Shortened PVOD window drew boycott threat from theater owners

It’s clear that Universal gave in to exhibitors’ pressure when it announced Wednesday that it was scrapping plans to make “Tower Heist” available via premium video-on-demand just three weeks after its theatrical release. What wasn’t quite clear is which exhibitors, or what kind of pressure.

Though Cinemark (3,825 screens) and National Amusements (450) openly stated their intentions to boycott Universal’s PVOD gambit by refusing to show “Tower Heist” in their theaters nationwide, the total number of screens those companies represent — about 11% in the U.S. — would not have made enough of a dent at the box office for U to back down for that reason alone, sources tell Variety.

That means at least one of the nation’s top two chains, Regal and AMC, likely was bringing its own heat.

Universal declined to comment further to Variety, including regarding inquiries about what, specifically, prompted its strategic U-turn. Studio had been in talks with exhibs going back two years, and Adam Fogelson, along with U’s distribution team, and Comcast reps spearheaded discussions in closed-door conversations with top theater chains after Cinemark’s threat. But it wasn’t known Wednesday to what extent their input influenced the final outcome.

Cinemark, the third-largest theater chain behind Regal and AMC, has always been particularly adamant about maintaining theatrical windows. No surprise, then, that the Plano, Tex.-based company reacted swiftly and sternly last week after Universal outlined plans to rent “Tower Heist” to Comcast digital subscribers in Portland and Atlanta for $60 over the Thanksgiving holiday, just three weeks after the Ben Stiller and Eddie Murphy caper opened wide on Nov. 4.

By late morning on Oct. 7, Cinemark made its boycott plans known.

Though the exhib declined to comment further after U’s change of heart, the National Assn. of Theater Owners responded with gratitude on Wednesday.

“NATO would like to thank Universal for responding to various theater owners’ concerns and canceling the PVOD test it was contemplating,” president and CEO John Fithian said in a statement. “They have been engaged with individual exhibitors on this test, and while it was something that many theater owners could not ultimately support, the open and collaborative nature of the dialogue is appreciated.”

That tone is a major shift from back in March, when Variety first reported on wider PVOD plans by four studios: Warner Bros., Sony, Universal and 20th Century Fox. A major complaint at the time from exhibs was that they were not informed or engaged in any way. Universal apparently took to heart the issue of communication, with Regal noting the improved outreach Wednesday:

“Over the past year, as various Premium VOD models have emerged, Universal has consistently sought Regal’s opinion on these ideas,” Regal CEO Amy Miles said in a statement Wednesday. “We appreciate Universal seeking and giving consideration to Regal’s input, particularly with respect to Universal’s evaluation of a strategy for a potential Premium VOD test related to the release of ‘Tower Heist.’ We understand and respect Universal’s interest in finding a successful model for ancillary markets and we remain willing to assist Universal, and our other studio partners, in developing a strategy that is acceptable and productive for both parties.”

Though Universal effectively killed its “Tower Heist” plan with Wednesday’s announcement, it left open the possibility of future early PVOD launches. In fact, the studio characterized the development as a “delay” to its PVOD experiment.

“Universal continues to believe that the theater experience and a PVOD window are business models that can coincide and thrive and we look forward to working with our partners in exhibition to find a way to experiment in this area in the future,” the statement read.

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