Trolls World Tour has after three weeks on VOD brought in higher revenue for Universal than the succesful Trolls did in 2016 in theaters, according to WSJ. Universal will release "movies on both formats" going forward.
Premium VOD success
For over a century, the cinema industry has thrived on exclusivity. New movies premiere in theaters before they are released for home entertainment. The "theatrical window" is the premise for success, they claim.
Universal Pictures decision to release Trolls World Tour directly on video-on-demand services such as Apple TV (iTunes), Google Play Movies and Vudu would appear to disprove the claims made by theater groups. After three weeks, the movie has brought in about $95 million in revenue from nearly 5 million rentals, according to the WSJ.
- "Universal has made more than $77 million in revenue from “Trolls World Tour” domestic customers so far," reported WSJ. "The same amount of revenue during a theatrical run would have required a box-office gross of $154 million, or about the final tally of the original “Trolls” movie. The sequel cost about $90 million to produce. The original “Trolls” collected $153.7 million at the domestic box office. Universal received about $77 million of that total; about half stayed with theaters."
In other words; Trolls World Tour has in just three weeks made more money on VOD in North America for Universal than the original Trolls did in 2016 during a five-month theatrical run. Part of the reason is that Universal retains about 80% of digital rentals and purchases compared to about 50% for box office sales.
Trolls World Tour was made available in North America and a few other regions as a $20 rental earlier this month. Universal also released in-cinema movies The Invisible Man, Emma, The Hunt and Never Rarely Sometimes Always that have brought in a total of $60 million dollars in rentals to date.
Universal: Movies on both formats
Universal says that Trolls World Tour has exceeded expectations and proven that 'premium VOD', meaning premium video-on-demand at home, is viable.
- "The results for ‘Trolls World Tour’ have exceeded our expectations and demonstrated the viability of PVOD," said Jeff Shell, CEO of NBCUniversal. "As soon as theaters reopen, we expect to release movies on both formats."
Universal added that it will use the same release strategy for The King of Staten Island and other movies in the future. However, it is unclear if the studio's plans extend to the upcoming Fast & Furious movie F9 that was postponed due to the outbreak of coronavirus.
Also read: WarnerMedia CEO: "We're rethinking our theatrical model"
The comments made by NBCUniversal's CEO did not please NATO (The National Association of Theatre Owners) who pointed out that these are "unusual circumstances in an unprecedented environment".
- "Universal does not have reason to use unusual circumstances in an unprecedented environment as a springboard to bypass true theatrical releases," said John Fithian, NATO president and CEO. "Theaters provide a beloved immersive, shared experience that cannot be replicated – an experience that many of the VOD viewers of this film would have participated in had the world not been sequestered at home, desperate for something new to watch with their families. We are confident that when theaters reopen, studios will continue to benefit from the global theatrical box office, followed by traditional home release."
- Source: WSJ, NATO
