One of the biggest stories of the current news cycle revolves around theates banning Universal movies from their locations. This comes after Universal doubled-down on their position to pivot towards Video-On-Demand (VOD) content.
With theaters closed all around the globe, Universal went outside the norm to provide Trolls World Tour to the masses. Running out of Netflix backlog and tired of watching re-runs of Supernatural, the general public gobbled up the much-anticipated Trolls sequel.
Universal is in the game to make money, and if they can still make a boatload of money by cutting out the theater and reaching a wider audience, then that’s exactly what they’re going to do.
Let’s look at some talking points:
- Trolls World Tour was released directly to consumers for the whopping price of $19.99 for a 48-hour rental. Basically, if you have more than two people in your family, it’s already a better deal then spending money for some comfy recliners at the theater.
- The movie made more than $100 million in three weeks. Take a look at the original Trolls movie and the sequel already passed the total revenue generated from its entire theater run.
- Cineworld (owner of Regal Entertainment) has joined AMC Theaters in their boycott of Universal films, basically daring them to prove that people want movies on-demand in their homes.
- Theater ticket sales have been on the decline, meaning that these theaters need to reinvent their offerings to get folks in the door. The main draw for a person to go to a theater is to get that ‘opening night’ experience. But ticket prices keep rising in exchange for a reserved recliner, which probably isn’t enough for most folks.
Theaters certainly lack the leverage in this fight. And picking a fight with one of five biggest film studios is an aggressive move that might not pan out the way they’d like. That would be like me buying a fresh pretzel with cheese, opening my own pretzel stand, and then complaining to my pretzel-guy that he better not sell those pretzels to anyone else.
He is going to take those pretzels elsewhere.
It will be interesting to see what other studios do during this time that theaters are closed. We’ve already seen a fair share of delays across film and television, but the distribution model for entertainment is ripe for an overhaul. Even a steep price tag for entry more than pays for itself if you can get some extra viewers in the room.
At the end of the day, people are going to get their entertainment in the most desirable and convenient fashion. Redbox shook up the movie rental industry, and Netflix (along with other streaming services) continue to take market share away from Redbox.
Everything is in a cycle of continuous improvement, and if Big Theater wants to play hardball they may be in for a rude awakening.
Theaters require movies to be successful. I’m certainly not going to a theater to eat one of their pretzels that’s been spinning in the window for five hours; I’m going for the movie. Without movies, a theater is an over-priced restaurant serving microwaved appetizers. Although movie-theater popcorn is hard to beat.
I’m with Universal; VOD is the way of the future and it’s only a matter of time before theaters begin to fold. How are we going to get that opening night experience? Time will tell.
Either way, movies will outlast theaters.
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