How ‘Trolls World Tour’ Tests the Future of Studio Movies With On-Demand Release

Thanks to the cornavirus pandemic, Universal this weekend is launching a nationwide test case of whether moviegoers will be willing to pay premium prices for studio films as video on demand home releases — and skip movie theaters altogether. The at-home release of DreamWorks Animation’s “Trolls World Tour” may have been prompted by the nationwide closure of movie theaters, but the industry will be watching closely the results of this unprecedented release. What exactly constitutes success for “Trolls World Tour” isn’t even clear to Universal, as a home release of this kind has never been attempted by a major studio. The first “Trolls,” released in November 2016, had a $46.5 million opening weekend in theaters and went on to gross $153.7 million in North America and $346.8 million worldwide, on a budget of roughly $125 million. While there are no publicly available means of tracking VOD performance, it’s highly unlikely that “World Tour” could make that much in rental sales. Depending on where a family of four lives, they could pay as much as $64 for four tickets at a theater. Since Universal is making “World Tour” available starting Friday for a 48-hour rental at a suggested price of $20, that would mean that “Trolls World Tour” would have to sell just over 2.3 million rentals this weekend to match the theatrical opening weekend of its predecessor in digital sales. But even if this home release isn’t as profitable as a theatrical opening would have been, “Trolls World Tour” could be an important barometer in how customer viewing habits are changing — perhaps even permanently — as a result of the COVID-19 lockdown. Already, Universal has had some success with films that were forced into home release early by the pandemic. During the last week of March, Fandango reported that Universal/Blumhouse’s “The Invisible Man,” which had grossed over $100 million in theaters, was the top-selling film on Fandango’s VOD service FandangoNOW, which was experiencing record usage due to widespread quarantines. “I think the measure of success isn’t going to be in figures but just in reception from parents, from how comfortable they are in buying the movie and what their experience is watching the movie with their kids,” comScore analyst Paul Dergarabedian told TheWrap. “Without a solid revenue metric, I think what we will have to look at is social media. How popular is the film? Is there a lot of buzz with families and is it a popular option this weekend?” At the start of 2020, Universal/DreamWorks Animation’s “Trolls World Tour” was seen as a modest release on the box office calendar, an animated film to help tide over family audiences (and movie theaters) until the summer blockbusters came pouring in. When Universal announced on March 16 that it would be releasing the “Trolls” sequel day-and-date in both theaters and for VOD, it was done with the plan that both options would be available for families, according to individuals with knowledge of the film’s release plans. “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,” NBCUniversal CEO Jeff Shell said in a statement announcing the on-demand release. In a matter of days, that quickly changed. New guidelines from the Center for Disease Control advising against gatherings of more than 10 people forced theater chains to announce closures in rapid success. As of this past weekend, only about a dozen of the over 5,500 movie theaters in the U.S. were still open, and those theaters are drive-ins that have been able to adhere to social distancing guidelines. That means for millions of American families, this film will be seen this weekend on their TVs rather than in a theater. While the coronavirus forced Paramount and MGM to move “A Quiet Place — Part II” and the James Bond sequel “No Time to Die” from their April releases, “Trolls World Tour” stood in a different position on Universal’s release slate. Unlike those two films, this animated family film is not a tentpole release whose success is critical for the studio. For Universal, that would be the “Fast & Furious” franchise, whose next installment, “F9,” the studio chose to move from this May to 2021 in the hopes of giving it the full theatrical release it needs to be profitable. “Trolls World Tour,” meanwhile, is the sequel to a November 2016 film that grossed $153.7 million in North America with $346.8 million grossed worldwide. While that’s a far cry from what the “F&F” films have made, the $100 million-plus budget of the sequel and Universal’s substantial marketing spend prior to the theater closures led Universal to do what movie theaters have fought against for years: to forgo the theatrical window and make the film available for home viewing on Easter weekend. While this adjustment forced Universal to speed up the process of converting the film into unique digital formats used by Google Play, Amazon and other digital distributors, it was able to do so having made the decision to jump to VOD roughly a month in advance. The general belief among theater owners is that the exhibition industry will be able to get back on its feet relatively quickly once cinemas are given the all clear to open again. But some warn that if moviegoers — particularly families — get used to the experience of home movie viewing while in quarantine, it could change how often they pay for a night out at the cinema. “There’s going to be a lot of change in consumer habits, and if home premieres like ‘Trolls World Tour’ really work out well with families, they may find that they prefer seeing a brand new movie with their kids in the comfort of their own homes rather than driving out and paying for parking and other things,” Cinetic Media founder John Sloss warned. There is also the possibility that the pandemic’s economic impact, now projected to be far more damaging than the 2008 recession — could also push customers away from the theater and towards home viewing simply because they won’t be able to afford going out as much as they used to. Streaming and VOD could simply become the one option that many working class customers will be able to keep in their budget, though even that may be affected as well. “We know the economy is going to hit consumers hard. We just don’t know how hard and how much it will change their habits,” Dergarabedian said. “Ultimately, the need for families and general moviegoers alike to go out should help movie theaters rebound, but for a lot of people struggling to make ends meet, watching spending on movie tickets and the number of streaming services they subscribe to at least in the near term, for some may be necessary.”