By Hollywood is in a state of turmoil. Thanks to COVID-19 putting a damper on… well, everything really. No industry was hit quite as bad as the entertainment industry. Carefully curated plans were destroyed, prime release windows will be missed, and several major corporations will most likely lose hundreds of millions, if not billions when all is said and done. Even the future of some theater chains are in doubt, as AMC has been on the brink of collapse for a while now.
It’s a pivotal time to say the least. As it stands, the first major release after this pandemic hopefully dies down will be Pixar’s Soul, which is set to release on June 19th. Even then, that date may change because nothing is certain anymore, space is warped, and time is bendable. Because of this uncertainty, several movies have just dropped trying to have a theatrical release in general, with Artemis Fowl opting to go straight to Disney+ instead of having a theatrical release.
But the most important movie of the moment, and probably for the entire year, isn’t going to be either of those two. It’s not going to be a film festival darling with tons of critical praise. It’s not even going to be a movie that becomes one of the highest-grossing movies in the world. Instead, the most important movie of the year is probably going to be Trolls World Tour. The Justin Timberlake/Dreamworks animated musical is going to determine how Hollywood and theater distributors release movies for the foreseeable future, if not for years to come.
To give a little background information, while every studio was adjusting their release schedule thanks to COVID-19, Universal did something unheard of. Instead of delaying Trolls World Tour, they decided to keep the release date and instead just make it a digital-only release, charging $19.99 for a rental. I repeat, Universal decided to charge 20 freaking dollars for you to rent the sequel to Trolls.
It’s important to note that movies that were still in theaters in early March took this same approach. Movies like Birds of Prey, Sonic the Hedgehog, The Invisible Man, Bloodshot, and Onward all had digital releases around the time theaters began to shut down, also retailing for 20 cucking dollars per rental. In all of those instances, the movies were still able to be in theaters for several weeks, effectively making a large amount of their budget back already. The Invisible Man, with a budget of $7 million, made around $125 million while it was in theaters before being shut down. It made a majority of its money, so the digital release served as a victory lap. Disney also decided to take Onward, which was already underperforming by the time the pandemic hit, and leveraged it as a Disney+ release, coming to the service April 3rd. It still released on digital platforms to rent for a brief amount of time, but Disney used it as an opportunity to bolster their streaming service, with Disney+ recently hitting 50 million subscribers as of last week.
But Trolls World Tour is different. It’s completely circumventing theater chains in general. It had a massive marketing campaign for the theatrical release and kept on trucking with it up until its digital-only release. It’s a test by Universal to see just what they can and can’t get away with and you better believe all of Hollywood is watching because if Trolls World Tour is a success, then get ready for some major changes in how you watch new movies.
Let’s talk about that price point for a minute. While many people balk at the cost of movie tickets today being $11 (or more, depending on where you live) without tax, and that’s before you decide to opt-in for 3D gimmicks or snacks, Universal, and to an extent, all distributors, are playing a game to see just how much they can charge for a digital rental. With theater chains taking a portion of ticket proceeds, by making a movie as a rental only release, studios have more liberty to charge how much they see fit for their movies. Yes, all of the COVID-19 movies may be $20 to rent, but there’s no guarantee that those prices are fixed and will remain that way for future movies.
Let’s be honest with ourselves here, there really wasn’t anything that was “must-see entertainment” that released in March. I’ve gone over how not many people seemed to care all too much about Onward and the less said about Bloodshot and The Hunt the better. But now really ask yourself this; would you pay $20 to see any of those movies? Would you? Would you really? Chances are no, you wouldn’t. You would laugh in any studio executive’s face if you were being charged that much to see any movie. The $11 ticket price may be steep, but there were always alternatives. Most theaters take part in a Super Tuesday offer where tickets are discounted on Tuesdays, with tickets also being far cheaper if you saw them earlier in the day at a matinee screening. Or you could have even taken part in a theater’s subscription program where you can see several movies for a monthly fee that honestly pays for itself. That choice is now gone. You either play by the studio’s rules or you don’t get to see the latest releases.
To play the devil’s advocate for a bit, there actually is some merit for the $20 price point being a fair one. Instead of one person paying $20 to watch a movie like Trolls World Tour, that price becomes much more affordable and sensible if you have children with you. If you have a typical family of four, what was once $20 per person instead becomes $5 per person, which is honestly a better deal than what most theaters provide. While a child’s ticket at most movie theaters varies in terms of consistent pricing, they tend to average anywhere between $6 to $9. No matter how you slice it, the $20 price tag is a tempting, and more importantly affordable, one for Trolls World Tour.
