When "Trolls" Cracked the Theatrical Window

I'm a little late on this post, but this is still very much a developing situation, and a fascinating one. So, unless you've been under a rock for the past few weeks, you know that the situation is dire for the movie industry right now. We're anticipating at least a full quarter of 2020 with movie theaters nonoperational, and the studios are busy trying to figure out what to do with multiple tentpoles in the pipeline, while the theaters themselves are looking at potential bankruptcy.

NBCUniversal wasted no time putting all their current theatrical releases on early VOD, and then decided to premiere "Trolls: World Tour" on "premium" VOD (PVOD) as well, a few weeks ago, at $20 bucks for a 48 hour rental. According to NBCUniversal, it's made north of $100 million so far, prompting Universal to declare that they'll look into simultaneous theatrical and PVOD releases in the future. The theaters are apoplectic, and AMC has promised to boycott future NBCUniversal releases. Opinion pieces have weighed in on both sides, and speculation is rampant. I figured it couldn't hurt to throw in my own two cents.

First, the success of "Trolls: World Tour" is almost certainly an outlier thanks to the unique crisis we're in. There's no guarantee that once theaters are back in business, we'll see nearly the same kind of demand for PVOD releases. And even if there is, PVOD is never going to kill off movie theaters entirely. However, the worry is that since many people have now been introduced to PVOD through the "Trolls: World Tour" release, the theaters are going to take a significant hit as audience behavior shifts. Keep in mind that PVOD has been around as a concept for at least a decade, but the theaters have fought off every attempt to threaten their exclusive access to new studio films. The COVID-19 pandemic, however, has finally provided the opportunity for studios to experiment with the concept.

And it's no surprise that some audiences are responding positively. Movie theater trips can be prohibitively expensive or too much of a hassle for many movie fans. The "Trolls" movies are aimed at exactly the audience of small children and their families who would appreciate the option of being able to watch these films at home, on their own time, with the ability to pause for bathroom breaks. Nothing can replace the theatrical experience, but the theatrical experience is not for everyone. However, we should also keep in mind that the success of "Trolls: World Tour" is a bit of a mirage, because though the returns are huge for a PVOD release, they're not great for a theatrical one. And it's even less of a success when you consider that the PVOD gains are likely to be at the expense of later digital rentals, purchases, and revenues from other downstream sources. NBCUniversal has been backpedaling recently as to how well "Trolls: World Tour" has actually been doing, because the film has yet to turn a profit. I wouldn't be too worried about them though, considering the bulk of revenue from kids' films come from merchandise and licensing.

Other studios have been cautiously following NBCUniversal's lead, with Warners' new Scooby Doo prequel "Scoob!" next in line for a PVOD release. Nobody else has made the same bold announcements about trying to incorporate PVOD releases into their long term plans, though. I don't think PVOD is going to become as prevalent as the major theater chains fear it will - you're never going to have billion dollar blockbusters without the theaters. On the other hand, I also don't think they'll be able to force the genie back into the bottle. Even after shelter-in-place orders lift, the general public may not be ready to flock back into theaters for some time - possibly not until COVID-19 vaccines become available next year. That's an awfully long time to delay movies that are already finished, like "Black Widow" and "No Time to Die."

I sympathize with the theater owners, but personally I'm not going to be taking any chances. I don't see myself setting foot in a movie theater again any time soon, and I'll happily shell out twenty bucks to watch "Dune" or the "Bill and Ted" sequel from the safety of my own couch. Or I'll wait a few more months and shell out six bucks, which is what I've been doing for years already.
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