Will the film benefit from Universal’s VOD experience? – Deadline

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Since cinemas are largely closed due to COVID-19 nationwide (with the exception of a handful of drive-ins), many things make financial sense for large studios when it comes to distribution of their movies right now.

It made sense that current theatrical releases such as Bloodshot, The Invisible Man, The Hunt, En avant, etc. would quickly go into homes via VOD, EST purchase or streaming.

It also makes sense for some low and medium budget movies that might have struggled in a normal theater market – that is the Paramount / MRC comedy Lovebirds, STX family action photo My spy and Disney Artemis Fowl – to avoid the cinemas and go directly to the houses. Considering that they are not paper events, a home outing might be the best destination for these titles, avoiding potential marketing costs and losses.

“Trolls World Tour” review: Justin Timberlake and Anna Kendrick return with a harmonic, fun, colorful and lively musical suite

Exclusive Trolls World Tour clip

Universal

However, when Universal decided that its $ 90 million DreamWorks Animation suite Trolls World Tour would go both for theatrical rental and on VOD (48 hours for $ 19.99) over the Easter weekend, instead of being reprogrammed like much of their other future theatrical release, the decision not only raised an eyebrow, but received a big growl from the theater owners. That said, exhibitors are unable to chat with Universal at this time; their biggest concern is whether they open in early June or not.

According to sources in Deadline, the Trolls franchise (in lifetime consumer products, global television licenses, home entertainment accessories, etc.) is estimated to be approximately $ 700 million since the first film, made under the administration of DWA boss Jeffrey Katzenberg, was released in November 2016 and finally reported $ 346.8 million at the global box office. Financial sources claim that this film, which carried a price of $ 125 million and $ 105 million in P&A worldwide, made a profit after all accessories (excluding consumer products) from $ 19 million. Global home entertainment and television revenues – and remember that this was not part of the cascade of theatrical revenues – were estimated to be around $ 170 million. The hype for TRolls was launched at the Cannes Film Festival that year with the debut of Justin Timberlake’s single “Can’t Stop the Feeling” which eventually went quadruple platinum with nearly 8 million copies sold and made a name at the Oscars. Dolls, a series of 52 derivative series Trolls: the rhythm continues on Netflix and an NBC Christmas special followed, among many other chotchkes.

And with the theatrical window model being the best way to optimize the profits on an event film priced at $ 80 million + before P&A, why in the name of God Universal would he even (largely) think of skipping the cinema Trolls World Tour, or involving a simultaneous VOD window? It’s part of a $ 700 million deductible! Wouldn’t it have been better to reschedule the film at a later date? There was clearly a desire to see more, as three trailers accumulated 130 million views before the availability of this photo tonight.

Trailer for “Trolls World Tour”: Ozzy Osbourne & amp; Rachel Bloom wants to turn musical diversity into a boneyard

Trolls World Tour

Shutterstock

The decision to take Trolls World Tour in earlier homes stems from a last-minute pivot by Universal.

In fairness to the studio, its original intention was to open Trolls World Tour in cinemas. He was even going to present it to this year’s CinemaCon exhibitors before this event was canceled. When MGM No time to die left Easter weekend for a Thanksgiving COVID-19 launch hopefully less hostile later this year, Uni moved Trolls World Tour than two weeks – because who wouldn’t want to enjoy one of the most lucrative holiday weekends at the box office? Easter weekend is where Uni first broke holiday opening records with Furious 7“$ 147.1 million in 2015 before being beaten a year later by Warner Bros. ” Batman v. Superman, which opened at $ 166 million.

Another proof that Uni had her theatrical heart in the right place: Trolls World Tour was receiving marketing support through the Comcast / NBCUniversal Symphony program – which only receives certain photos of events in a given year – the title being disseminated throughout the conglomerate’s portfolio, namely Trolls balloons in Macy’s Thanksgiving Day Parade, the replay of the Special Trolls Holiday on NBC, as well as custom parts on the NBCUni Bravo, E!, Universal Kids, USA and Syfy cable networks, as well as an extended Xfinity co-branded campaign. A Trolls a themed evening was even broadcast on Telemundo, which included four minutes of promo for the suite directed by Walt Dohrn.

Trolls World Tour

Deadline / A. DAlessandro

But then the theaters began to close gradually, New York and LA being forced to close, and it was then that Uni, in its risk analysis, chose to carry out a truncated window experiment which, in recent years , was allegedly championed by NBC Universal CEO Jeff Shell. Historically speaking, the conglomerate attempted (and withdrew) to crunch the window with the comedy Ben Stiller-Eddie Murphy 2011, Heist Tower.

