The Distribution lifespan for UNIVERSAL PICTURES movies starting in 2022

OVERVIEW: This AMAZON deal is an adjustment from the news in the UNIVERSAL PICTURES / PEACOCK output deal announced earlier in July.

SAME: UNIVERSAL PICTURES Movies will still go to PEACOCK exclusively for 4 months, premiering there no more than 4 months after their theatrical release date.

NEW: After that 4 month PEACOCK exclusive run is over, UNIVERSAL Movies will now go to AMAZON PRIME exclusively for 10 months.

• Previously, the UNI movies were going to also stay on PEACOCK in that 10 month window non-exclusively, where another service could have paid to also stream them. But now, they’ll be AMAZON ONLY for that 10 months.

After the AMAZON 10 month window, the movies will go back to PEACOCK exclusively for the final 4 months of the initial “PAY 1” 18 month window.

NOTE: All of this is for US only - UNIVERSAL can still sell off the international streaming rights - gotta give AMAZON the advantage here I’d think…

• Unless: COMCAST CEO Brian Roberts is looking to make PEACOCK an international thing in the next few years, or wants to give a huge boost to COMCAST subsidiary SKY, giving them at least the European streaming rights. More to come on this front for sure.

$$ DETAILS: Nothing official, but according to the WSJ piece (links to all coverage at the bottom) AMAZON will be paying about $2 Billion over the life of the deal, which has no stated duration. And yeah that’s kinda weird - speculation is 3 years but 🤷‍♂️. But it does start with 2022 UNI releases for sure.

Worth noting the exact final payment on these PayTV window deals usually correlates to how the Movies did at the US Box Office, so consider $2 Billion a rough estimate.

UNIVERSAL PICTURES LIFESPAN OVERVIEW

UNIVERSAL (including FOCUS and BLUMHOUSE) movies will roll out in the US come 2022 as such:

• Movie hits theaters.

• 17-45 days after release date in theaters (depending on how well it does at the box office) Movie then goes to PVOD for streaming rental at home (PVOD - renting the movie at home for $20 via iTunes, Google Play, Cable VideoOnDemand etc). Movie can/will still continue to play in theaters during this time.

• 4 months (or less) after its theatrical release date, Movie will premiere / stream on PEACOCK exclusively for 4 months.

• 8 months (ish) after theatrical release date, Movie will then exclusively stream on AMAZON PRIME for a 10 month period (again, Movie will now no longer be on PEACOCK in this window).

• 18 months / 1.5 years (ish) after theatrical release date, Movie will go back to PEACOCK exclusively for 4 months.

• 22 months (ish) after theatrical release, UNIVERSAL will sell rights to TV/cable networks, and other streaming services.

EXCEPTIONS:

• Movies produced by AMBLIN: They already have a separate SHOWTIME PayTV output deal (it starts in the traditional 8-10 month post-theatrical PayTV window that’s existed for years). So they won’t be involved in any of this (includes Spielberg’s upcoming semi-autobiographical movie).

• DREAMWORKS Animated movies (“How to Train Your Dragon” etc): HULU has an existing PayTV window deal for DW Animation pics since 2019. Obviously COMCAST owns 1/3 of HULU so… not exactly sure how this one’s gonna shake out tbh.

• New ILLUMINATION Animated movies (“Minions” etc): Also a somewhat unclear aspect, or at least I’ve seen reporting both ways on if these are included. It may just be older library ones (“Despicable Me” etc), or it may be ones releasing in 2022 onward like the UNIVERSAL pics.

  • NETFLIX currently has an ILLUMINATION output deal but it ends this year. Word in the DEADLINE coverage was they’re trying to extend it so ILLUMINATION movies come to them instead of AMAZON in that 10-month window period… the LA TIMES but ILLUMINATION rights as up for grabs, but really the reporting is kinda all over the place on this aspect so - dealers choice. AMAZON will get some ILLUMINATION titles, just a question of how new they’ll be.