The problem here is that Trolls World Tour is a family movie. It was intended to be seen by a child and their parent. Little kids don’t just get dropped off at a movie theater and anymore and told to have fun. A parent usually accompanies a child at movies now. Even the adults like myself who would see kids movies alone are in the minority. Sure, I have to do it because it’s my job, but I can sympathize with the teenagers or adults who sit in a theater alone watching Missing Link because they want to. So yes, family movies can work under this model, but what about movies from other genres? Horror movies may be cheap and easy to make, but if you were itching to watch The Hunt and no one else wanted to watch it, would you really pay $20 to see it? What about something like Uncut Gems? The fewer people you have watching a movie, the more unappealing that $20 price point becomes.
That’s just assuming studios decided to keep that $20 price point. Again, Trolls World Tour isn’t exactly must-see entertainment. It can get away with being priced the way it is because no one really cares all that much about it. But look at upcoming major releases. Let’s assume, hypothetically of course, that Disney decided to turn Black Widow into a digital-only release. They would release it to digital platforms and it would stay off Disney+ for 90 days after initially releasing, similar to how Warner Bros. would structure their DCAU movie releases for their comic streaming service that just so happens to have movies and TV shows, DC Universe.
There is no way in hell that Disney would release that movie to rent digitally for $20. If you were to get a crowd of 6 people together to watch Black Widow in one room, Disney would lose a ton of money on the arrangement. It’s a bad business decision, so what’s to stop Disney from charging more for it? Who’s to say that Disney can’t charge $40 to stream the movie from the comfort of your own home with a few guests? Now you may say that Disney would never be that shameless and greedy, but you’re forgetting that this is Disney we’re talking about.
While writing this, I actually had to stop myself and think about whether or not this would be a smart business decision for Disney or not. Yes, Disney movies typically perform amazingly at the box office, usually becoming the highest-grossing movies of their year. Just look at last year at how many movies made over $1 billion for them. But if Disney is able to control the prices of their releases, they can take a hit on some profits for a small sector of audiences to make an unprecedented amount of money on individual rentals. If you could watch Avengers: Endgame from the comfort of your own living room or bed without having to go to a theater, you probably would. If that movie was a digital-only rental for $20, and if you were watching it alone, you may grumble about the price but you would still watch it. If it was $40, would you have the self-restraint to withhold watching it for three months? Would you be able to resist Disney weaponizing FOMO more than they already have to watch it for free on Disney+?
I admit that’s an extreme example of what could happen, but is it really that improbable? When this pandemic is over and done with, companies are going to be hurting. They would have gone three months without profit and will need income fast. AMC is DEFINITELY going to need income too, so a rise in ticket prices will probably be a certainty once this is all done. Companies are going to want money, and if they can squeeze more money out of people with limited digital releases that come at a higher price, they’ll do it. Of course they’ll do it. Why wouldn’t they?
What I find curious about all of this is that we really have no idea how well any of these movies are doing as digital releases. Because corporations are always mum about how well digital releases do, we only have a few estimates to go off of. Business Insider lists Trolls World Tour as being number one on iTunes for the weekend, but what does that really mean? How many people are downloading it, and what is the magic number for Universal to turn a profit for this experiment? If we want to factor in the marketing campaign and the production costs totaling somewhere in the realm of $150 million, then that number will need to be 7.5 million rentals. Honestly, with everyone cooped up at home, that’s not an unheard of number. It’s totally plausible that 7.5 million people around the world will rent Trolls World Tour.
So it actually turns out that a mere hour before this article was meant to go live, Universal decided to reveal how well Trolls World Tour did on its opening day and the results appear to be very, very positive for them. On release day, Trolls World Tour pulled in around $20 to $30 million on its first day of digital release, becoming the highest-grossing digital-only debut of all time. To put that into perspective, Avengers: Endgame made $30 million over the course of one week when it released digitally, and Troll World Tour looks like it’s going to eclipse that without much effort. While it’s going to be a while until we learn exactly how well the movie did, as is the case with gauging most digital releases, but this experiment appears to be a resounding success for Universal.
Things are going to changes in regards to how we watch movies. The simple fact of the matter is that we don’t know if things really will go back to normal once the pandemic ends. Probably not, but how much they change will be interesting. Like characters from The Walking Dead, theater chains will remember how Universal behaved during this and spitting in their faces. If Universal turns a profit, which it looks like they very well could, then what’s to stop other studios from joining them in forgoing the traditional theater experience? If they fail, then how will distributors deal with Universal features going forward? Like all things nowadays, there’s a lot of uncertainty, but at least this little thought experiment got you to think about something else besides Joe Exotic and Carole Baskin.
