the theatrical model is still essential to their business, they just had to delay release dates because of the virus.

How understanding are theater owners regarding Trolls?

Only Universal, and only on Trolls, did one studio skip the theatrical model and go straight to the home. Universal continues to advertise to consumers that Trolls will be released simultaneously to theaters and the home on April 10. And they are lying to consumers. Universal knows that theaters will still be closed on April 10, so unlike every other distributor who must simply delay their releases in that time period, but still understand that theatrical release is essential to their business model, Universal on Trolls didn’t make that decision. Exhibitors will not forget this.

Have studios otherwise assured theater owners that they won’t break windows, including with delayed event pics such as Disney’s Mulan and Paramount’s A Quiet Place Part II, which have been delayed but don’t yet have new release dates?

Yes, with the exception of Universal, every studio has gone overboard to reassure exhibitors that the theatrical model works for them, and that they look forward to releasing their movies theatrically once the virus is done. And every one of those studios called their exhibition partners and talked through their plans for delayed release before they announced them. Only Universal on Trolls undermined the theatrical model. And Universal told no exhibitor about their plans on Trolls until approximately 20 minutes before their announcement. Exhibitors know who their partners are. And every other studio has demonstrated true partnership and belief in the theatrical model during this time of crisis for all Americans, and indeed all moviegoers around the world.

How does the marketplace cope with a glut of product once theaters reopen?

It won’t be a backlog of product. It will be a good schedule of delayed releases. Some of the other movies scheduled for release later this year will be postponed because they can’t finish production. The virus isn’t just impacting theater operations, it is also impacting film production. So exhibitors are very pleased with the postponed theatrical releases of those movies that had finished production, because they will fill up the release calendar in the second half of the year, and give time for those delayed productions to finish, and then release theatrically later. Consider this: All moviegoers in America or Europe, or anywhere else for that matter, will go through two to three months of being cooped up in their homes. When this virus is over, people will seek desperately to get out of their homes, and to go enjoy the communal experience of going to the movies with their families and friends. They will thrill to share a collective experience watching movies together in our cinemas. It will be the greatest resurgence in moviegoing ever.

Are any cinemas staying open?

I don’t know of anyone who is staying open. Bu they aren’t shutting down their businesses, they just can’t operate. You have 150,000 employees who are hourly employees who are getting furloughed. Some companies are scrapping together ways to help them. To us, if Congress and the White House are going to help a gigantic industry like the airlines, which are huge major corporations with salaried employees — I’m not saying that the airlines shouldn’t be helped, but if we are at a state in this country where you are going to have loan guarantee and tax cuts for the airlines, shouldn’t they do it for a cultural institution like movie theaters, too?

People need to have chance to get out of their house and do something fun when this whole crisis is over, but we have to be around when it is over. We are just asking to be treated like the big guys. The first piece of emergency legislation is about employees, and that is great. Then a package of bills that deal with the businesses that are in trouble. The one mentioned by the White House most often and [Treasury] Secretary Steve Mnuchin is apparently pushing for is the airline industry. I’m not criticizing the airline industry for asking for help, but they aren’t shut down entirely and are still making some money. We are shutting down completely.

Has there been another time in motion picture history when cinemas shut down like this?

I have spoken over the past three or four days with dozens and dozens people of who run movie theater companies, from CEOs who run gigantic companies to third-generation exhibitors who run a small company to everyone in-between. Everybody in this business, this is the most challenging thing they have been through. We have had periods of bad product when we don’t sell that many tickets, periods of short-term impact like 9/11, or a natural disaster.

You don’t have to get on a plane to go to a cinema. You don’t have to pay what you pay for a sporting event. We are affordable and local. You don’t have to pay what you do for a professional sporting event. It is a very resilient industry. But when you shut down, you have to shut down. And the problem with shutting down is that you have fixed costs. You have rents or mortgages or lots of other things like that that don’t go away. You go from full blast to having no revenue in a blink of an eye.