Karma Is A God: Hollywood Studios Underestimated Taylor Swift And Are Losing Out On Millions

Taylor Swift isn’t just shaking it off: she’s shaking things up in Hollywood with a bombshell deal that has reportedly left studios seething. The pop icon is bringing her “Eras Tour” concert to theaters on October 13, and has made the radical move of cutting out the middleman — a Hollywood studio distributor like Disney, Paramount, or Universal— and making a deal directly with AMC Theatres to distribute the film on its screens, while also distributing in other theaters via a sub-distribution deal with Variance Films.

Here’s why this is such a big deal. Traditionally there are three parties involved in bringing movies to theaters: the producer, the distributor, and the exhibitor. The first two are often housed under the same roof; for example, Disney owns Pixar Animation Studios (a production company) and also distributes Pixar movies by making deals with exhibitors (theaters). Box office ticket sales are then split between the exhibitors and the distributor, with the studio usually taking a bigger cut of opening weekends, and theaters taking a larger percentage later on in a movie’s theatrical run.

Up until recently, there was a sharp dividing line between movie studios and theaters: studios were not allowed to own movie theaters, due to a landmark antitrust decision in 1949. But this decision was overturned in 2020, which means that Disney could now theoretically launch a chain of Disney theaters, and an exhibitor like AMC can get into the distribution game.

So, when the Swift family found Hollywood’s studios seeking to control the when and where of “Eras Tour” hitting theaters (as is typical of a movie release), they instead turned to AMC Theatres, saying: “I’ve got a blank space, baby, and I’ll write your name.”

‘Cause baby, now we got bad blood
AMC Theatres Distribution
Intentionally or not, this is a power move, and studios are reportedly angry about it. None of them have really capitalized on the opportunity to own their own movie theaters yet; they’ve been too focused on launching their streaming services, especially after the COVID-19 pandemic had everyone declaring that the cinematic experience was dead. But movie theaters rose up from the dead (they do it all the time) and have had a triumphant return this summer thanks to the twin powerhouses of “Barbie” and “Oppenheimer.”

As we head into the fall and winter months, however, movie theaters have found themselves being screwed over by studios yanking movies from their release dates. Why? Because Hollywood’s writers and actors are on strike, which means they can’t promote new releases, which is going to hurt those new releases at the box office. And rather than move to resolve the strikes quickly, the studios have decided to take the financial hit of slicing and dicing 2023’s release slate — a hit that theaters are forced to take right along with them, despite having nothing to do with the strike negotiations.

There’s an extra sting to this: movie theaters still have scars on their backs from the knife of studio decisions during the pandemic — for example, Warner Bros. giving day-and-date releases to its entire 2021 theatrical movie slate on HBO Max, a scheme to boost subscribers that undoubtedly cut into box office ticket sales. Studios have also leveraged the pandemic to make shortened theatrical release windows (45 days or even less, instead of the traditional 90 days) a permanent fixture instead of a temporary one for smaller films.

As the gatekeepers of major movie releases, studios hold a lot of power in this relationship. But, as it turns out, they don’t hold any power over Taylor Swift.

Romeo, take me somewhere we can be alone
AMC Theatres Distribution
Taylor Swift has very supportive parents, and they’re not just supportive in the sense of giving big hugs and cheering at her concerts. Her mother, Andrea Smith, is a former marketing manager, and her father, Scott Swift, is a stockbroker turned financial advisor whose career at Merrill Lynch blossomed into him founding the Swift Group, a wealth management group underneath the Merrill umbrella. In other words, the Swifts have a lot of money and a lot of business savvy to throw around.

According to a report by Puck News, the Swift family hired director Sam Wrench to shoot “Taylor Swift: The Eras Tour” for a budget of around $10-20 million, and were directly discussing distribution with studios. However, at least one distributor was thinking of a 2025 release, long after the live tour had ended, and the Swifts wanted it to play in theaters alongside the tour. So, they began negotiating directly with AMC Theatres CEO Adam Aron, put together a deal in secret over a number of weeks, and announced it without any of the studios getting a heads-up.

IndieWire reports that there’s “major anger” at the studios over being blindsided by this news. According to Puck News, Universal Pictures is “extra-pissed.” Not only was the studio considering picking up “Taylor Swift: The Eras Tour” for distribution, it’s now had to move “The Exorcist: Believer” off its cool horror release date of Friday the 13th of October, to avoid getting crushed under Taylor’s kitten heel.

Haters gonna hate, hate, hate, hate, hate
Universal Pictures
After the theatrical release of “Taylor Swift: The Eras Tour” was announced and ticket presales began, the first thing that happened was Taylor Swift fans crashing AMC’s app in their rush to see the concert film on the big screen. The next thing that happened was those same Swift fans breaking AMC’s single-day ticket sales record in just three hours, and setting a new record of $26 million. With major releases like “Dune: Part Two” getting moved out of 2023 to next year, the showings should be a welcome oxygen mask for AMC and other exhibitors in the coming months.

A concert film is a pretty different set-up from a scripted studio movie, and it remains to be seen whether a deal like this — which cuts out the major Hollywood distributors entirely with a direct deal between producers and an exhibitor — could actually represent a threat to the established producer-distributor-exhibitor structure. But this isn’t the only place where cracks are starting to show in the studio system. While AMPTP remains deadlocked with guilds amid a historic dual strike, smaller independent distributors like A24 are making interim agreements with SAG-AFTRA to carry on producing and promoting their movies. And if AMC Theatres Distribution gets a hit under its belt, AMC could expand its distributor-exhibitor ambitions.

Will this power move simply leave studios breathless, or will it leave them with a nasty scar? I don’t know about you, but I’m feeling 22. (I’m sorry.)

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