In 2020, at the height of the pandemic, Universal Pictures and its art-house sibling, Focus Features, set off alarm bells in Hollywood by ending the long-held practice of giving theaters an exclusive window of about 90 days to play new movies. Instead, their movies, which have since included “Jurassic World: Dominion,” “Belfast,” “Cocaine Bear” and “M3gan,” would become available for digital rental or purchase — at a higher price — after as little as 17 days.
For a change-phobic industry that still views the 1981 arrival of armrest cup holders as a major innovation, the introduction of the service, known as premium video on demand, prompted extensive hand-wringing. Filmmakers and theater owners worried that ticket buyers would be more reluctant to leave their sofas if they could see the same films on their TV sets or iPads just a couple of weeks later.
Universal’s competitors mostly stuck with the status quo.
But the willingness by Universal to experiment — to challenge the “this is how we’ve always done it” thinking — seems to have paid off. Universal has generated more than $1 billion in premium V.O.D. revenue in less than three years, while showing little-to-no decrease in ticket sales. In some cases, box-office sales even increased when films became available in homes, which Universal has decided is a side effect of premium V.O.D. advertising and word of mouth.
Universal, for instance, made “Minions: The Rise of Gru” available for premium V.O.D. after 33 days in theaters in 2022. The movie stayed in theaters after that, selling more tickets than “Minions,” released in 2015, did after 33 days, according to data from Comscore, an analytics company. Data for Universal’s “Jurassic World” and “Fast and Furious” franchises show a similar effect.
An interesting wrinkle: Donna Langley, the chairwoman of the Universal Filmed Entertainment Group, which includes Focus Features, said the company had seen only a small decrease in revenue from traditional V.O.D. That service lets viewers rent or purchase movies at a lower price after 90 days in theaters. She said the premium offering was “an additive, important new revenue source that didn’t exist three years ago.”
In other words, Universal thinks that, to some degree, it has found an entirely new customer.
“It has had a hugely positive impact on our business,” Ms. Langley said, adding that without it, Universal would have likely had to make fewer movies. Universal and Focus will release 26 movies in theaters this year, more than any other Hollywood studio.
Universal charges as much as $25 to rent a film for 48 hours and $30 to buy it during its premium V.O.D. sales period. Those prices can drop to $6 and $20 in the later, traditional sales window.
About 80 percent of premium V.O.D. revenue goes to Universal, with sales platforms like iTunes and Google Play keeping most of the rest. (A small cut goes to theater chains like AMC Entertainment — grease to get them to agree to reduced exclusivity.) Ticket sales are typically split 50-50 with theaters.
Premium V.O.D. revenue is small compared with box-office sales. But it’s certainly not nothing.
“The Super Mario Bros. Movie” has generated more than $75 million in premium V.O.D. revenue since May 16, Universal said. “Jurassic World: Dominion,” “The Croods: A New Age” and “Sing 2” each collected more than $50 million. Universal said 14 films, including “News of the World,” a period drama starring Tom Hanks, and “M3gan,” each had more than $25 million.
Films from Focus, including “Belfast” and “Mrs. Harris Goes to Paris,” have generated roughly $5 million each. For some art films, a theatrical release has become valuable mostly as “a marketing tool” for premium V.O.D. rentals and purchases, according to Julia Alexander, the director of strategy at Parrot Analytics, a research firm.
Much like DVD sales in the 1990s and 2000s, premium V.O.D. has started to provide a type of financial safety net on box-office misses. “The Focus titles, in particular,” said Peter Levinsohn, the Universal Filmed Entertainment Group’s chief distribution officer. “Those smaller films aimed at older moviegoers have become, I wouldn’t say reliant on it, but they have benefited hugely.”
It’s also about flexibility, Mr. Levinsohn said. The studio often decides that 17 days (three weekends) of theatrical exclusivity is enough. Sometimes, based on ticket sales, it allows for longer. “The Super Mario Bros. Movie” played exclusively in theaters for 41 days.
