AMC Theaters Pouts Like A Child Because NBC Universal Proved Movie Release Windows Are Nonsense

from the take-my-ball-and-go-home dept

There’s a laundry list of shoddy arguments and business structures that have been exposed as nonsense and folly during the pandemic. One of them is the traditional Hollywood film release window, which typically involves a 90 day gap between the time a move appears in theaters and its streaming or DVD release (in France this window is even more ridiculous at three years). The goal is usually to “protect the traditional film industry,” though it’s never been entirely clear why you’d protect traditional theaters at the cost of common sense, consumer demand, and a more efficient model. Just because?

While the industry has flirted with the idea of “day and date” releases for decades (releasing movies on home video at the same time as brick and mortar theaters) there’s long been a lot of hyperventilation on the part of movie theaters and traditionalists that this sort of shift wasn’t technically possible or would somehow destroy the traditional “movie experience,” driving theaters out of business.

Then came the pandemic, when visiting a traditional theater suddenly became potentially fatal. Numerous studios quickly adapted, and began experimenting with much shorter release windows or in some instances, no window at all. Comcast NBC Universal, for example, offered early access to some films for $20 at home while they were still in theaters. Other films, like “Trolls World Tour,” were released simultaneously on video on demand and in theaters that remained open.

Guess what: the film did very well, raking in $100 million in premium VOD rentals in its first three weeks in North America, which wasn’t just profitable, but wasn’t that far behind the $116 million grossed by the original Trolls film during the first three weeks it was in theaters in 2016. Excited by the success, Comcast NBC Universal CEO Jeff Shell gave a fairly innocuous statement to the Wall Street Journal:

“The results for Trolls World Tour have exceeded our expectations and demonstrated the viability of PVOD,” Shell told The Wall Street Journal, which first reported the numbers. “As soon as theaters reopen, we expect to release movies on both formats.”

There’s really nothing wrong with that. Adaptation is a good thing. Unless apparently you’re AMC Theatres chair-CEO Adam Aron, who immediately threw a temper tantrum and declared that AMC would never again show a Comcast NBC Universal picture, anywhere in the world:

“It is disappointing to us, but Jeff?s comments as to Universal?s unilateral actions and intentions have left us with no choice. Therefore, effectively immediately AMC will no longer play any Universal movies in any of our theaters in the United States, Europe or the Middle East,” Aron wrote.”

It’s understandable that the traditional theater sector is worried, especially given the number of employees that are struggling right now. That said, Aron’s comments are one of the more embarrassing “I’m taking my ball and going home” moments in modern history. Comcast was forced to adapt during a pandemic, discovered a profitable way to do so, yet this is somehow perceived as a fatal sin worthy of being blackballed worldwide. Aron proceeds to insist that his very clearly vindictive and punitive toddler moment was in no way a vindictive and punitive toddler moment:

“Incidentally, this policy is not aimed solely at Universal out of pique or to be punitive in any way, it also extends to any movie maker who unilaterally abandons current windowing practices absent good faith negotiations between us, so that they as distributor and we as exhibitor both benefit and neither are hurt from such changes. Currently, with the press comment today, Universal is the only studio contemplating a wholesale change to the status quo. Hence, this immediate communication in response.”

Comcast in turn was forced to issue a counter statement blowing smoke up the traditional brick and mortar industry’s posterior about how they weren’t being forgotten, there’s kind of a pandemic going on if you hadn’t noticed, and the company remained dedicated to traditional film releases because it remains a big part of its business model and will probably remain that way for years to come.

Regardless, it’s abundantly clear that such windows have outlived their usefulness, and if movie theaters want to adapt to the streaming and broadband era, they’re going to need to adapt and find creative new offerings. They’re going to need to embrace more innovation, and less crying like babies every time Netflix or anybody else dares to move the ball forward. Many bar/restaurant hybrid establishments have focused on making the traditional theater more enjoyable. Others, apparently, see pouting over inevitable evolution as the best path forward.

