New Movies Head to VOD While Theaters Go Dark

While Americans go into lockdown, self-isolating or even self-quarantining in their homes and generally practicing social distancing to avoid further coronavirus spread, Hollywood has been postponing theatrical releases and moving up home video dates to appease the many movie fans stuck in place. Frozen II arrived early on Disney+ over the weekend, Star Wars: The Rise of Skywalker hit digital ahead of schedule, and Birds of Prey and The Gentlemen are coming to the small screen sooner than planned. But so far one studio, Universal, is taking a bold step further.

Most of the moved-up releases are sticking to the traditional VOD model. The Rise of Skywalker, Birds of Prey, and The Gentlemen will all be available to buy on digital for about $20 with cheaper rentals coming later. Universal, though, is delivering The Hunt, The Invisible Man, and Emma to VOD platforms this Friday with price points of about $20 to rent for a 48-hour period. And the studio announced they’ll be doing the same for the upcoming animated sequel Trolls World Tour, which is set to hit theaters in the US on April 10th. The movie will be available digitally on the same day.

Complaints about the cost came immediately following the news, but especially with Trolls World Tour, families would have spent much more to see the movie in theaters on opening weekend. Sure, it’s on a smaller screen at home, and the greater communal experience is lost, but the price tag should be worth it for fans who don’t want to see it postponed and also need more entertainment options for the kids who are homebound indefinitely. I was already curious how the sequel would have done at the box office since animated sequels have been underperforming of late, especially when the franchise has new episodes of a TV spinoff available to stream regularly, a la DreamWorks Animation and Netflix’s Trolls: The Beat Goes On.

The other Universal titles might seem less-worthy of the steep rental fee only because they’ve already been in theaters. But The Hunt will be hitting VOD just one week after opening poorly last Friday (unfortunately just as social distancing became the new normal). The Invisible Man has only been out for three weeks. Emma opened in limited release a week earlier but has only been in wide release for two weeks. Comparatively, Birds of Prey and The Gentlemen, are in their sixth and eighth weeks, respectively. Both are out of the box office top 10 and so less in demand.

Hollywood has been toying with the idea of day-and-date “premium” VOD releases for theatrical features since the option first became a possibility, decades ago. With movie attendance dwindling yearly, the studios have considered making new releases available at home the same time as in theaters for a relatively high cost. At times, that figure has been teased at $60, then $50, then $30. Universal’s decision to go with a $19.99 tag is on the low end of what’s been proposed in the past. Especially since the high-profile day-and-date release of Steven Soderbergh’s Bubble in early 2006, the idea has been viewed as inevitable, save for the obvious fight put up by theater owners.

“It’s the biggest threat to the viability of the cinema industry today,” the National Association of Theatre Owners (NATO) president, John Fithian, said 14 years ago. The big cinema chains refused to show Bubble and other day-and-date titles, but independent theaters and metropolitan chains specializing in limited releases like Landmark Theaters were and have been on board. Some distributors have even allowed VOD release to happen before theatrical in recent years. And for these companies, the price point has never been huge. Some have been included in subscriptions (SVOD) while others have ranged between $6.99 and $9.99. The strategy hasn’t kept such films as Bubble, Margin Call, and Enron: The Smartest Guys in the Room from being hits on the big and small screens over the years.

But just because the COVID-19 coronavirus pandemic is a special circumstance allowing for a major such as Universal (and likely other studios joining them soon) to circumvent theatrical exclusivity now doesn’t mean this will become common practice when the emergency is over. After all, Universal’s parent company, Comcast, owns 70 percent of the online ticket seller Fandango, the business of which depends on people going to the movies in cinemas (AT&T, owner of Warner Bros. holds the other 30 percent). Whether the current model could be amended when theaters are open and/or operating fully again is the real question. This gives Hollywood a foot in the door as they give consumers a tease of the option, which could continue at a higher cost afterward.

Even while unprecedented on this level, the day-and-date Premium VOD model has done well enough for independent titles and distributors like Magnolia, IFC Films, and Gravitas Ventures that they’ve kept in business for decades, and the theaters they work with have been able to stay in business as well. Majors have dealt with the strategy before in other unique situations, too. Sony released the controversial comedy The Interview on VOD the same day as in theaters. The movie would otherwise have just been dumped to VOD due to North Korea’s threat, but in the end, a few hundred theaters were willing to screen it simultaneously. It still grossed $6 million domestically while making $40 million digitally at the same time.

A few years earlier, Universal tried, with no special reason, to put Tower Heist on VOD three weeks after its theatrical opening at a price point of $59.99. Theaters threatened a boycott, and the “experiment” was canceled. That same year, 2011, still marked an advance from Hollywood in shortening the window between theatrical and home video release by experimenting with putting movies out on VOD ahead of their DVD and Blu-ray copies, a practice that is now the norm. Studios have taken an inch wherever they can, so long as NATO approved. So far, Fithian hasn’t released a statement on Universal’s latest move*.

Could the industry change drastically beyond the coronavirus crisis? Yes, but the future of the movie theater business is already uncertain because of the current emergency. Worrywarts have feared the end of cinema for a long time, with various advances in the 21st century, whether it be digital filmmaking, digital distribution, streaming platforms, or whatever, being causes for alarm for traditional film lovers. Studios will continue to need the attention and exposure of theatrical releases, and likely the Academy of Motion Picture Arts & Sciences will have some influence (Universal’s strategy may keep Trolls World Tour from being eligible for Oscars).

The cynical attitude right now is to expect the worst in terms of exploitative capitalism in the midst of a disaster, but now is not the time for protesting the decision or its details. Universal, understandably, isn’t necessarily out here trying to help people during a crisis, except where it benefits their financial needs to supply a demand. That doesn’t mean it’s not a welcome offer. And considering the studio had already moved its biggest title, F9, almost a year, maintaining a certain timing for its theatrical release rather than just placing a hold, they still believe in the big screen.

*UPDATE: Here is NATO’s statement on Universal’s pivot to VOD:

Although there has been speculation in the media that the temporary
closure of theaters will lead to accelerated or exclusive releases of
theatrical titles to home streaming, such speculation ignores the
underlying financial logic of studio investment in theatrical titles. To
avoid catastrophic losses to the studios, these titles must have the
fullest possible theatrical release around the world. While one or two
releases may forgo theatrical release, it is our understanding from
discussions with distributors that the vast majority of deferred releases
will be rescheduled for theatrical release as life returns to normal.