A lot has been made of Universal’s reporting that Trolls World Tour earned an estimated $95 million from PVOD rentals in its first 19 days of availability. The studio claims this is a record for a PVOD release. While the headlines are eye-catching, the story they tell reflects only part of the film’s total earning potential.
For a variety of reasons, comparisons between a traditional release and one that forgoes cinemas entirely aren’t one-to-one. The unique market situation currently taking place, with families around the world confined to their homes with little new content available, means that Trolls World Tour’s performance does not reflect the typical nature of a competitive market.
For example, the first Trolls film, released in November 2016, achieved its box office performance while contending with a new Marvel film (Doctor Strange) and the first Harry Potter spin-off (Fantastic Beasts and Where to Find Them), both of which opened during Trolls’ first three weeks (Strange on the same day, in fact) and directly competed for similar audiences. During Trolls’ first 19 days, the two aforementioned titles earned $276.7 million combined at the domestic box office alone—further highlighting the success of the film in a crowded theatrical market.
While it’s reasonable to argue that Trolls World Tour could net higher profit margins for Universal from its PVOD window, the inherent risk in its release strategy rests with the fact that its downstream revenues could be hindered by its early at-home release. In bypassing the theatrical window, the sequel potentially diminishes its ability to build organic audience word-of-mouth that would traditionally provide a strong foundation for sustained at-home revenues in the weeks and months following a standard theatrical window.
From a revenue standpoint, the PVOD launch of Trolls World Tour represents a decline of more than 21 percent from the $120.86 million earned by its predecessor in the first 19 days of its domestic theatrical release. Ultimately, Trolls banked $153.7 million domestically and an additional $193.2 million internationally for a global box office total of $346.9 million. Various sources report that ancillary revenues in the home video market added another $160 million.
A PVOD release alone, even in the unique circumstances of COVID-19, represents a fraction of a film’s potential earning power. While Universal claims the decision to forgo theatrical in the case of Trolls World Tour was made in part due to a toy licensing deal, the studio’s actions in pushing the majority of its upcoming slate to 2021 represent an understanding of the financial implications of a straight-to-PVOD model.
Rival studios have taken a similar approach. It’s the rare film that has been pushed to PVOD, while release dates in the fall/winter of 2020 and 2021 are being claimed on a weekly basis. Paramount’s The Lovebirds and Warner Bros.’ Scoob! stand out as the only two major titles outside of Universal to forgo a theatrical release altogether. While there is no question that Trolls: World Tour’s PVOD release is a success judging by current market conditions, it does not necessarily forecast a significant shift in the distribution strategy for Hollywood content under normal, or even mildly competitive, circumstances.