Each Monday for a long time now, Plugged In has dutifully reported on the weekend box office.
Then that dreaded C-thing showed up. Coronavirus shuttered businesses everywhere—including, obviously, theaters. And that meant our weekly Movie Monday report has gone into mothballs temporarily as well.
Movie studios are still very much in the process of trying to figure out how to respond to this crisis. Many big films have pushed back release dates until later this year, next year or even indefinitely. After all, the multi-million-dollar investments in these properties demands an optimal environment to seek the best possible return.
And all of that is a somewhat rambling prelude to my focus today: Trolls World Tour.
This sequel from Universal Pictures has become something of an experiment, a litmus test for whether a new way of distributing big-budget Hollywood movies is potentially viable. Here’s why.
Universal priced a 48-hour on-demand rental at $20. There are two ways to look at that price point. The way the studio hoped people would see goes something like this: “Man, what a bargain. We couldn’t take our family to the movies for less than $50 or $60. Where do I download it?” On the other hand, I’ve talked to several friends who enjoyed the first film who said something to the effect of, “Twenty bucks to rent a movie? Are you kidding me? No way.” To them, the comparison was not theatrical prices, but what they’d normally pay to stream other movies on-demand, typically between $4and $6. And I have to confess, I’d personally lean in the latter direction.
Interestingly, though, enough consumers chose Option A to push Trolls World Tour into record—if strangely unreported—territory, revenue-wise. Unlike a normal box-office update, Universal hasn’t revealed a single, solid figure for the sequel. Instead, deadline.com reports:
Trolls World Tour did 10 times that of Universal’s previous opening-day digital champ, Jurassic World: Fallen Kingdom, which according to home entertainment sources did around $2 million-3 million stateside on day one. Avengers: Endgame, per sources, had a first digital domestic rental week of $30 million in flash reports, and the extrapolation off first-day numbers is that Trolls World Tour will far exceed the figure amassed by the Russo Brothers-directed sequel.
So all we know for sure (we think) is that Trolls World Tour managed to make $30 million or so in its home-based opening weekend. That number might have been seen as underperforming for a franchise animated sequel. But the economics are different. Whereas studios usually see about 55% revenue from theatrical releases, the percentage is significantly higher, around 80%, for an on-demand release.
Combine that with lower distribution costs, and you can see how some in Hollywood might begin to question whether the age-old theatrical release model is the only viable path to releasing a big-budget movie. Indeed, theaters are struggling mightily during the coronavirus shutdown, and they’re none too pleased about the possibility of their longstanding monopoly on first-run movies eroding further, according to the Los Angeles Times.
At the end of the day, the jury is still out regarding the extent to which Trolls World Tour’s apparent success marks a new chapter in the way movies are distributed, or whether it was just an aberration spawned by pent-up demand that will recede when theaters eventually reopen.