- Universal's "Trolls World Tour" has racked up nearly $100 million in rental fees in the last three weeks.
- While this figure is smaller than the $153.7 million that the first "Trolls" film collected at the domestic box office, the revenue that Universal has secured has been about the same for the two films.
- This success has emboldened Universal to consider doing more digital releases in the future. However, it is unclear how that decision will affect the studio's relationship with theater owners.
The coronavirus pandemic has fundamentally changed how people are watching films. With movie theaters shuttered since mid-March, consumers are turning to streaming and on-demand services.
For the most part, movie studios have opted to postpone theatrical releases until cinemas reopen, but a few films have decided to skip the big screen and head straight to people's homes. And it seems to be paying off.
Universal's "Trolls World Tour" became available as a digital rental on April 10 for $19.99. Three weeks later, it had racked up nearly $100 million in rentals, a person familiar with the data said. While this figure is smaller than the $153.7 million that the first "Trolls" film collected at the domestic box office, the revenue that Universal has secured has been about the same for the two films, this person said.
The statistics were first reported by The Wall Street Journal on Tuesday. Universal declined to comment further when contacted by CNBC.
Theaters typically take about 50% of box office sales, depending on the deal that was struck with the studio. Sometimes the theater will take a little less. So, "Trolls" only deposited around $77 million into Universal's pocket by the end of its run in North America.
For comparison, Universal retained about 80% of the digital rental or purchase fee for "Trolls World Tour."
That means that "Trolls World Tour" was actually more lucrative for Universal than "Trolls" was, at least in the U.S.
Additionally, "The Invisible Man," "The Hunt," "Emma" and "Never Rarely Sometimes Always," movies that were in theaters when social distancing restrictions caused cinemas to temporarily shutter, have generated around $60 million in rental fees, $48 million of which has gone straight to Universal, the person said.
"The results for 'Trolls World Tour' have exceeded our expectations and demonstrated the viability of PVOD," Jeff Shell, head of the film studio's parent division, NBCUniversal, told the Journal.
This could be the reason Universal decided to release Judd Apatow's "The King of Staten Island," starring Pete Davidson of "Saturday Night Live," on demand June 12 instead of releasing it in theaters.
It is unclear how Universal's decision to release more movies on demand will affect their relationship with theaters.
Theater owners had been understanding when movies that had already been in theaters went to the home video market early, because of the extenuating circumstances of the outbreak. However, that sentiment has not crossed over to studios taking films that had theatrical releases scheduled and placing those on demand without a run in theaters.
The National Association of Theatre Owners did not immediately respond to CNBC's request for comment.
Of course, Universal isn't the only studio to cancel theatrical releases for films and set digital releases.
Warner Bros.' "Scoob" will go to video on demand on May 15 for a $19.99 rental fee or $24.99 to own. The AT&T-owned company also purchased the rights to Sony's "An American Pickle," a Seth Rogan movie that will now go to HBO Max.
Disney, too, has opted to bring "Artemis Fowl" straight to Disney+ instead of waiting for theaters.
To be sure, studios aren't ditching theaters completely. The movies that have gone to video on demand, or plan to, are low- to mid-tier-budget films that weren't forecast for a massive box office.
"We haven't seen a movie go to streaming that was expected to be a blockbuster," said Shawn Robbins, chief analyst at BoxOffice.com.
Universal's "F9," the next installment in the "Fast and Furious" franchise, moved to 2021 so that it could have a global theatrical release. "Furious 7," which was released in 2015, hauled in more than $1.5 billion globally, and "Fate of the Furious," released in 2017, had $1.24 billion in ticket sales.
Similarly, Disney has pushed "Black Widow" and "Mulan" to new dates on the theatrical calendar to capitalize on ticket sales.
Disclosure: NBCUniversal is the parent company of Universal Studios and CNBC.