“We have also taken back control of the decision of when to make our content available in the home, based on the most optimal timing for an individual film,” Mr. Levinsohn said. NBCUniversal said in January that revenue from its studios (both film and TV) increased 23 percent in 2022 from a year earlier, to $11.6 billion.
Every studio has been trying to find creative ways to maximize movie profits in a fast-changing business. Part of Universal’s challenge is guessing what kind of impact premium V.O.D. might have on streaming: If movies are sold or rented more widely before they arrive on a streaming service (in Universal’s case, on Peacock and Netflix), does that make the movies less valuable tools for encouraging people to sign up for streaming services?
“The impact on streaming is not quite as big as people might have expected, but it’s still notable,” Ms. Alexander said.
Aw man. That means members here are gonna keep complaining about short windows.
Of all the things to be mad about, I always found this to be the strangest.
This is the literal definition of being able to have your cake and eat it too.
It gets the beloved theatrical release for a minimum of 3 weekends (most movies don't have legs beyond that point anyway with certain exceptions, which get longer windows).
And then, you get to own it in some shape or form shortly after on home video. (Digital or a BD release just a few short weeks later).
I remember the 6 month gap between theatrical and home release, it was ass.
I didn't go to see Mario in the theatres, but that movie made a sh*tload of money, had a short PVOD release, and is now on 4K in the span of 2 months. Thats amazing.
We're literally getting the best of both worlds and people hate it...
Of all the things to be mad about, I always found this to be the strangest.
This is the literal definition of being able to have your cake and eat it too.
It gets the beloved theatrical release for a minimum of 3 weekends (most movies don't have legs beyond that point anyway with certain exceptions, which get longer windows).
And then, you get to own it in some shape or form shortly after on home video. (Digital or a BD release just a few short weeks later).
I remember the 6 month gap between theatrical and home release, it was ass.
I didn't go to see Mario in the theatres, but that movie made a sh*tload of money, had a short PVOD release, and is now on 4K in the span of 2 months. Thats amazing.
We're literally getting the best of both worlds and people hate it...
These members also claim that the early digital releases make it easy for piracy to happen. With no proof it happens in the US. Yes. People do watch pirated streams in the US but places like South America and Southeast Asia already pirate movies the moment they hit cinemas. And sometimes before if a criminal organization pays the right people.
This was made for the Shanghai theatrical release of Harry Potter and The Goblet of Fire:
It was made by both California Jobs Commission and Hong Kong Intellectual Property Department. Obviously, Hollywood knows where the real threat of piracy is and it is not someone in Kansas buying Fast X for $30. It is the Triad in Singapore who paid someone to film it in an empty theater.
Of all the things to be mad about, I always found this to be the strangest.
This is the literal definition of being able to have your cake and eat it too.
It gets the beloved theatrical release for a minimum of 3 weekends (most movies don't have legs beyond that point anyway with certain exceptions, which get longer windows).
And then, you get to own it in some shape or form shortly after on home video. (Digital or a BD release just a few short weeks later).
I remember the 6 month gap between theatrical and home release, it was ass.
I didn't go to see Mario in the theatres, but that movie made a sh*tload of money, had a short PVOD release, and is now on 4K in the span of 2 months. Thats amazing.
We're literally getting the best of both worlds and people hate it...
The only thing that bugs me about it is digital exclusives. I want Prey on disc, goddammit. But yeah, it can allow lesser-known films to build up audiences; and that’s definitely a good thing.
The only thing that bugs me about it is digital exclusives. I want Prey on disc, goddammit. But yeah, it can allow lesser-known films to build up audiences; and that’s definitely a good thing.
Oh I agree, I'm absolutely not in favor of exclusively digital titles.
But I have no issue at all with a shorter theatrical window. Basing it on box office success makes a ton of sense. Great way to recoup costs on movies that underperformed and a great way to keep the cash flow coming in steadily for movies that perform well.
All countries
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Hong Kong
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Universal Says On-Demand Film Strategy Has Increased Audience
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