Last week, an article in the Wall Street Journal was published detailing the online success of Universal Studio’s latest film release, “Trolls: World Tour.” The article, stated that the follow-up sequel to the popular “Trolls” movie, went on to make more money for Universal Studios than the original did in its five-month run in movie theaters. As you might know, Universal Studios decided to release “Trolls: World Tour” straight to VOD (video on demand) due to coronavirus theater closures. It wasn’t a bold move at the time, back in March when COVID-19 really started initiating closures, movie theaters were on the list of affected business, and there were a lot of movies that either went straight to VOD or spent a few weeks in theaters and then quickly added to streaming platforms.
That was normal, that was expected, lots of studios had to make decisions based on their release dates. While some studios decided to push back their release dates to later in the summer with the hope that COVID closures would lessen, Universal took a different approach. “Trolls: World Tour” was supposed to be released in theaters on April 10th. They already had a massive marketing campaign behind the movie and they didn’t want that to go to waste. With Universal’s decision to release “Trolls” to on-demand, other studios were watching to see how its release could change the landscape of cinema releases moving forward. Movie Theaters were watching as well, considering the future of their business relied on these studios’ decisions.
Spoiler alert, shit hit the fan. In the WSJ Article, Jeff Shell, Head of NBCUniversal, noted that they were so impressed with the success of “Trolls: World Tour” PVOD Release that moving forward, “as soon as movie theaters open, [Universal Studios] expect[s] to release movies on both formats.” (Jeff Shell, WSJ, 2020). Meaning, that if Shell’s words are true, Universal Films will be readily available in homes and in movie theaters to view the day of the release. So, would you rather pay $20 and watch the movie in your home with your whole family OR pay nearly $16 per ticket to see the movie in a theatre. Yeah, movie-goers have already settled this argument. More people are deciding not to go to the theaters to watch movies and this is prior to the releases being available in your home the day of, movie theaters are worried if this statement and decision from Universal would be the final nail in the coffin of their 100-year running business.
So, what did the movie theaters do? They called Universal’s bluff. Shortly after the WSJ Article was published, AMC Theatres publicly announced that due to Universal’s statements that impacted the viability of their business, when their theaters re-open, they would not be showing any of Universal’s Films. Yikes. Just to put this into perspective, Universal Film Entertainment did roughly $6.5 Billion in sales last year. This number would be inclusive of any revenue that they made on film – including box office, ticket sales and home video purchases. That’s a ton of money largely coming from theaters and AMC Theaters is the largest theater company – holding 8,100+ screens in 650+ locations in the US. This fact alone boils down straight to the point – movie theaters and studios need each other – but when studios are getting more creative in their theatrical releases, theaters might be hitting the wall sooner rather than later.
With AMC Theatres calling out Universal Studios for their comments without their consideration, other companies are starting to take notice. Following AMC’s public release against Universal, Regal Entertainment Company has also followed suit stating that when they do re-open, they will not screen Universal’s movies in any capacity. Regal Entertainment Group is the second largest movie theater chain with 7,300+ screens across 550+ locations in the United States.
It’s hard to believe this entire dispute started with “Trolls: World Tour” a children’s film that is…not good. Regardless, this argument was bound to pop up sooner or later. It has been inevitable really, people just aren’t going to the theater as much and now with the closures, movie theaters that were already suffering prior to shut downs, these chains are going to be impacted. Even when the theaters re-open (whenever that is), people will be questioning the cleanliness and safety of the theaters after a pandemic, more people might prefer to stay in their homes to view new released content. So with AMC and Regal banning together to prevent Universal Releases, it begs the question, will other studios who follow in Universal’s footsteps with same release practices be subjected to same consequences or will they wait and see?
Is this debate over? No, following all of this riff raff, The Academy Awards announced last week updates for film eligibility, for the first time in the 90+ Year Run, they will be allowing Films to be considered for Best Picture even if they are not released in theaters. This is huge – previously, all films had to be released in a theater in order to be considered for the most coveted Oscar Award. They did release this statement with a caveat, this extension applies for films released in 2020 only, but this inclusion offers another incentive for studios to release straight to PVOD rather than being forced to be released partially in theaters. Netflix Movies for 2019 like “The Irishman” and “Marriage Story” had to be screened in theaters even if just for a short time to be Best Picture eligible. The rules are changing as the dominos fall.
The debate will be on-going and no one really knows what the future of cinematic releases is going to look like – but one thing is for sure, movies, studios and theaters all will have to change and we need to be prepared for that.
And that’s the stich.
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