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Companies: amc, comcast, nbc universal

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Comments on “AMC Theaters Pouts Like A Child Because NBC Universal Proved Movie Release Windows Are Nonsense”

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That One Guy (profile) says:

A telling tantrum

If the only way a theater can compete with viewing at home is if people have to go to theaters for the first few months to see a new movie then they have essentially admitted that their product is so utterly crap/overpriced that the only way they can stay in business is if people have no other choice.

Restaurants and fast food places stay in business just fine despite the fact that people can buy food and cook at home because those stores add value, whether that be cooking more complex dishes that people might struggle with or simply removing the hassle of cooking. If theaters aren’t offering enough to offset the price then that’s kinda on them/the studios for making the deal so poor that it’s not worth the cost, and the solution to that is to add value or reduce the costs so that it’s actually a good alternative for people, not desperately try to hamstring the alternative and show just how rubbish even the people running theaters think their product is.

Anonymous Coward says:

Re: A telling tantrum

only way they can stay in business is if people have no other choice.

The American Way.

Competition? Innovation? HA! The real business is in making sure your profit model never adapts. Adaptions cost money you know. It’s far cheaper to pay a politician to pave the way to the bank for you with Government granted monopolies, and bans on competing research / development. Even better it ensures a fat pipeline to get other profit models off the ground.

The only people who need to innovate are those that wish to steal from the wealthy, and there are plenty of ways to make sure that doesn’t happen.

Anonymous Coward says:

Re: Re: A telling tantrum

This is because the theater industry in general has been horribly awful at innovation since forever, and the only way they know how to innovate is spend enormous amounts of money to essentially be louder.

Never mind that they actually seem to do fine regardless of other ways of consuming movies. People who like that experience are going to go for it. (There are maybe less youngsters being introduced to the experience, so this may have an effect over time.)

Of course, the obvious (and completely antithetical to modern U.S. capitalism) way to grow their business would be to offer a decent product at a competitive price, instead of pushing the extreme limits of what the market might bear. But even if that leads to more profit, businesses seem to find it just so distasteful.

PaulT (profile) says:

Re: Re: Re: A telling tantrum

Well, in fairness, a lot of cinemas are between a rock and a hard place. Studios regularly demand such a large cut of business that they cannot make a profit on the seat alone. They’re also often forced to invest in certain projection and sound tech in order to be able to book certain movies. That’s why concessions are so stupidly priced – it’s the only steady revenue stream they have that doesn’t go somewhere else. Meanwhile, they’ve built their businesses almost entirely on first-run new movies the typically only have a shelf life of a few weeks, That’s the problem – the selling point is not "the cinema experience" but rather "you have no choice".

The industry as a whole will be fine long term, but I think it’s the AMC-type model that’s really in danger. Smaller arthouse chains and independents should ride it out because their clientele are usually people who really care about movies and the entire cinema experience. But, if the entire business depends on getting people to pay through the nose for snacks because they have no choice in where they watch the movie, the death knell for that has been ringing for a while.

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PaulT (profile) says:

Re: Re: Re:3 A telling tantrum

Oh absolutely, it’s not going to be a quick process and there will be many casualties along the way. But in the longer term, the businesses that deal in "we provide something you can’t get at home" are going to outlast the ones that are based on "you can get this at home in a couple of months" with no additional value.

Honestly, a lot of this is going to ride on the tentpole features that have been delayed until the autumn/winter period. If people don’t turn up in large numbers for the next Bond movie or the next Marvel movie, the multiplexes are in serious trouble, while the smaller independents might be able to coast on hardcore fans that will go out of their way to ensure that their local arthouse remains viable.

The same might be seen in the music industry – people may skip on arena shows but will make sure their local venue keeps showcasing independent talent. That may be overly optimistic, but we will see what happens.

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Thad (profile) says:

Re: A telling tantrum

I love my local Alamo Drafthouse and look forward to the day when it’s open again and I’m comfortable going back to crowded public spaces.

Here are some movies (and a couple of TV shows) I’ve seen there over the past few years:

The Big Lebowski
The Princess Bride
Horsefeathers (with short Punch Drunks)
The Wild Bunch
Lost Boys
Anna and the Apocalypse
The Good Place (series finale)
Primal (first 4 episodes)

I could have watched any of those at home — hell, I own several of them on DVD. But I went to the theater because I enjoy the experience of seeing something I enjoy on the big screen, in the company of a similarly appreciative audience. No artificial scarcity required.

