When Universal released “Trolls World Tour” straight to $20 digital rental amid coronavirus, rather than wait for movie theaters to reopen, industry reaction was swift. The Guardian and The Ringer both called the movie “the most important film of 2020,” and The Guardian added that it “could point the way forward for cinema post Covid-19.” The Daily Beast wrote that it “changed the film industry as we know it.” And that was all before the numbers even came out.
This week came the news that the movie cleared $100 million in rental revenue, breaking digital records and making more for Universal in three weeks than the first Trolls movie made in theaters in five months. And movie theaters are angry.
AMC, America’s largest movie theater chain, said it will no longer show Universal movies, even after coronavirus quarantining has passed. Cineworld, owner of Regal, the second-largest chain, called what Universal did “completely inappropriate” and appeared to back up AMC by saying, “We will not be showing movies that fail to respect the windows” of theatrical release before digital rental.
The truth probably lies somewhere in between.
“Trolls World Tour” was a special case during a nationwide shutdown with families cooped at home. It was also the right kind of movie for this moment: bright, positive, musical, and fun for kids and adults. While more movies might go straight to digital in the future, large blockbusters that play well in theaters aren’t going to skip theaters.
It’s also unlikely AMC will be able to keep its threat to Universal. But it’s unsurprising that theater chains feel they have to talk tough to prevent more studios from following Universal’s lead.
In an interview with Yahoo Finance on Thursday, IMAX CEO Richard Gelfond had a more measured take than his movie theater industry peers.
“The verdict is completely out on ‘Trolls’,” he said. “It did pretty well streaming, but people had no choice if they had kids, even if they had to pay [$20] for it. I wonder what that model would look like if there was competition from the movie theaters at that point, and if the kids could watch sports or go do other things. So I think declarations of that changing the movie industry are pretty premature.”
Not the new standard
Gelfond points to the fact that a slew of big blockbusters originally scheduled for March and April have been postponed—some of them a full year—for new dates in theaters.
“Bond, Top Gun, Wonder Woman, Mulan, Black Widow, every one of them has been scheduled for a theatrical release later in the year, so if that proves anything, it’s the value of the theatrical window,” Gelfond said. “I think with ‘Trolls,’ they’re trying to create a perception of a new way to go, but I think we’re a long way off from that, if ever.”
Indeed, it’s hard to picture Disney ever dropping a big Marvel or Pixar movie straight to Disney+, considering how those films dominated the 2019 box office. “Avengers: Endgame” became the highest-grossing theatrical release of all time, dethroning “Avatar.” Six of the top 10 U.S. box office opening weekends ever are Marvel movies. And seven of the top 10 highest-grossing releases of 2019 were from Disney, including two live-action remakes, indicating that “Mulan” will reap huge box office receipts.
Of course, IMAX CEO Gelfond has to say that “Trolls World Tour” won’t spell doom for his own business. He’s talking his book.
But Gitesh Pandya, the editor of Box Office Guru, also sees “Trolls World Tour” as a unique case, not a new standard.
“It’s an individual situation,” Pandya said on Yahoo Finance this week. “They had to change [their plan] on the fly. Obviously AMC, the major exhibitor, is not happy about this... but I think in the long run they will kiss and make up. They need each other, they will work together. However, I think what you will see is some of the smaller films and family movies going this route and skipping theatrical in order to minimize risk.”
Pandya foresees the already-clear division between “major league and minor league” movies becoming more stark after coronavirus. Major league films include superhero movies, big action blockbusters, and highly-anticipated sequels. “They need that big screen experience. But some smaller and medium films, some sequels from older brands which may not sell anymore, the riskier ones, I do think studios will look at some of those and decide this does not need a major release in theaters, we can go straight to streaming... R-rated comedies, for example, have done very poorly at the box office in the last couple of years. I think it’s going to be a case-by-case basis.”
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Daniel Roberts is an editor-at-large at Yahoo Finance. Follow him on Twitter at @readDanwrite.
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