Back in April, we explored how PVOD (releasing films straight to VOD for a premium price) had been trialled by a minority of studios prior to the COVID pandemic. At the time, the threat of cinemas boycotting films prevented it from really taking off. However, in the wake of the pandemic, the closure of cinemas has prompted studios to take PVOD mainstream, by-passing the traditional theatrical window.
Today, we reflect on the months since the pandemic first stalled the film industry and consider whether PVOD has been the game-changer some heralded it to be, and if it’s sounding the death knell for cinemas. While studios have withheld revenue figures for almost all PVOD releases, making it hard to analyse their success, below we take a look at how consumers and the industry have responded to PVOD.
How successful has PVOD actually been? Spoiler alert: It’s been a smash hit for families with children…
In April, Trolls World Tour, one of the first films to be released on PVOD and cinemas simultaneously, set records for its digital opening weekend. Looking back now, the film (which cost £15.99 to rent at home) earned more in its first three weeks of digital release than the first Trolls film earned in its five months in cinemas in 2016.
Similarly, another tentpole title that was released straight to PVOD, Scoob! (a Scooby-Doo origin story released by Warner Bros), surpassed the previous success of Trolls World Tour. On its opening weekend the film hit the number one spot on both Amazon Prime and iTunes VOD charts, and did so faster than Trolls World Tour.
However, as many industry sources have pointed out, the success of Trolls World Tour and Scoob! is at least in part due to the unique and difficult situation of having children at home, with schools closed and precious few other forms of entertainment. Another factor is that, even without a pandemic, PVOD is particularly appealing to families as a cheaper, easier alternative than taking the whole family to the cinema.
While studios haven’t shared revenue figures for PVOD films, their performance on VOD and TVOD charts (which are ranked by number of transactions) suggests that PVOD titles aimed at adults have also done well during lockdown.
The Secret: Dare to Dream (a drama about a widow raising three children starring Katie Holmes) immediately hit the number one spot on VOD charts including AppleTV and Amazon Prime Video. More recently, last weekend Antebellum (a civil-war era thriller written by Jordan Peele) went straight to the number one spot on US VOD charts (including on Vudu which ranks films by total gross). Furthermore, a recent study found that 22% of US consumers had paid to rent and watch a PVOD film during the pandemic. However, as some sceptics point out, PVOD films are likely to have done better than they would have otherwise, because of the lack of other, particularly tentpole, releases.
Critics are also divided about whether PVOD has been a success or failure for Disney. Despite several of its films hitting the $1billion mark for box office revenue, Disney decided to release Mulan, which had previously been scheduled for theatrical release, straight to PVOD on Disney+. Existing subscribers had to pay $30 to watch the film at home, on top of the monthly subscription fee.
As Disney hasn’t released revenue figures, some commentators reference CFO Christine McCarthy’s recent comments about the Mulan release – that Disney was ‘very pleased with what [they] saw’, as evidence that the film has made significant revenue. Given that the potential audience for the film is over 60 million Disney+ subscribers, and all revenue goes straight to Disney (rather than being shared with cinemas), it could well have been a success. However, those who are more sceptical point out that while Mulan is thought to have boosted downloads of Disney+ by 68%, this is much less than the boost seen just before Hamilton launched on the service. They also point out that it took all weekend for Mulan to become the #1 trending film on Disney+. As the budget for Mulan was $200 million it’s unlikely the film has broken even through its PVOD release alone.
So, the success of PVOD is still debated. But is it likely to cause the ‘death of cinema’ as predicted?
We previously speculated whether PVOD was likely to have a negative impact on cinemas and the theatrical window (as some commentators have argued), or whether it would work in partnership. Recent evidence points to the latter.
We’re starting to see tentpole titles that had been postponed getting an Autumn / Winter theatrical release date. For example, No Time to Die, which had been scheduled for release in April, is now due to open in cinemas in November, with Dune and Wonder Woman 1984 following it in December. This suggests that studios are still counting on multi-million-dollar box office revenues, particularly for big-budget, blockbuster films.
Most of the industry has looked to Tenet as the canary in the coalmine for the future of cinema. Christopher Nolan’s latest production was the first blockbuster title to brave a cinematic release during the pandemic; both studios and cinemas have eagerly awaited its box office results. In the US, the film had a disappointing opening weekend (taking $20 million vs a budget of $200 million). However, its performance in other markets (particularly those with a more controlled COVID situation) is more encouraging, especially as Nolan’s films usually do best outside of the US. Globally, the film has surpassed the $200 million revenue mark after only being in cinemas for three weeks. Given the lack of other big titles, commentators think the film will continue to build on its current box office success over the next few weeks.
Overall, it’s likely that cinemas are here to stay (at least in the immediate future)
Based on what we’ve seen over the past few months it’s likely that studios will continue to seek a theatrical release for their biggest-budget titles such as No Time to Die and Tenet. Particularly as cinema chains still have leverage to force studios to come to the negotiating table (after threatening to boycott Universal films, AMC was able to secure a shortened, 17-day cinema release window and a share of PVOD revenues). It’s also likely that these types of films will continue to attract a cinema audience who are there for the ‘event’ experience, especially as cinemas reopen globally, and cooped-up consumers look for things to do outside the house.
Happily for many, especially cinema chains, it seems unlikely that PVOD will lead to the immediate decline of cinema, in fact it’s more likely to become a supplementary film experience. In particular, there’s a school of thought that believes PVOD could offer an environment in which lower-budget films, which are less certain commercial successes in the cinema, might instead go straight to PVOD – rather than having a short, financially risky theatrical run.
This could see studios opting for bespoke release strategies for each title, tailoring the cinematic, PVOD and TVOD windows according to what makes the most financial sense. If this is the case, the next big question will be around how consumer-friendly this hybrid film landscape is. We know that confusion over when and how films are available has a detrimental impact on consumers’ ability to purchase, while perceptions around window lengths impacts on their willingness to pay for rentals vs. waiting for cheaper / easier ways to consume films. What is clear is that the cinema industry is undergoing a period of significant upheaval, and it may take some time for the dust to settle.