There are other things a movie theater provides. I’ve got a pretty good TV and sound system, but it ain’t a movie theater TV and sound system. I found Bohemian Rhapsody to be a disappointing, bog-standard musical biopic, but it was worth seeing it in the theater for the opportunity to hear a bunch of Queen music on a high-quality sound system. Similarly, I thought the last Star Wars movie was pretty bad, but I enjoyed it anyway, largely for the spectacle and for seeing it in IMAX (and again I have to talk about the sound system; that John Williams soundtrack sounded fantastic).

I love movie theaters.

I don’t love AMC. My last couple of experiences there have been unpleasant. I like the new recliners, but I hate the ordering kiosks. Plus they’re the most expensive theaters in town. For a few bucks less, I could go to Harkins; the seats aren’t as nice but the overall experience is better. And for about the same price as Harkins, I can go to Alamo; they don’t have as many screens so I don’t have as many choices of what to see, but on the other hand, they serve beer.

Maybe AMC can work on making itself a more appealing place to go, instead of whining that people are watching movies at home because, y’know, global pandemic.

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Anonymous Coward says:

If Jeff Shell had of said:

I swung a kitten around by the tail this morning, and it’s pitiful cries were delicious. So that’s how all our employees will be starting the morning from now on

Then Adam Aron’s reaction would have seemed pretty reasonable. But failing in actuality, it’s just pathetic.

Anonymous Coward says:

I can see the argument from the AMC side. During the initial release I believe the studio receives the major portion of the proceeds from ticket sales. The theater makes up for this in concessions.

If the studios are now going to release the movie simultaneously in other outlets (dvd/PPV/streaming) the theater not only loses the small cut form ticket sales but also all the concessions.

I think what AMC is saying is… fine, you want to release to home market at the same time as the initial release we want to renogotiate the contract terms for ticket revenue. Your product now has less value to us.

Theater Boycotter says:

Let the studios and theaters snipe at each other. Both aren’t worth much (IMHO).

The studios haven’t released much beyond sex and gore for the last few years; little to enjoy for anyone who aspires to some level of taste. Most of what the studios choose to release today would be called soft-core porn 30 years ago. Blech. Let the studios caterwaul about public demand, there is a portion of the public that is crude. None the less, the studios could choose to appeal to the better quality people, but don’t. There is no knife at the throats of studio execs.

The theaters have become dumping grounds for the vulgar, coarse and low. The behavior of the public at the theater is so objectionable that the movies are unendurable to anyone with an ounce of self respect. Similarly, the theaters could choose to eject the portion of the population which behaves in a manner to disrupt the enjoyment of others, but doesn’t. The apparent choice is to turn away quality people in order to appeal to the vulgar. Again, there is no knife at the throats of theater execs.

As for the spurious financial argument, BS on that. Creative accounting allows both sets of execs to pick the audience they want to appeal to. I predict that both sets of execs deliberately arrange to see the vulgar, coarse and low as the prime audience in order to inflate their own sense of importance. The execs wish to believe (and perhaps make) the low quality people appear to be the majority!

Let them both go to the wall. Bah Hum Bug!

Anonymous Coward says:

Re: Re:

I have not seen "Trolls World Tour" but I have seen some of the original "Trolls" movie.

I don’t think sex and gore were an important part of either movie.

On top of that; this studio did manage to find a public that demands absence of sex and gore, and the theaters did not have to deal with the behaviour of that public.

On the other hand I want another Sony-style leak so we can watch the studios and theater chains snipe at each other (however vulgarly). That would be quality educational entertainment!

Anonymous Anonymous Coward (profile) says:

Was that supposed to hurt?

In a letter from independent theater operators to AMC Theatres chair-CEO Adam Aron, there was a succinct message:

Dear Mr. Aron

Thank you Adam!

Independent Theater Operators et al

PS: It is expected that Comcast NBC Universal will not be harmed by the recalcitrant theater distributor/operators actions.