ALSO:

• AMAZON’s free/AVOD streaming service IMDBTV signed a deal for the exclusive streaming rights to UNIVERSAL movies released last year and this year. Or what’s known as the Cable-Broadcast TV window, which basically begins 2 years from a movie’s theatrical release date. So - their 2020 movies should begin hitting IMDBTV the early part of next year. (“The Invisible Man”, “Dr. Dolittle” etc), and the rest will hit IMDB as they cross their 2 year-post theatrical release date mark (“Freaky”, “F9”, etc).

OK YOU’RE UP TO SPEED ON UNIVERSAL.

NOW HERE’S A LOOK AT THE RESULTING BIGGER PICTURE if you have an extra 2 mins and the interest

WHY IS AMAZON DOING THIS? Well, it certainly shows the AMAZON checkbook has a few more checks in it under new CEO Andy Jassy.

AMAZON already has one of, if not the deepest movie library of all streaming services, even without the impeding MGM deal. Obviously they see strength in this as a retention tool, just as HBO has for many years: while people signed up for “The Sopranos” and “True Blood”, most viewing time was spent on movies by far once they were there.

PLUS: Movies play well globally vs Series which can have more regionality in terms of appeal, and I’d venture Movies also have a higher re-watch engagement. The ILLUMINATION aspect also gives them high profile family movies (“Minions” franchise etc) - something their MGM deal is lacking.

AMAZON obviously has free-shipping to get people in the door (outside of “Mrs Maisel”), so they see a robust and now (somewhat) current movie library playing a key role in keeping people happy, which is what AMAZON is all about. Unless you work there.

WHAT’S NEXT OUT THERE? : Well everyone’s eyes are on VIACOM CBS - but with PAR+ newly launched and hitting close to 40 countries by the end of the year, gotta think Shari Redstone isn’t on the edge of her seat to sell at the moment… despite media pundits looking to push that kind of speculation in the SUN VALLEY conference this week. And who knows who the buyer would be:

• COMCAST is unlikely despite chatter to the contrary - CBS would have to be sold (or NBC), a lot of divisional redundancy (2 news organizations, 2 major movie studios, etc), COMCAST has sizable debt from buying SKY and overall has yet to express real global ambitions in streaming. They are a US focused company… that also owns SKY.

• AMAZON I guess could be a buyer at some point… obviously they have the cash. But the MGM deal has to get done and that is gonna face regulatory scrutiny/drag on into 2022 before they could even contemplate it.

• APPLE also certainly has the cash… but has yet to see the value in having library content. And - at its core VIACOM is still a cable TV network company, something I’m sure APPLE has no desire to touch whatsoever.

• FACEBOOK / GOOGLE don’t seem to have much interest in entering this fray - they’re making too much cash as it is.

• WARNER DISCO - Impending CEO David Zazlav certainly has huge ambitions… but this WARNER MEDIA / DISCOVERY deal won’t be official for at least another year before they can even contemplate incorporating another company like the size of VIACOM.

• TBD INTERNATIONAL BUYER - Always a possibility.

WHAT’S LEFT? 2 sizable acquisitions then remain in the landscape. Well 3 if you count SONY but they seem pretty set with their current course and lucrative new output deals. So that leaves:

• AMC NETWORKS, who would probably sell for a highly inflated price if it was on the table, but otherwise seems content to do what they’re doing.

• LIONSGATE (also owner of STARZ) which the money seems to be on at the moment as the most viable candidate, but again - who’s buying? Most immediate Wildcard would be VIACOMCBS - if only because everyone else seems to need to wait until mid 2022…. til their 2021 deals go thru.

And there you have it - Never a dull moment in the media business. Except late August, that’s always pretty quiet.

-Sean McNulty (always for sale)

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LINKS TO AMAZON DEAL INDUSTRY TRADE COVERAGE:

• DEADLINE

• WSJ

• THR

• VARIETY