"Trolls World War"? Theaters react in the universal announcement of PVOD

Universal's decision to bring the long-awaited family sequel to DreamWorks Animation Trolls World Tour in homes at the 48-hour rental price of $ 19,99 during theaters closing for COVID-19, it reportedly amassed $ 95 million in rents in the first 19 days of release. With VOD terms in favor of the studio at an estimated 80%, Universal deposited approximately $ 77 million in revenue before marketing expenses. However, this uncharted territory raises questions about the effects this will have on upstream movie revenue, compared to cheaper rental launch windows, home entertainment, and what it means for the future relationship between production studios and cinema.

The PVOD experiment was such a success Universal tables announced Tuesday that it will continue to release premiered films on demand and also in theaters. This statement quickly inspired retaliation from the main cinemas: the terms shared between the studio and the exhibitors range from 50/50 to 60-65 / 40.

AMC theaters , The largest chain in the United States UU. And owner of European exhibitor Odeon, he was the first to announce that he will no longer show Universal films at its 1.000 locations worldwide: “This radical change from Universal to the business model that currently exists between our two companies does not it represents nothing but a disadvantage for us and is categorically unacceptable to AMC Entertainment, ”CEO Adam Aron wrote to Universal President Donna Langley.

Universal replied to AMC:

“Our goal in liberation Troll: world tour At PVOD it was to offer entertainment to people who take refuge at home, while cinemas and other forms of external entertainment are not available. Based on the enthusiastic response to the film, we believe we have made the right move. In fact, given the possibility of not starting Troll: world tour, which not only would have prevented consumers from experiencing the film, but would have negatively affected our partners and employees as well, the decision was clear.

Our desire has always been to deliver entertainment efficiently to the widest possible audience. We absolutely believe in the theatrical experience and have not made any contrary statements. As we said before, in the future, we hope to distribute future films directly in theaters, as well as in PVOD when this distribution point makes sense. We look forward to further private conversations with our trade show partners, but we are disappointed with this seemingly coordinated attempt by AMC and NATO to confuse our position and actions. ”

il National association of cinema owners (NATO) also went in and out with Universal, issuing a statement stating that the unprecedented circumstances of home protection from the pandemic are not indicative of "a change in viewing preferences for consumer films," adding that "while Universal may be satisfied with the PVOD results of Trolls World TourThis result should not be interpreted as a sign of a "new normal" for Hollywood. "NATO President and CEO John Fithian said," Universal has no reason to use unusual circumstances in an unprecedented environment as a stepping stone to avoid real movie releases ... We are confident that when cinemas reopen, studios will continue to benefit from the box office of world cinemas, followed by the traditional home launch “.

The studio responded, wondering whether AMC and NATO were conspiring, an allegation the trade association denied: “Unfortunately, Universal has a destructive tendency to announce decisions affecting its exhibiting partners without actually consulting with those partners. , and now to make accusations. unfounded without consulting their partners “.

Things got warmer on Wednesday Cinema gifts owner of the Cineworld group and of Europe International Union of Cinemas (UNIC) added his censorship to the conversation.

The Cineworld statement states:

“Universal unilaterally chose to break our understanding and did so at the height of the COVID-19 crisis when our business closed, more than 35.000 employees are at home and we still don't have a clear date for our cinemas to reopen.

Universal's decision is completely inappropriate and, of course, has nothing to do with bona fide business practices, partnerships and transparency. ...

Cineworld's origins date back 90 years in the industry and it was always open to showing any film as long as the rules were respected and not changed by one-sided moves. Today we clarify again that we will not be showing films that do not respect the windows, since it does not make any economic sense to us. We have full confidence in the industry's current business model.

Nobody should forget that the theatrical side of this industry generated an all-time record income of $ 42 billion last year and the film distributors' share in this was about $ 20 billion. "

The note also summed up a conversation between Cineworld CEO Mooky Greidinger and Comcast President Brian Roberts following the announcement of the release of PVOD in March:

“Your team's good words are useless if we can't trust you as a partner. The message that the media has interpreted is: “Hollywood breaks the window”, well, that's not true! All our partners have called us in a timely manner and told us that in the current situation they want to shorten the window for films that have already been released while cinemas close, most importantly they have assured us that there will be no changes in the their windows once The film business is back. Unfortunately, I missed a similar message in Universal's announcement ... not only was Universal not committed to the future window, but Universal was the only studio that tried to exploit the current crisis and offer a movie premiere & # 39; day and date '. which has not yet been published. "

UNIC echoed the sentiments of NATO:

“The performance of Trolls Word Tour It needs to be seen, and only seen, in the context of the exceptional circumstances surrounding its launch and the unprecedented times we are experiencing. When a third of the world's population is currently in some form of coronavirus lockdown and only 4% of the world's movie screens are open, it's no surprise that many have turned to VOD and other similar services. ...

Even the results of this title undoubtedly owe a lot to its commercialization as, for what was planned for then, a theatrical release. The sequel was also one of the few children's films to hit the market right now. … Everyone has had to make changes in their daily life and that includes movie fans. However, this should not be seen as a sign of changing preferences from the viewpoint of the public; After all, it is worth remembering that 2019 was a record year for theaters around the world “.