In recent years, the major studios have embraced a variety of release strategies that have seen the old ubiquitous model of a theatrical release followed by digital/disc sell-through 90 days later fall away.
Arguably the most common one now has a new premium video-on-demand (PVOD) tier sliding in there – premium-priced rentals or purchases ($20-25 rentals) that come just a few weeks after the theatrical release began but often weeks before the release on regular VOD ($7 rentals) and subscription video-on-demand (SVOD) services like Netflix, Disney+, Paramount+, etc.
Of all the major studios, Universal Pictures has been the most aggressive PVOD supporter. Whereas many studios wait until 45 days after the film opened theatrically to release a movie digitally, sometimes longer if that film is doing well, Universal’s windows are shorter. A lot shorter.
Universal’s agreement with exhibitors allows them to bring titles to PVOD platforms in as little as 17-31 days after they open theatrically, depending upon how well they opened. That has resulted in events like “Fast X” coming to PVOD this Friday – just 21 days after it opened in U.S. cinemas.
PVOD for Universal is also flexible. With no fixed window beyond the 17/31 day minimum, they can choose when to release a film to PVOD – allowing smaller films that don’t fare well to arrive sooner, while success stories with legs can keep the theatrical exclusivity for longer.
In a new interview with The New York Times, chairwoman of Universal Filmed Entertainment Group Donna Langley has revealed that PVOD has become an “an important new revenue source that didn’t exist three years ago” which has had a “hugely positive impact” on the studio’s business.
According to the outlet, Universal has made more than $1 billion in less than three years from PVOD revenue and, more importantly, has done so with little-to-no decrease in box-office sales or regular VOD revenue. In some cases, box-office sales increased when films became available in homes. In a real surprise, the impact on traditional VOD sales has also apparently been negligible, with only a small decrease in revenue from a film’s traditional lower-priced rental and sell through releases.
It essentially means PVOD hasn’t really cannibalised box-office or VOD sales, rather Universal has found a new revenue source. Langley goes so far as to say Universal would likely have had to produce fewer movies this year without PVOD sales. Universal Pictures & Focus Features between them are set to release around 26 films in cinemas this year alone.
One shining example is “The Super Mario Bros. Movie,” the year’s highest-grossing film to date. The movie was released theatrically on April 5th and then arrived on PVOD 41 days later on May 16th. In the past three weeks it has generated a further $30 million at the domestic box office and, according to the paper, more than $75 million in PVOD revenue. The Times also says films like “Jurassic World: Dominion,” “The Croods: A New Age” and “Sing 2” have each collected more than $50 million from PVOD.
Has it cannibalised the box office? According to Box-Office Mojo the weekly drop-off rate for “The Super Mario Bros. Movie” over the past three weeks has been around 20-29%. In the three weeks before it was available on PVOD platforms? A 33-52% drop week-to-week.
Other studios have avoided PVOD as a revenue source in favor of sticking to theatrical releases with large 45-60 day windows followed by simultaneous SVOD and VOD releases. Which approach works better? Even with PVOD, Universal still had the biggest domestic box-office market share of any distributor last year at 20.86%.
For more details head on over to The New York Times.
