In recent years, major studios have adopted a variety of release strategies that have seen the old ubiquitous model of a theatrical release followed by a digital/disc sale 90 days later fall away.
Arguably the most common now has a new premium tier of video on demand (PVOD) slipping into it – high-priced rentals or purchases ($20-$25 rentals) that come just weeks after the beginning of theatrical release but often weeks before regular VOD release ($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 proponent of PVOD. While many studios wait up to 45 days after the movie opens to release a movie digitally, sometimes longer if that movie does well, Universal’s windows are shorter. Much shorter.
Universal’s agreement with exhibitors allows them to bring titles to PVOD platforms in as little as 17 to 31 days after they open in theaters, depending on how open they are. This has resulted in events like “Fast X” coming to PVOD this Friday – just 21 days after it opened in US theaters.
PVOD for Universal is also flexible. With no fixed window beyond the 17/31 day minimum, they can choose when to release a film in PVOD – allowing smaller films that don’t do well to arrive sooner, while blockbuster stories with legs can retain theatrical exclusivity longer.
In a new interview with The New York Times, Universal Filmed Entertainment Group President Donna Langley revealed that PVOD has become “a significant new revenue stream that didn’t exist three years ago” that has taken an “extremely 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 or no decrease in box office sales or revenue. VOD regulars. In some cases, box office sales increased when films became available in homes. In a real surprise, the impact on traditional VOD sales was also apparently negligible, with only a small drop in revenue from the traditional low-cost rental of a film and sales through releases.
This basically means that PVOD hasn’t really cannibalized box office or VOD sales, but Universal has found a new revenue stream. Langley goes so far as to say that Universal probably should have produced fewer films this year without PVOD sales. Universal Pictures & Focus Features between them are expected to release around 26 movies in theaters this year alone.
A shining example is “The Super Mario Bros. Movie”, the highest-grossing movie of the year so far. The film hit theaters on April 5, then arrived on PVOD 41 days later on May 16. Over the past three weeks, it reportedly generated both an additional $30 million at the domestic box office and over $75 million in PVOD revenue. Films like ‘Jurassic World: Dominion’, ‘The Croods: A New Age’ and ‘Sing 2’ have each reportedly raised over $50 million from PVOD.
Has it cannibalized the box office? According to Box-Office Mojo, the weekly drop rate for “The Super Mario Bros. Movie” over the past three weeks has been around 20-29%. Within three weeks of its availability on PVOD platforms? A decrease of 33 to 52% from one week to another.
Other studios shunned PVOD as a source of revenue in favor of sticking to theatrical releases with large 45-60 day windows followed by simultaneous SVOD and VOD releases. Which approach works best? Even with PVOD, Universal still held the largest domestic box office market share of any distributor last year at 20.86%.
For more details, head to The New York Times.