PPS: Nor us

Anonymous Coward says:

it’s never been entirely clear why you’d protect traditional theaters at the cost of common sense, consumer demand, and a more efficient model. Just because?

Umm… because release windows are the theater industry’s attempt to prop itself up? It’s not nonsense just because we don’t like it. There’s plenty of evidence to suggest exclusivity gives financial benefit to those holding the rights to it.

One might ask why the film studios would agree to release windows when they seemingly only benefit the theater operators. That’s because, when this practice started, the film studios were the theater operators. At that time, home video didn’t exist, and TV would’ve been the only other distribution channel. But film people have always looked down on TV, and would’ve considered that "devaluing" to their product; and the government might’ve taken it as the studios thumbing their nose at the antitrust decision ("if we can’t own this market, we’ll destroy it")—especially given their ownership stakes in some TV networks.

Anonymous Coward says:

The success of Trolls World Tour may be normal for VOD in general, and it may be not normal. It is very hard to tell considering the circumstances. Two reasons:
o the film is for children
o the country is under quarantine and parents are trying to keep their kids occupied

It is quite possible that NBC Universal will make the same gross for other films released to VOD immediately (after the quarantine) but somehow I think they at least got a small bump (if not a large one) from current conditions.

crade (profile) says:

I’m sure some people still like to go to the theaters, but personally I haven’t been going for a long time and if you asked me I would have said "what release window" since "only in theaters" for me is no different from "not released" and it doesn’t show up on my radar until it’s accessible to me.

I actually think things will get worse from my point of view if they ditch their release window as it will probably mean they leave things in VOD and delay putting things onto netflix longer and accelerate them creating their own streaming services and pulling their stuff off netflix.

Anonymous Coward says:

Theaters want to to bank on the whole ‘theater experience’ idea…

Alright, what else would be nice to do with that big screen? Video game tournament? Poll viewers for selecting out of a pool of trailers during the pre-show? Audience chatroom during pre-show via webpage on viewers phone?

Alright now let’s looks at the seating and audio.
hmm, rotatable seats for better controlling the viewing angle? Optional headsets for individuals wanting to control their own volume? Smaller speakers on the underside of the seats?

Alright, now concessions.
Here’s an idea, find a way to implement some kind of in-room delivery for concessions at an additional fee. it could be by a phone app or even a tablet mounted to the wall near the bottom of the walkway. That way you don’t have to leave the movie to get a refill.

If all that is ideas a random person could think up… maybe Theaters need to do some more thinking.

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Anonymous Coward says:

Re: Re:

Theaters want to to bank on the whole ‘theater experience’ idea…

I notice all your suggestions involve having the viewers interact with their phones to get/keep them involved. I get that.

I have a suggestion to better the "theater experience," and it’s the primary reason why I haven’t been to a theater in more than a decade – no fucking phones. Ever. Need to have your phone? Fuck off and watch at home.

Because there’s always that clueless fuckhead who thinks the "Please silence your phone" message on the screen couldn’t possibly mean them…And paying north of $40 for a couple to see a movie that’s inevitably going to be interrupted by some douchetard who can’t un-tether themselves from a phone for 2 hours just doesn’t have much value to me.

Assholes and their fucking phones ruined the theater experience far beyond the cost of tickets or concessions. Get rid of that, and they might not have to bend over backwards to keep customers.

Anonymous Coward says:

Re: Re: Re:

only 3 out of 7 of those ideas involved phones… cause trying to give any from of control system to every seat makes the cost out way the benefits.
Giving them something to do with the phones during the pre-show means they will more likely already have the phone out when the turn off message comes.

Can’t do much about the people willfully being rude, but you can do something about the people simply not remembering to do it.

While you could try something like getting people to lock their phones in a locker, it would possibly be an increased chance of theft and would also risk making the theater liable for said theft.

