The archive · Business Models · Strategic decision · 2020
Universal debuts Trolls World Tour at home for $19.99 — cinemas boycott, PVOD era begins
When COVID-19 closed cinemas, Universal released its would-be blockbuster as a $19.99 48-hour home rental — $100M in three weeks, then a 17-day window deal.
Universal Pictures · NBCUniversal
What it had to solve
Trolls World Tour was scheduled to open in theaters on April 10, 2020. As COVID-19 shut cinemas worldwide, Universal had to choose between shelving the film and inventing a new release route; exhibitors' 90-day exclusivity window had long blocked home release for new movies.
How it works
Trolls World Tour was meant to open in theaters on April 10, 2020. When the COVID-19 pandemic closed cinemas around the world, Universal Pictures chose a route no major release had taken with a planned blockbuster: it skipped theaters entirely and released the DreamWorks Animation film directly to homes as a premium video-on-demand rental.
The offer was a 48-hour rental at $19.99 — the price of a couple of tickets — sold through digital storefronts while the film's theatrical marketing was still running. NBCUniversal CEO Jeff Shell said the studio used the premium price to 'preserve the premium nature of movies' and expected PVOD to become a complementary element to theatrical distribution rather than a replacement.
The economics were reported within weeks: Universal said the title generated about $100 million in premium VOD rentals in its first three weeks in North America, which Shell called evidence that the experiment had 'exceeded our expectations and demonstrated the viability of PVOD'. Exhibitors read the same numbers as a threat — AMC CEO Adam Aron said the chain would no longer play Universal movies after the studio unilaterally broke the traditional 90-day window.
The fight resolved into a new rule. On July 28, 2020 AMC and Universal announced a multi-year agreement cutting theatrical exclusivity to 17 days — three weekends — before Universal could offer a film as a premium rental of roughly $20, with AMC sharing in those revenues, while cheaper $3–$6 rentals still waited 90 days. The shorter window became the template other studios negotiated.
Why it lands
- It treated the film's value as transportable: the same premium a couple of tickets would cost worked as an at-home price, protecting the movie's premium positioning.
- Going straight to homes removed the 90-day window from the list of assumptions and turned release strategy into a per-title business decision.
- Universal moved before rivals, so its experiment set the terms — the studio with the first data got to argue the model into existence.
- A 48-hour rental window at a high price tested premium VOD without cannibalizing the cheaper $3–$6 rental market that followed later.
What it did
Universal said the film took in about $100 million in premium rentals in its first three weeks in North America — a result Shell called proof that PVOD was viable and enough to push the film toward profitability. AMC and theater owners protested the broken window, and by July 2020 AMC and Universal had agreed to cut theatrical exclusivity to 17 days for premium home rentals.
What you can take
A crisis can force a pricing structure into existence: Universal proved a new release could open at $19.99 in homes, and what looked like a one-off experiment became the industry's new release window.
Since then
The July 28, 2020 agreement with AMC let Universal put its own films on premium VOD after three weekends in theaters and share those revenues with the chain. Other studios ran their own premium home experiments during the pandemic, and Trolls World Tour's reported rental figure became the number cited in windowing negotiations. Universal returned to theatrical releases when cinemas reopened, and premium VOD settled into the calendar as an additional window — Shell's 'complementary element' became the industry's working description.
Sources
- AMC Theatres Won't Play Universal Movies in Wake of 'Trolls World Tour' Dispute
- NBCUniversal Chief Says Premium VOD for Some Movies Will Be 'Complementary' to Theatrical Distribution
- AMC and Universal agree to let movies go from theaters to digital rentals much sooner
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