AMC and Regal Teaming up to Acquire and Release Movies

AMC Entertainment Group and Regal Entertainmnet Inc. are about to cut out the middle man – Hollywood! Not completely, that will never happen. They are close to joining forces to acquire and release independent movies according to the LA Times.

Theater operators and studios has been partners, dividing the box-office sales. This move would shift roles making the two rivals. I wonder how this will impact their already strained relationship. Studios would prefer to bypass theaters all together, releasing movies via video-on-demand shortly after they have appeared in theaters, thus cutting into ticket sales.

The joint venture does not have a name as of yet, but Tom Ortenberg has been hired as CEO. He is a former senior exec at both the Weinstein Co. and Lions Gate Entertainment Corp.

The hope is that in distributing their own films will make up for the diminished amount of movies being made in Hollywood. There has been a 16% drop from 2007 to 2010 in the number of movie releases in the U.S. according to Box Office Mojo. Despite the drop, there has been a 3% increase in the number of screens in the country. This is odd considering that theater attendance has been flat over the last five years and down 5% in 2010.

It’s reported that this venture will not compete with the studios because they will seek to acquire independently financed movies that may not otherwise make it into theaters, such as low-budget dramas, comedies and horror pictures.

AMC and Regal together control 31% of the nearly 40,000 screens in the country. These movies will have automatic access to duo’s theaters, but will also be offered to other cinemas. AMC and Regal plan to release movies on DVD, television and the Internet, thus providing new sources of revenue that theaters are desparate for.