Though admittedly if a voluntary system for that did end up happening, it would be nice to get something in exchange. Like maybe a small discount on certain things at the concessions.

rkhalloran (profile) says:

Re: phones out in theaters

the Alamo Drafthouse chain has a hard-and-fast no talking or texting rule in their theaters. They’ve even gotten some stars to do lead-ins to warn people against it, usually as part of whatever new movie they’re in: (Godzilla!) (Mark Hamill) (Amy Schumer) (Chadwick Boseman)

Koby (profile) says:

Home Viewing Has Caught Up

Movie theaters had an edge in the movie experience because they had a large screen, great audio, and maybe some comfortable seats. But over the years, some consumers have spent big bucks on home equipment — big screen TVs, surround sound, and padded recliner chairs. This Trolls experiment essentially confirms that the home viewing experience is just as good as the theater; but with lower popcorn prices and little chance of getting The Rona.

I can sympathize AMC’s sudden realization that their livelihood is now on the chopping block, so I see this panic as understandable. But this actually isn’t so sudden. The home viewing experience has been improving for a long time.

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Professor Ronny says:

The Theater Experience

Theaters want to to bank on the whole
‘theater experience’ idea…

I’ve completely stopped going to the theater except for when I take my grand kids to a kid’s movie and the real reason has not yet been mentioned here.

If the movie is scheduled to start at 4PM, what that really means is the 15 minutes of commercials start at 4PM. After that, another 10+ minutes of previews runs. The actual movie never starts until 20+ minutes after the scheduled start time.

If I wanted commercials, I can wait for broadcast TV.

techturf (profile) says:

Re: The Theater Experience

The actual movie never starts until 20+ minutes after the scheduled start time.

That’s what gets me. In the past I only went to the movies about once a year, but every time I went the previews and commercials (WTF?!) got longer and longer until I gave it up for good. I can even walk to a theater and don’t mind spending a fortune on popcorn and drinks, but fark the commercials.

Roman (profile) says:

You’d think that a company that is so dependent on such a small number of major suppliers would at least try to do something to make sure that they’re not subject to their whims. Worse thing is that it’s starting to look like the Studios really don’t need the likes of AMC anymore.

Netflix recognized this pretty quickly and is now creating a lot of their own content There does seem to enough good stuff that a lot of people just keep paying month after month.

AMC could maybe, possibly look into something like that? But it might just be too late, I’m perfectly happy watching movies in my own home ‘theatre’.

deadzone (profile) says:

Go out or stay home

Having a choice do go to the movie theater or stay home and watch the same movie on VOD is at least a single step in the right direction. I’m really sort of on the fence though – I hesitate at a 20 dollar price for a VOD new release movie at home but then when you consider how much it costs for a trip to the movie theater as a family it’s way expensive overall.

Progress!! I guess. 🙂

Anonymous Coward (user link) says:

toddler moment

"Aron proceeds to insist that his very clearly vindictive and punitive toddler moment was in no way a vindictive and punitive toddler moment"
Nope, that’s not what he said. He clearly said that his vindictive and punitive toddler moment wasn’t aimed at Comcast specifically, that he’d be just as much of a vindictive toddler with anyone else who dared to do the same thing.

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Stephen T. Stone (profile) says:

NBC Universal should take a page from the playbook of WWE and wish AMC Theaters well in its future endeavours. Universal might do a little worse without AMC theaters, but AMC will inarguably do worse without Universal films — and I’m pretty sure both sides know it but aren’t willing to say it out loud.

Anonymous Coward says:

I don’t understand this game that movie theaters are playing. Movie theaters need the movie studios a lot more than move studios need the movie theaters. Right now, there are only a handful of major movie studios: NBCUniversal, Warner Brothers, Sony Pictures and Disney.

Maybe it’s time for movie studios to run their own movie theater franchises. Moviegoers don’t care about all this bitching. It’s like these theater owners are acting like spoiled children and they seem to think they have leverage against studios. They don’t. But, they sure are screaming the loudest in an effort to add shock value to movie studios.

Maybe it’s time for these studios to just band together and pull all of their releases from theaters. Without movies, movie theaters won’t survive and they seem to think that they a bargaining position with studios. They don’t.

rkhalloran (profile) says:

Re: studios owning theaters

In the US, the studios were forced to divest their theater operations as an anti-trust move in the late 1940s; the original ruling had come nearly 20 years earlier but was put off by FDR during WW2. The studios unloaded their portfolios to the rising television networks of the time (all the late-night old movies on the independents back in the day…).

