Nolte: Pay-Per-View Success of ‘Trolls 2’ Could Change Hollywood Forever

Justin Timberlake and Anna Kendrick in Trolls World Tour (2020) Titles: Trolls World Tour People: Justin Timberlake, Anna Kendrick Photo by © 2019 DreamWorks Animation
DreamWorks Animation

Birth of a Nation! The Jazz Singer! Easy Rider! Star Wars! …  Trolls 2?

Are we looking at a scenario where a movie titled Trolls World Tour could change Hollywood forever?

Possibly.

In fact, I’d say it’s more than possible.

First a little background…

Going back more than a decade, Hollywood has wanted to not only shorten the window between the theatrical release of a movie and its arrive on home video, the industry has also wanted to release a movie on pay-per-view at the same time it hits theaters.

Why?

Well, there’s a couple reasons…

The first is advertising costs. These days it costs as much to promote a movie as it does to produce a movie. This means that if you roll out the movie twice, once in theaters and once on home video, you have to pay for two advertising campaigns. So the shorter the window between the theatrical and home video release, the fresher the theatrical advertising is in the consumer’s mind, which means you have to spend less on the home video campaign.

As far as a pay-per-view release on the same day as the theatrical release, the idea is to attract customers who don’t normally go the movies but who want to see the movie when its released and want to be part of that conversation. In this case, you are not purchasing your own copy of the movie, you are merely renting the movie at a premium price for 24 hours.

So what’s stopped this from happening…?

Theater owners.

Movie theaters have threatened to blacklist any movie released on pay-per-view or on home video outside the accepted eight to twelve week window. For obvious reasons, theater owners are terrified moviegoers will embrace the idea of seeing a just-released movie at home instead of the theater. And so, for the last decade, it’s been a game of chicken, where the studios dare not antagonize the theater owners, especially when the studios don’t know if moviegoers will embrace paying $20 to rent a just-released movie for 24 hours. Think about the risk; just like that, they could lose tens of millions of dollars on their investment. No one wants to take that chance.

The coronavirus changed all that.

At first, after the virus hit and America’s movie theaters closed, the studios immediately moved titles that were in theaters to pay-per-view. Bloodshot, The Invisible Man, Onward, The Way Back, and a few others had not completed their theatrical run, so for $20 you could rent them at home.

There was nothing earth-shattering about that move. What else could the studios do?

But then Universal decided to take the leap…

Rather than postpone Trolls World Tour, a sequel to its 2016 hit — instead of doing what every other studio did: rescheduling it for theatrical release after the coronavirus passes — Universal went ahead and offered the world premier on pay-per-view… Universal went ahead with the experiment… And according to Universal, Trolls World Tour has earned more money in its three weeks as a pay-per-view offering than the original did in theaters over five months.

That sound you just heard could be everything changing forever.

And here’s the real kicker… When a movie is released in theaters, the studio only retains about 50 percent of gross ticket sales. On home video, the studio keeps closer to 80 percent of that haul.

So not only is Trolls World Tour making more money, the studio is keeping a whole lot more of that money.

The question is, though, do we believe Universal? Hollywood accounting is notoriously shady.

Well, there’s good reason to believe these numbers. Actually there are two good reasons: SCOOB! and The King of Staten Island.

SCOOB! is a reboot of the Scooby-Doo franchise that was originally set for theatrical release, as was Judd Apatow’s latest comedy The King of Staten Island.

Unless Warner Bros. had some confidence in what Universal is saying about Trolls 2, they would probably not risk releasing SCOOB! on pay-per-view next month. But they are.

The King of Staten Island, however, is a Universal release, which tells you Universal has a lot of confidence in this business model after its experience with Trolls 2. Apatow’s last comedy, 2015’s Trainwreck, grossed over $140 million, so there’s no way Universal would gamble with leaving that kind of money on the table unless that previous gamble paid off.

Sure, it’s one thing to release these low-to-mid-range budget movies on pay-per-view… It’s one thing to release them in the middle of a pandemic when no one can go to the movies… So I’m not yet convinced we’re looking at the future. But I’m guessing theater owners are a little worried right now, and not without reaon. Also, think about this…

The threat of the virus will remain long after the country reopens. Until there’s a vaccine (and there may never be a vaccine), people will remain wary about going to the movies. We could be talking about a year or two before people are fully comfortable returning to the movies. Until then, it just might be less of a gamble to release, say, the new James Bond movie on premium pay-per-view than into 4,000 mostly empty theaters.

If Universal decides to release Fast & Furious 9 on pay-per-view, which had been scheduled for a May 22 release, that would be the ultimate experiment, and I would happily plunk down the twenty bucks to participate in it.

Follow John Nolte on Twitter @NolteNC. Follow his Facebook Page here.

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