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Trolls World Tour could be a case study for Hollywood’s digital future

Trolls World Tour could be a case study for Hollywood’s digital future


A debate over what happens when everything returns to normal

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With coronavirus shutting down movie theaters in many states, major studios Universal Pictures and Warner Bros. decided to bring some of their films to digital renting platforms like iTunes and Amazon early. It’s a moment that many industry insiders are referring to as pivotal: the theatrical window, once considered holy, is being shattered.

Movies like Emma, Trolls World Tour, The Hunt, and Birds of Prey are all being made available to consumers sooner than planned. For $20 a pop, people stuck at home can watch films that are currently in theaters. (This is a little different from Disney bringing Frozen 2 to Disney Plus three months early. Although Frozen 2 was still in theaters up until a few weeks ago, it had already enjoyed over a 90-day theatrical run.) Most blockbusters run 90 days exclusively in theaters before hitting digital. Emma, The Hunt, and Birds of Prey are in the early weeks of their theatrical runs — and Trolls World Tour isn’t even out yet.

“We hope and believe that people will still go to the movies in theaters where available, but we understand that for people in different areas of the world that is increasingly becoming less possible,” Jeff Shell, CEO of NBCUniversal, said in a statement.

The situation has prompted insiders to speculate that it will change how studios approach releasing their films. Theater owner groups disagree.

“To avoid catastrophic losses to the studios, these titles must have the fullest possible theatrical release around the world,” a statement from the National Association of Theater Owners (NATO) reads. “While one or two releases may forgo theatrical release, it is our understanding from discussions with distributors that the vast majority of deferred releases will be rescheduled for theatrical release as life returns to normal.”

“To avoid catastrophic losses to the studios, these titles must have the fullest possible theatrical release around the world.”

That’s not necessarily true. Studios would probably love to cut out the middle man; The New York Times reported that as much as “80 percent of premium video-on-demand revenue” goes to the studios. It’s clear, however, that studios don’t want to tarnish relationships with theater groups or give up box office revenue based on moves made over the last few weeks.

It’s the “one or two” releases that people should be paying attention to. Let’s take Trolls World Tour, for example. Long-range forecasting for Trolls World Tour predicted that it would bring in between $17 and $25 million in its opening weekend. By comparison, the first Trolls film made $46.6 million domestically in its opening back in November 2016. That’s a pretty big drop-off, and it showcases a trend with animated sequels over the recent years where they slump compared to the originals.

While Trolls World Tour wasn’t on track to be a blockbuster success, Universal’s year has hinged one other film scheduled to come out in a couple of months: F9. The ninth installment in the Fast and Furious franchise was due out in June. Instead of Universal waiting to see if theaters would be up and running again or release the film on iTunes and Amazon for $20 a pop, the studio decided to delay its release an entire year. Now, F9 will open in April 2021.

What we’re seeing instead is studios like Universal starting to make pipeline decisions. There are midtier films that don’t need a 90-day exclusive theatrical release. Films like Emma and The Hunt might do better via $20 VOD rentals than they would at a theater. The average ticket price is $16, according to NATO. If a family of four wants to go see The Hunt, it’s more than $50. But $20 at home where everyone can watch and eat their own snacks is a much more enticing offer. Warner Bros.’ Birds of Prey did well at the box office, grossing $84 million domestically, but now that people are at home, there’s a good chance more people will discover it through a $20 rental as they look for entertainment to fill their time. Even the director agrees.

We’re seeing studios like Universal start to make pipeline decisions

Birds of Prey will in fact be available for digital rental on March 24,” director Cathy Yan tweeted on March 17th. “Thanks to all the fans and supporters out there. I’m just happy people will be able to enjoy new and fun movies right now.”

Studios like Warner Bros. and Disney are already thinking this way. Warner Bros. is building an entire studio arm dedicated to making midlevel budget films. Disney is making more Fox films exclusive to Hulu. Movies that aren’t going to have a guaranteed return on investment might do better as simultaneous releases. That’s essentially what Universal is saying with its most recent decision.

Still, it’s impossible to talk about Universal’s moves without looking at the extreme measures that brought the studio here. The novel coronavirus led to diminished theater outings over the last couple of weeks, and now, most major and independent theater chains have closed their doors to comply with federal, state, and local government orders or recommendations.

NATO — a strong group that has taken on streamers like Netflix multiple times over the years — understands the current predicament. If anything, Universal’s move now gives Netflix more ammo in its ongoing fight with major theater chains. If Universal can release a movie in theaters and on digital retailers simultaneously, why can’t Netflix give its films to theaters for 30 days before bringing them to the streaming platform?

It’s the precedent that matters

“People will return to movie theaters because that is who people are,” the statement reads. “In the uncertain, difficult economy ahead, movie theaters will fill the role they always have in boom times and in recessions — the most popular, affordable entertainment available outside the home.”

When people do go to theaters, it’s for major blockbusters like Mulan, Black Widow, F9, and No Time to Die, or it’s for horror films (as reflected in box office results over the last couple of years) for movies like A Quiet Place Part II. Paramount Pictures reiterated that it “believes in and supports the theatrical experience” in a statement on March 12th.

This is a moment that the film industry has been building to for years. Now that NBCUniversal and WarnerMedia are set to launch their own streaming services, finding a way to streamline some of its films to ensure there’s a sea of constant new releases that won’t play as well theatrically but might lead to new subscriptions or higher engagement will become home releases. Universal’s decision to break the theatrical window as one of the biggest studios in Hollywood is a historic one; it’s just not as revolutionary right now as some may see it.

In the long scheme of things, people might not care that Trolls World Tour is going digital first. It’s the precedent that matters. Other animated titles, midbudget movies, and a wider array of films might face shortened theatrical releases or find more emphasis placed on digital distribution. Eventually, it will affect a movie or an entire subsection of movies that people care about — it just all started with Trolls World Tour.