A big factor when it comes to putting Trolls World Tour at home with all available theaters: much of the global media buying had already been planned with promotional partners (such as Oreos) and commitments to ready-to-use consumer products. Another interesting tidbit is how the Trolls brand found a good life in the streaming window after its life in cinemas: Netflix ran eight seasons of Trolls: the rhythm continues. The young fans of the franchise were already at home.

But wait a second. What about Mulan?

Mulan

Disney

Disney released this film 16 days before it opened on March 27 (in the United States and worldwide). Admittedly, Disney risked losing millions for all the media they had already spent. Why didn’t their promotional partner and their commitments in consumer products force them to stay put, or at least to consider VOD?

When it comes to moving consumer products and promotional partners to a film, anything is possible. This can be accomplished, just at a cost. And in some cases, like with No time to die, certain products are on a timeline and have just been released, that is to say the Omega watch for the film 007 released in December. Industry funding sources believe that even with Trolls World Tour going from a largely theatrical outing to a VOD outing, they had to eat some money. We will enter dollars and cents, black and red ink, later. What is entirely fair to say is that Uni did not orphan the film; they supported it as a complete theatrical outing, with constant pumping in television and online commercials from tickets from sister company Comcast Fandango, which has its own PPV arm FandangoNow.

Yet many questions arise as to whether Trolls World Tour experience will make money, and there are no concrete answers, but here are some tips:

At the price of $ 19.99 for a 48-hour rental, will everyone at home want to see what should have been a theatrical release?

Floyd Mayweather Conor McGregor

REX / Shutterstock

May be.

Exclusive boxing matches are just about the only types of PPDs that have made a lot of money to date. Floyd Mayweather Jr, 2017 vs. Conor McGregor attracted 4.3 million domestic purchases and $ 600 million in revenue for Showtime, more than each of the fighters’ combined paychecks. But it was $ 99.99 a pop. You have to take into account that when it comes to watching movies at home, VOD buyers are not in droves as they were in the late 1980s / early 1990s. With services streaming subscriptions like Netflix, Hulu, Amazon, CBS All Access and even HBO Go at consumers’ fingertips, will cash-strapped quarantine consumers graze outside of these comfort zones and pay 19 $ 99 for a security that will expire in 2 days? Hmmm.

Some analysts predict yes, guessing 9M-12M global transactions for Trolls World Tour in its first VOD cycle, about $ 200 million in initial revenue.

Lionsgate

For reference, the John Wick 3, who made more than WW $ 326 million, reported 3M units during the first month of his home entertainment window, and that from different prices in packaged media, electronic sales and VOD. Lionsgate yelled that this was his best home entertainment income for a title in a month since 2014 The Hunger Games: Mockingjay – Part 1.

Even after the 80% to 20% rental share of studio / VOD retailers (which is better than the 50/50 split between a studio and an exhibitor), that extravagantly projected $ 200 million could cover Trolls World Tourthe cost of production of $ 90 million, and assumed $ 30 million of global P&A to promote the current VOD release (some rival distributors doubt this number of P&A, and believe that although global marketing is less than $ 100 million dollars, Uni could be at the mercy of more than $ 30 million). Also covering Trolls World Tour’s is a Hulu streaming window transaction valued at approximately $ 25 million.

Studios generally do not report video revenues, mainly because there is no efficient, central means of real-time monitoring like Comscore’s box office data system (a report linking cinemas and studios). Home entertainment funds are usually reported by several outlets (for example, GooglePlay, cable systems) and these numbers are often delayed in arriving at the studio.

Those close to Trolls World Tour say their costs are covered, and that they will be fine with this experience.

Deadline funding sources disagree, unable to calculate how removing a theatrical window will benefit downstream revenues for Trolls World Tour. Will people want to rent or buy it in the following windows? For this reason, some believe that the sequel is ready to lose at least its production cost ($ 90 million). Remember, that global home entertainment and TV figure that we gave you earlier of $ 170 million for the first Trolls? This was boosted by a $ 346.8 million WW box office.

“Look, in today’s environment with closed theaters, it stands to reason that all of the big studios will experiment where they can by putting remarkable films at home; just to see what’s going on, “says a major studio marketing boss,” that doesn’t mean we turn our backs on theaters or the theatrical window model. “

f9 super bowl trailer

“F9”
Universal

And when it comes to the idea that theater owners will be like elephants and will never forget what Universal did here by putting Trolls World Tour into homes as soon as possible: no matter how angry they are now, they certainly won’t F9 or Minions: The Rise of Gru in their cinemas next year.

Rick Roman, owner of an independent theater with cinemas in Kentucky and Delaware, sympathizes with Universal at the moment, but insists on caution:

“With the closure of all cinemas, Universal’s decision takes on its full meaning. People must be entertained while camping at home. If this crisis becomes the justification for the studios to get what they want, which is day-to-day VOD with theaters, then the $ 11 billion golden goose egg will be fried. “



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