SirWired says:

This is a perfectly-normal game of business "chicken"

The entire industry (including the amounts of capital investment required to build theaters) is built based on limited release windows, and it’s certainly not surprising that they are going to push back on a studio that suddenly wants to do something different.

Universal doing this without warning to one of their primary distributors was bound to ruffle some feathers.

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PaulT (profile) says:

Re: This is a perfectly-normal game of business "chicken"

"The entire industry… is built based on limited release windows"

Except, that isn’t really true. Plenty of smaller cinemas survive without such things, and in fact the release windows have narrowed from several years in the days of VHS to just a few months now with constant record-breaking attendance in between. Day and date releases are also increasingly common with independent features.

"Universal doing this without warning to one of their primary distributors"

Also not true. This has been a debate for a very long time, and the reason it was done recently is because the distributor was not able to distribute anything. It’s sad that AMC was prevented from providing their usual service, but it’s hardly a bad reflection on Universal that they decided to distribute it themselves rather than wait around for others to be able to profit from their $100+ million investment (in the case of Trolls World Tour)

SirWired says:

Re: Re: This is a perfectly-normal game of business "chicken"

I don’t think AMC is particularly upset about TWT going direct-to-streaming. It’s Universal’s statement that they plan on continuing to do this even with more releases after the theaters re-open.

Release windows are shorter than they used to be, but that’s because attendance has gotten more front-loaded. (The physical number of prints used to be a limiting factor, and that’s no longer the case, so larger releases can be completely saturated, and that used to not be possible.)

And yes, there are Day-and-Date releases now with independent movies, but so far those have all been token "theatrical" releases in a tiny handful of theaters in order to qualify for movie awards. No movies expected to make more than a trivial gross have been released that way.

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PaulT (profile) says:

Re: Re: Re: This is a perfectly-normal game of business "chicken

"I don’t think AMC is particularly upset about TWT going direct-to-streaming. It’s Universal’s statement that they plan on continuing to do this even with more releases after the theaters re-open."

The point is, the cat’s out of the bag now. From Universal’s POV they were forced into a position where they either had to change release dates and sit on hundreds of millions of dollars of inventory in the hope the new date would actually happen, or gamble on using their own distribution. They took the latter option, despite decades of fearmongering over piracy, etc., that had stopped them doing it before – and it worked. Now, they should just ignore that option entirely because someone else finds it inconvenient to their own business model? Sorry, business does not work like that. You don’t make business decisions because one of your suppliers is throwing a tantrum – you find new suppliers.

This is just yet another change that the cinema industry has had to face every decade or so since the invention of the medium.

"Release windows are shorter than they used to be, but that’s because attendance has gotten more front-loaded."

For new blockbusters, yes. So, the exhibition business models need to change to not be dependent on those.

"And yes, there are Day-and-Date releases now with independent movies, but so far those have all been token "theatrical" releases in a tiny handful of theaters in order to qualify for movie awards."

Not true, but the reason they haven’t been happening for larger movies is directly because the theatres were opposed to them. Now, Universal can do what’s good for them rather than AMC, which will include theatrical runs but offers options for people who don’t want to or can’t go to a cinema. There’s a way of making this beneficial to both parties, but the business model of "we make money because we hold the distribution lines hostage for the first 3 months" needs to change.

Naughty Autie says:

One of them is the traditional Hollywood film release window, which typically involves a 90-day gap between the time a move appears in theaters and its streaming or DVD release […]

Before the 90-day window, the wait in the UK used to be nine months, yet having to wait so long until I could rent or purchase the video tape never made me go to a dark, over-crowded, and loud cinema where even members of the general public engaged in stim suppression techniques ("Stop fidgeting, will you?").

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PaulT (profile) says:

Re: "Pouting like a child": perfect click-bait title

"curiously one-sided (wonder how come)?"

Because this is an opinion blog written from the viewpoint of the author of the piece.

But, strange how you can’t identify anything specifically wrong with it, instead demanding people read something else to find out why you oppose it.

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