In the wake of the Wall Street Journal‘s report that Trolls World Tour minted $95 million off its domestic PVOD rental in its first 19 days, the National Association of Theatre Owners sent out a statement Tuesday.
“This performance is indicative of hundreds of millions of people isolated in their homes seeking entertainment, not a shift in consumer movie viewing preferences,” it said. “It is not surprising that people under shelter-in-home ordinances for weeks on end with increasingly limited entertainment options would take advantage of the movie’s direct-to-VOD move to keep children entertained, even at a premium price.”
The theater owner org also underscored, “Universal heavily marketed the title as a theatrical release, in theaters and elsewhere, for weeks on end. That is unlikely to recur in normal times, and those costs haven’t been disclosed. While Universal may be pleased with the PVOD results of Trolls World Tour, this outcome should not be interpreted as a sign of a ‘new normal’ for Hollywood.”
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“Universal does not have reason to use unusual circumstances in an unprecedented environment as a springboard to bypass true theatrical releases,” said NATO president and CEO John Fithian. “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.”
In the wake of their success with Trolls World Tour, Universal announced that its Judd Apatow-directed Pete Davidson comedy The King of Staten Island will be released in homes June 12, forgoing a June 19 theatrical release, which is when some movie theaters were planning to come back online as they head for a full-on opening in July. Uni isn’t the only ones doing this: Warner Bros is skipping theaters and going to straight to digital with their originally conceived theatrical release Scoob! on May 15. My Spy, from STX, is headed to Amazon, The Lovebirds from Paramount/MRC is going to Netflix, Artemis Fowl to Disney+, and the list grows.
NATO cited a Morning Consult poll, “U.S. adults say the on-demand price range that they’d be willing to pay in-home for a movie currently in theaters is $5 to $8, with the optimum price being $6.” Essentially, the point being that consumers are more price sensitive when considering at-home entertainment during normal times, thus showing the financial upside to an exclusive theatrical release.
NATO also pointed out that transactional video was in secular decline since 2004 with sales and rentals of individual titles in the home dropping from $24.9 billion in 2004 to $9.3 billion last year.
Essentially the theatrical shutdown has forced studios to pivot and be experimental with their release strategies, but the question is, in a normal marketplace with theatrical available, who’ll spend extra on an in-home title rental when you’re already shelling out for streaming. Indeed, different times now.
Once exhibition is up and operating, sources say studios will have hard discussions with exhibition to close the window. The expectation is that exhibition would push back with stiffer terms. The conundrum though is: theater chains are going to need product.
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