Movie theaters are closed around the world because of the COVID-19 pandemic. Social distancing and shelter in place orders are in effect in many places in the United States. Even if Americans wanted to go to movie theaters, they can’t. As a result, many movie studios are delaying release dates or just going right to on-demand rentals. Because of this, Universal Pictures realized that VOD is a viable way to make money on new movies, and in turn, AMC Theaters–the largest movie theater chain in the country–is pissed.
To give a quick rundown of how all this happened, Universal couldn’t release Trolls: World Tour in theaters, so it went straight to on-demand rental. After three weeks, the movie sequel made more revenue for the studio than the original did after five months in theaters, mainly because of the higher percentage the studio takes from digital rentals compared to box office sales. This led Universal CEO Jeff Shell to say that in the future, the studio could release movies both in theaters and as VOD rentals.
AMC boss Adam Aron released a statement saying that the theater chain will no longer screen Universal films, and Universal responded restating that they’re still releasing movies in theaters–when they reopen–and the choice to turn to VOD was to give people staying at home something to watch. Obviously, continuing to make money when movie theaters are closed was probably another key factor as well.
Source: Gamespot AMC's Ban On Universal Movies Is Very, Very Silly