'Trolls World Tour' has history-making digital debut with nearly $100 million, provoking ire of theater owners

Ethan Alter
Senior Writer, Yahoo Entertainment

Updated April 29: Regal Entertainment — America’s second-largest theatrical circuit — has joined AMC Theatres in denouncing Universal’s stated plans to replicate the digital success of Trolls World Tour with other releases. In a statement, Regal’s owner, the Cineworld Group, labeled the studio’s intentions “completely inappropriate,” and goes on to state that Regal theaters “will not be showing movies that fail to respect the windows as it does not make any economic sense for us.”

“Cineworld’s policy with respect to the window is clear, well known in the industry and is part of our commercial deal with our movie suppliers,” the statement begins. “We invest heavily in our cinemas across the globe and this allows the movie studios to provide customers all around the world to watch the movies in the best experience. There is no argument that the big screen is the best way to watch a movie. Universal unilaterally chose to break our understanding and did so at the height of the Covid-19 crisis when our business is closed, more than 35,000 employees are at home and when we do not yet have a clear date for the reopening of our cinemas.”

The National Association of Theatre Owners has also weighed in on the developing controversy, which has serious implications for the future of moviegoing in the U.S. post-pandemic. NATO issued a statement yesterday following The Wall Street Journal’s story about Trolls World Tour that suggested the film’s success on VOD was due to extraordinary circumstances. This performance is indicative of hundreds of millions of people isolated in their homes seeking entertainment, not a shift in consumer movie viewing preferences,” the statement read. “It is not surprising that people under shelter-in-home ordinances for weeks on end with increasingly limited entertainment options would take advantage of the movie’s direct-to-VOD move to keep children entertained, even at a premium price.”

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Updated April 28: Trolls World Tour made some major noise when it became the first high-profile studio release to bypass theaters for an on-demand debut. And now Universal has proof of concept for that approach to the tune of $100 million. According to The Wall Street Journal, 5 million customers have powered the cartoon sequel to $77 million in rentals, which means that the studio has made $95 million in overall rental fees. That’s a stronger revenue stream than the 2016 original — which grossed $153 million during its theatrical lifespan — in large part because Universal is able to keep 80 percent of the digital returns instead of the 50 percent the studio receives from multiplex ticket sales.

"The results for Trolls World Tour have exceeded our expectations and demonstrated the viability of PVOD,” NBCUniversal CEO Jeff Shell told the Journal, adding that the studio planned to release future titles in both formats when theaters re-open. (Studios typically keep films in theaters for 90 days before releasing them on VOD.) But some theater owners don’t appear willing to let them pursue that strategy. AMC Theatres chair-CEO Adam Aron penned an open letter to Universal Filmed Entertainment Group Chair Donna Langley saying that the chain will decline to show Universal features going forward.

“It is disappointing to us, but Jeff’s comments as to Universal’s unilateral actions and intentions have left us with no choice,” Aron’s letter reads. “Therefore, effectively immediately AMC will no longer play any Universal movies in any of our theatres in the United States, Europe or the Middle East. This policy affects any and all Universal movies per se, goes into effect today and as our theatres reopen, and is not some hollow or ill-considered threat. Incidentally, this policy is not aimed solely at Universal out of pique or to be punitive in any way, it also extends to any movie maker who unilaterally abandons current windowing practices absent good faith negotiations between us, so that they as distributor and we as exhibitor both benefit and neither are hurt from such changes.”

Hours after Aron released his open letter, Universal issued its own response:

“Our goal in releasing Trolls: World Tour on PVOD was to deliver entertainment to people who are sheltering at home, while movie theatres and other forms of outside entertainment are unavailable. Based on the enthusiastic response to the film, we believe we made the right move. In fact, given the choice of not releasing Trolls: World Tour, which would not only have prevented consumers from experiencing the movie but also negatively impacted our partners and employees, the decision was clear. Our desire has always been to efficiently deliver entertainment to as wide an audience as possible. We absolutely believe in the theatrical experience and have made no statement to the contrary. As we stated earlier, going forward, we expect to release future films directly to theatres, as well as on PVOD when that distribution outlet makes sense.”

The back and forth between AMC and Universal comes at a time when other are exploring on demand options for select titles instead of postponing their release until theaters re-open. For example, Warner Bros. announced that the Scooby-Doo feature Scoob! will be available to rent on May 15, while Paramount sold The Lovebirds to Netflix and Amazon Prime purchased My Spy from STX. And Universal is taking the digital plunge with its first non-animated feature. Judd Apatow’s latest comedy, The King of Staten Island — starring breakout Saturday Night Live funnyman Pete Davidson — was originally set to premiere at the SXSW Film Festival last month ahead of its summertime theatrical debut. Now the semi-autobiographical film will be available to rent on June 12, a development that Apatow and Davidson announced on Twitter yesterday.

“We’re still going to get rich, right?” Davidson semi-jokingly says in the video. “I don’t think we’re going to make money on this one,” Apatow replies. Based on the success of Trolls World Tour, they might see some serious green after all.

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Original story continues below

Like every major Hollywood studio, Universal was forced to postpone many of its upcoming summer blockbusters when multiplex chains around the country closed their doors due to the coronavirus pandemic. That means we won’t be seeing films like Candyman, F9 and Minions: The Rise of Gru until later this year or even 2021. But one high-profile Universal film did keep its release date: Trolls World Tour, the sequel to the 2016 animated hit. Rather than delay the movie’s April 10 premiere, the studio made it available for rental on digital services — including Amazon, iTunes and Vudu — for a 48-hour rental window priced at $19.99... much to the consternation of theater owners.

Despite the commercial risk, it looks like Universal has plenty to sing about now. According to The Hollywood Reporter, the studio estimates that Trolls World Tour has become the highest-grossing digital title in movie history, scoring the biggest opening day and weekend grosses for an on-demand release. (The film did play on the big screen in the few theaters around the country that are still open, including drive-ins.) While Universal didn’t release specific financial numbers, they did reveal to Deadline that Trolls World Tour did ten times of the business of its past record-holder, Jurassic World: Fallen Kingdom. Over the weekend, the film topped the charts on Amazon, iTunes, FandangoNow and Redbox On Demand.

Reviews of Trolls World Tour — which reunites Anna Kendrick and Justin Timberlake as pop musically-inclined trolls, Poppy and Branch — were mostly positive, which isn’t always the case for animated sequels. The filmmakers also apparently made the right decision to go heavy on the music in this installment, devising a story that sends the heroes on an adventure to visit six different Troll realms, each one with its own unique sound. That allowed them to fill the supporting cast with popular actors and singers like Rachel Bloom, Mary J. Blige, Kelly Clarkson, Anderson Paak and the K-pop band Red Velvet. Fans of those artists threw up their hands on Twitter.

While Trolls World Tour may be a digital hit, studios — including Universal — aren’t rushing to premiere other new titles on demand. Disney, for example, has announced that one of its summer titles, Artemis Fowl, will go straight to Disney+, but high-profile films like Mulan, Black Widow and Jungle Cruise are being held for when theaters re-open. Other studios have opted to simply sell off select titles to streaming services: Netflix picked up the Kumail Nanjiani-Issa Rae comedy The Lovebirds from Paramount, while Amazon Prime recently purchased STX’s My Spy starring Dave Bautista. Still, Trolls World Tour could be the first step towards a future where the next must-see movie opens on a TV, rather than a theater, near you.

Trolls World Tour is currently available to rent on digital streaming services like Amazon and iTunes.

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