A new report today from the Wall Street Journal details the successful digital-only release of “Trolls World Tour” by Universal Pictures. The report says that the movie has racked up nearly $100 million in rentals, but as you would expect, movie theater owners are pushing back.

The WSJ report details that “Trolls World Tour” has already generated more revenue than the original “Trolls” did during its five-month domestic theatrical run. In light of this, Universal executives are apparently more fond of digital releases going forward:

With nearly five million rentals in the U.S. and Canada, the digital release has in three weeks generated more revenue for Universal than the original “Trolls” did during its five-month domestic theatrical run, according to a person familiar with the matter. Its performance has convinced Universal executives that digital releases can be a winning strategy, and may diminish the role of theaters even after the pandemic passes.

Studios such as Universal also bring home 80% of the digital rental or purchase fee, compared to around 50% of box-office sales. Universal has generated more than $77 million in revenue from the digital release of “Trolls World Tour” so far from the $100 million in rentals. It would have needed box-office gross of $154 million to achieve that same number.

“The results for ‘Trolls World Tour’ have exceeded our expectations and demonstrated the viability of PVOD,” Jeff Shell, NBCUniversal CEO, said. “As soon as theaters reopen, we expect to release movies on both formats.”

In the interim, Universal says it will release the Judd Apatow comedy “The King of Staten Island” exclusively digitally due to COVID-19 on June 19.

Following today’s report from the Wall Street Journal, however, the National Association of Theater Owners was quick to send out their own take on the news, as reported by Deadline.

“This performance is indicative of hundreds of millions of people isolated in their homes seeking entertainment, not a shift in consumer movie viewing preferences. 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.

“Universal heavily marketed the title as a theatrical release, in theaters and elsewhere, for weeks on end. That is unlikely to recur in normal times, and those costs haven’t been disclosed. While Universal may be pleased with the PVOD results of Trolls World Tour, this outcome should not be interpreted as a sign of a ‘new normal’ for Hollywood.”

NATO president and CEO John Fithian went on to say:

“Universal does not have reason to use unusual circumstances in an unprecedented environment as a springboard to bypass true theatrical releases. Theaters provide a beloved immersive, shared experience that cannot be replicated – an experience that many of the VOD viewers of this film would have participated in had the world not been sequestered at home, desperate for something new to watch with their families. We are confident that when theaters reopen, studios will continue to benefit from the global theatrical box office, followed by traditional home release.”

Taking things even further, AMC now says it won’t show any Universal films going forward because of the digital release dispute, according to a new report from The Hollywood Reporter. AMC Theatres chair-CEO Adam Aron specifically cited Shell’s comments:

“It is disappointing to us, but Jeff’s comments as to Universal’s unilateral actions and intentions have left us with no choice. Therefore, effectively immediately AMC will no longer play any Universal movies in any of our theaters in the United States, Europe or the Middle East,”

What do you think of this debate? Should the early success experienced by Universal be indicative of the possibilities going forward? Let us know down in the comments!

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