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Theater Owners Decry Universal’s ‘Trolls World Tour’ On-Demand Significance

NBCUniversal CEO Jeff Shell is taking a victory lap for the decision to debut Trolls World Tour on premium VOD instead of waiting for cinemas to reopen post-coronavirus pandemic, saying it could herald a permanent change in how Universal Pictures releases its movies.

Trolls World Tour racked up an estimated $100 million in on-demand rentals in its first three weeks of play in North America, more than enough to put the film on the road to profitability, according to the conglomerate. That’s not far behind the $116 million grossed by the original Trolls movie in its first three weeks at the 2016 domestic box office on its way to topping out at $153.7 million in the U.S. and Canada, not adjusted for inflation.

“The results for Trolls World Tour have exceeded our expectations and demonstrated the viability of PVOD,” Shell told The Wall Street Journal, which first reported the figures. “As soon as theaters reopen, we expect to release movies on both formats.”

Trolls World Tour Official Trailer

The National Association of Theatre Owners responded with its own statement, saying that 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.

“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.”

NATO also noted that consumer behavior over the last decade and a half shows that transactional video is in secular decline. Sales and rentals of individual titles were $24.9 billion in 2004 and shrank 62 percent to $9.3 billion in 2019.

Troll World Tour

Nor are Wall Street analysts quick to conclude that Trolls World Troll proves that premium VOD is a panacea. “There is limited information,” says Eric Wold of B. Riley FBR.

Universal did not release any preliminary international numbers for Trolls World Tour, which is presently available in a handful of European markets. The original 2016 film, like many Hollywood movies, made the majority of its money overseas, or nearly $194 million.

“What Universal did made sense for this movie. They had all the promotional deals in place that they couldn’t recreate a year from now. But I don’t think they can say this is now the reality for every film. It will be very film-specific. This won’t replace going to the theaters,” said Wold, noting that it isn’t clear whether the regular home entertainment window will be diminished by a premium VOD run.

For years, NBCUniversal and several other Hollywood studios have wanted to collapse the traditional three-month theatrical window and make titles available more quickly in the home for a premium price (the cost of renting Trolls World Tour for 48 hours is $19.99).

The Hollywood majors proposed several tests over the years — including Universal with 2011’s Tower Heist — but were always waylaid by fierce opposition from cinema chains.

Studios get to keep a far larger share of on-demand revenue than they do of box office revenue, or 80 percent. In this case, that equals nearly $80 million for Universal, slightly more the studio received back for the entire domestic run of Trolls ($77 million).

Overseas, the first Trolls earned $193.5 million for a global tally of $346.9 million. Universal has yet to release any premium VOD stats for a handful of European markets where Trolls World Tour is being offered. The family film will roll out in a number of other market this fall, whether in theaters or on digital.

You can read additional details at The Hollywood Reporter.

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